USDTRY: Lira Gains Some Momentum from the CBRT’s Minutes

USDTRY Turkish lira
USDTRY Turkish lira

The Central Bank of the Republic of Turkey (CBRT) held interest rates at 8.25%, and it has just released its minutes, where it has indicated that it stands prepared to continue with the liquidity measures it has put in place despite forex scarcity. As a result, the Lira was able to get some reprieve from the onslaught of the last few weeks, gaining 0.33% on the day.

The CBRT noted that there was a sustained rise in the inflation trend in August judging by the leading indicators and that it would “tighten steps in liquidity policies” that have increased loan and deposit rates, noting that it would “continue with liquidity measures.”

The USDTRY currently trades at 7.3422. The pair looks to be on the way to the sustaining losses for the 2nd successive day on the back of Lira strength on the day.

Technical Outlook for USDTRY

There is a bearish divergence setup on the daily chart of the USDTRY as the price activity appears to have peaked at the 7.39840 resistance. Continued Lira strength makes 7.26356 a possible target, with the 7.19656 support (high of 6 May and lows of 12 August and 21 August) forming the next plausible target. Further downside targets are found at 7.08515 and 6.99821. 

On the flip side, any declines can be seen as buying opportunities, with a price push above 7.39840 producing new all-time highs on the pair. 7.45790 could be a possible new target for bulls following a breach of the current record high, as it marks the 61.8% Fibonacci extension from the low of 4 March 2020 to the 7 May top and accompanying dip to the 2 June low. 

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USDTRY Daily Chart

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