USDTRY Makes Fresh Two-Year Highs On Risk Aversion


USDTRY hits levels that we haven’t seen since August 2018 as risk aversion returns to markets. Weak economic data from the U.S. shift investors attention to safe-haven assets. The headline U.S. retail sales came in at -8.7% worse than expectations of -8%, that was the biggest decline even since the data started in 1967. Details read slightly better as the Retail Sales Control Group came in at 1.7%, topping the forecasts of -2%.

The Empire Manufacturing came in at -78.2 well below the expectations of -35, making fresh record low by far. The U.S. Industrial Production came in at -5.4%, below consensus of -4% in March. The Capacity Utilization registered in at 72.7% below the expectations of 73.8%. Worst is yet to come in U.S. economic data, and I expect that will support U.S. dollar haven flows.

Turkey’s economy is on shaky ground and the Turkish lira depreciating fast as the fast-rising coronavirus cases threaten to plunge the already fragile economy into much more danger. Earlier today announced that the Turkey Budget Balance came down to -43.7B in March from previous -7.36B.

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USDTRY Price Analysis

USDTRY is 1.08% higher at 6.8904, as the pair trades with gains for the four consecutive trading session as investors dump emerging markets currencies as the risk aversion returns to markets. The technical picture is clearly bullish for the pair as it makes consecutive higher highs and higher lows. The only risk for the bulls is that the pair have reached overbought levels and a sharp correction can’t be ruled out. 

On the upside, the first resistance for USDTRY stands at 6.9046 the daily top. The next hurdle awaits at 7.000 psychological mark.  

On the other side, first support for USDTRY stands at 6.8359 the daily low. If the pair breaks below, the next support level stands at 6.7618 the low from yesterday’s trading session. A break below might test 6.6665 the low from April 10.

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