USDTRY retreat now, having hit earlier today a new record high up to 7.3558. After two months of consolidation below the 7.00 mark, this week the Turkish lira tumbled the fresh all-time lows amid signs of destabilization in the Turkish financial markets. The short term borrowing costs rose sharply on Monday and investors sold –off the Turkish lira.
Turkey’s central bank spent over 35 billion dollars to support the lira during 2020, up from 40 billion spent in 2019. Turkish government supported a credit-fuelled economic growth that increased the domestic demand for USD and for imported products that put extra pressures on the current account. CBRT has cut the interest rates by 15.75 points in the last 12 months.
The Turkish economy was in big troubles even before the coronavirus, which made the situation even worst as the tourism industry in the country collapsed, and the primary source of foreign currency income diminished.
New intervention in the money markets today by the central bank of Turkey push the USDTRY to the daily lows at 7.1656, and now the question is if CBRT has left any power to force the lira back below 7.00 against the USD, or it will be just a short live correction before a move up to 7.50.
USDTRY Price Daily Technical Analysis
USDTRY is 0.91% lower at 7.1639, as the pair corrects from historical levels reached earlier today. The technical outlook is bullish, and higher levels are on the cards, but investors should be cautious as we might see further intervention in the currency markets by Turkey’s central bank.
In case of a correction, the first support for USDTRY is at 7.1455 today’s low. More bids might emerge at 7.0617 the low from yesterday’s trading session. While the 7.00 round figure would provide the next support level.
On the upside, the first resistance is the daily top and all-time highs at 7.3503. Next resistance would be met at 7.50 psychological mark.
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USDTRY Daily Chart
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