USDTRY retreats today from seven-month highs that hit yesterday amid clouds in the Turkish economy and military actions in Syria and a new front in Libya. The Turkey Economic Confidence Index came in at 93.8 for December above the previous reading of 91.3 providing some relief to the Turkish lira. Turkey Manufacturing Confidence increased to 103.6 in December above the November reading of 102, the Capacity Utilization drop to 77% from 77.2% in December.
CBRT cut the interest rates by 200 basis points to 12% from 14% below the analysts’ consensus of an interest rate cut to 12.5%. The central bank of Turkey said that recovery in Turkey’s economic activity continues. The CBRT reiterated that would continue to use all tools to achieve its monetary targets, the price and financial stability.
USDTRY gives up 0.17% at 5,9481 as the rally that started in early December is in tact. The technical outlook is positive despite today’s pullback. On the downside, immediate support for USDTRY stands at 5.9390 the daily low. If Turkish Lira breaks below more sellers might step in targeting 5.8510 the December 17th low. A critical support level provided by the 50-day moving average at 5.7933.
On the flip side, initiate resistance for the pair stands at 5.9489 the daily high. Next resistance will be met at 5.9582 the high from yesterday’s trading session. The next barrier on the upside stands at 6.0615 the high from May 29th.