USDTRY: Turkish Lira Gains Momentum Below the 7.00 Mark
USDTRY correction continues for the fourth consecutive session as Turkey gradually eases the coronavirus lockdown. As more and more businesses reopen the sentiment improves for the TRY. Turkish lira trades today at the highest level for May after hitting the previous week historic lows against the greenback amid a deterioration in the country’s currency reserves and foreign financing needs.
On Monday, Turkey removed the forex transactions ban with Turkish lira for three foreign banks, namely the Citibank, BNP Paribas, and UBS. Last week, the Turkish banking watchdog banned the three banks from doing foreign exchange transactions with the Turkish lira, due to reports saying that some London-based financial institutions were engaged in manipulative trading aimed at depreciating the Turkish lira, by buying large amounts of foreign currency with Turkish liras they do not own.
On the data front, Turkey’s Current Account Balance came in at $-4.92B below the expectations of $-4B in March. Traders will focus later today on Fed’s Chairman Jerome Powell speech amid rising speculation that the Fed might soon adopt negative rates.
USDTRY is 0.23% lower at 6.9805, as the pair correction accelerates below the 7.00 mark. The pair retreated finally from overbought levels that spend the last month. The technical picture remains bullish for the pair despite the recent correction. What can cancel the bullish momentum is only a break below the 50-day moving average at 6.6754.
On the upside, initial support for USDTRY pair stands at 6.9768 the daily low. If the pair breaks below, the next support level stands at 6.9364 the low from April 29 trading session. If the sellers persist for USDTRY below 6.9364 then the next target stands at 6.8340 the low from April 17.
On the other hand, the first resistance for USDTRY stands at 6.9951 the daily high. The next hurdle will be met at 7.0353 the top from yesterday’s trading session. The next supply zone stands at 7.1588 the high from May 8.