USDTRY trading close to two-month highs as Turkish lira weakness continues after the U.S. Congress approved a bill banned Turkey from a programme to build and purchase the F-35 fighter jets. The central bank of Turkey (CBRT) the previous week cut the interest rates by 200 bps to 12% from 14% below the analysts’ consensus of an interest rate cut to 12.5%. The central bank said that recovery in Turkey’s economic activity continues while the global economic outlook weakens amid trade tensions. CBRT reiterated that would continue to use all instruments to achieve its monetary targets, the price and financial stability.
The parliament in Turkey approved the government’s budget for the new year, which includes increased defence spending and estimates a budget deficit of 139 billion Turkish liras.
USDTRY rallied since December 13 as the tensions in the Mediterranean region on increases. The momentum is positive and today after a weak start managed to turn higher and trades 0.04% at 5.9417.
On the upside, immediate resistance for USDTRY stands at 5.9418 the daily top, while a credible break above might push the pair higher to the next resistance at 5.9840 the high from May 30th. The next barrier will be met at 6.0615 the top from May 29th.
On the downside, first support for USDTRY stands at 5.9211 the daily low. A break below the daily lows might attract more sellers for the next target at 5.8505 the low from December 17th. Next level for USDTRY to watch on the downside is the 50-day moving average at 5.7856.