Lira advances after bigger than expected inflation drop
The Turkish lira firmed on Tuesday as inflation drops (Aug CPI 15.01% vs 15.51% f/c, 16.65% July).
The USDTRY pair fell to the lowest in 1 ½ week, following multiple upside rejections under the top of falling daily cloud.
Fresh easing generates initial signs of reversal, which would require return below daily cloud base (5.6737) for confirmation, with weakening daily studies supporting lira for now.
Drop in inflation is positive signal, however, high CBRT interest rates and Turkish economy in recession continue to weigh.
CBRT meets on 12 Sep and potential rate cut would help the Turkish currency to recover further.
Res: 5.7950; 5.8228; 5.8497; 5.9141
Sup: 5.7600; 5.7412; 5.7110; 5.6737