Lira’s negative sentiment likely to extend on coming data
The USDTRY pair remains firm despite the price action remaining below the base of thick daily cloud, which was cracked after Monday’s opening with 15 big figures gap higher.
The lira was hit after President Erdogan fired the CBRT governor that raised concerns about the independence of Turkey’s central bank, as Erdogan pointed to further problems if the central bank will not be overhauled.
Lira’s sentiment turned negative after this and the pair bounced after repeated failure at key 200DMA support.
Series of important economic releases in coming days may further sour the sentiment.
Turkey’s current account data for May are due on Thursday, with forecast for 0.300B liras surplus, following previous month’s deficit of 1.33B, on strong fall in imports, expected to further weigh.
Turkey’s Industrial production data are due on Friday and jobs data next Tuesday (16 July) which could set scene for further weakness on downbeat outcome.
Key event for lira will be CBRT’s interest rate decision on 25 July, with expectations for rate cut under new governor (22% f/c vs 24% current) that would further pressure Turkish currency.
Near-term price action maintains bullish bias above 10SMA (5.6863) for renewed attack at daily cloud base (5.7736), break of which would generate bullish signal for attack at key barrier at 5.8355 (Fibo 38.2% of 6.2445/5.5828 descend).
Alternative scenario would require filling Monday’s gap to weaken the structure for renewed attack at key support at 5.5828/5.5740 (200DMA / Fibo 61.8% of 5.1595/6.2445).
Res: 5.7516; 5.7608; 5.7845; 5.8000
Sup: 5.7000; 5.6865; 5.6796; 5.6575