Turkish lira continues to weaken
The pair extends advance from 5.8382 (16 Jan trough) and pressures important barrier at 5.9875 (2020 high, posted on 8 Jan) on Thursday.
Completion of corrective phase (5.6875/5.8382) is expected to spark fresh extension of larger uptrend from 5.1323 (29 Nov 2018 low), with psychological 6.0 barrier being the first target.
Lira remains in defense since mid-Jan after modest advance on CBRT rate cut, additionally pressured by rising fears about China virus spreading and traders’ exodus to safer assets.
Bullish USDTRY studies support scenario, with rising daily Tenkan-sen (5.9378) marking solid support, expected to keep the downside protected and maintain bullish bias.
Turkey central bank’s governor comments today that current ‘dollarization’ of Turks turning to more stable foreign currencies is expected to fade further and that lira’s real exchange rate is competitive for now, did not spark stronger reaction of lira which continues to trade in red.
Res: 5.9875; 6.0000; 6.0227; 6.0445
Sup: 5.9773; 5.9573; 5.9378; 5.9190