Turkish lira remains at the back foot; eyes July 24 policy meeting for stronger signal

The Turkish lira recovered modestly on Tuesday, following strong fall on Monday (the biggest one-day fall since 4 May 2016), sparked by announcement that Turkish President Erdogan appointed his son in law as financial minister.
Lira remains under strong pressure on concerns that new executive presidential system would have more negative impact on monetary policy.
Turkish central bank acted twice and hike interest rates in May and June, in rather unexpected action, but the action proved to be inadequate to seriously tackle the main problem – two-digit inflation which reached the highest level since 2003 in annualized 15.3 figure.
Traders also fear that President Erdogan, who supports the policy of lower interest rates and now with much bigger power, could further influence the monetary policy, which could spark further weakness of lira.
Monday’s 4.51 to 4.75 rally brought the pair close to the upper boundary of three-week range, break of which would open way for USDTRY pair to attack recent all-time high at 4.9273 and to challenge psychological 5.00 barrier.
Rising thick daily cloud continues to underpin and bounce from cloud top was bullish signal, along with strong bullish setup of daily / weekly studies.
The pair may hold within initial 4.51/4.77 range, supported by daily cloud top and may even dip lower to retest higher base at 4.4470, before CBRT policy meeting on 24 July, which could generate stronger direction signal.
If central bank fails to act stronger and make adequate rate hike to fight rising inflation (so far this could be seen as main scenario among the traders) the USDTRY pair may rally for 5.00+ gains.
Alternative scenario requires, sustained break below higher base at 4.4470 zone, to generate stronger bearish signal.

Res: 4.7512; 4.7754; 4.8041; 4.9273
Sup: 4.6452; 4.6317; 4.6131; 4.5579