Turkish lira stabilizes on CBRT’s easing; all eyes on Q1 GDP

The Turkish lira stabilizes within narrow range between rising 20SMA and south turning 10SMA, with threats of fresh weakness following post-intervention rally, fading.
The CBRT’s decision to undo tightening and lower interest rates by 150 bp to 24% provides temporary relief.
The step can be argued by current economic situation in the country, however, the situation in the market is not supportive for such decision.
The central bank aimed to stabilize the national currency ahead of release of Turkey’s Q1 GDP data on 31 May, as the country slipped into recession in 2018 (Q4 -3.0%), as further negative results would additionally weigh on lira.
USDTRY’s overall picture is bullish, but bulls lost pace following last week’s pullback from new 2019 high.
Further negative signals can be expected on sustained break below rising 20SMA (6.0178) and 30SMA (5.9366), but reversal signal would require deeper fall and close below 5.8851 pivot (Fibo 38.2% of 5.3037/6.2445).
Conversely, eventual close above 10SMA (6.0596) would risk further extension of recovery from post-intervention low at 5.9378.

Res: 6.0912; 6.1274; 6.2018; 6.2445
Sup: 6.0177; 6.0000; 5.9864; 5.9378