Turkish lira was boosted by election results, but key obstacles still hold

The Turkish lira holds firmer tone on Monday, following results of local elections which showed that President Erdogan’s ruling party lost control of the capital and showed much weaker results in other big cities.
The USDTRY pair stands at 5.5220 in US session on Monday, down from European high at 5.6980 and tested strong support provided by the top of thick daily cloud, which so far holds.
Repeated strong upside rejections (Friday / today) and changing sentiment after Erdogan’s party defeat in big cities could partially offset negative impact from rising concerns about fresh crisis which caused lira’s loss of 30% last year and further boost lira.
Break of key obstacles at 5.5181 and 5.4828 (daily cloud top / converged rising 20/200SMA’s) would spark fresh lira’s rally.
Markets need to digest election results to generate fresh direction signals, however, the outlook for lira is expected to remain weak if  key 200SMA support resists attack.

Res: 5.6358; 5.6718; 5.6980; 5.7142
Sup: 5.5144; 5.4828; 5.4297; 5.3800