USDTRY – lira remains firm but faces strong headwinds from 10SMA obstacle
The USDTRY consolidates after strong fall on Monday, which accelerated on double recovery rejection at 4.80 zone last week.
The Turkish lira strengthened further, following initial rally on CBRT’s rate hike last week, with positive sentiment being boosted by decision of the central bank to return to one-week repo rate as its benchmark.
Also Turkey’s Deputy PM and CBRT governor met investors in order to reassure them about the policy direction after recent strong fall of lira on concerns about President Erdogan’s influence on country’s monetary policy.
Fresh weakness repeatedly cracked rising 10SMA (currently at 4.5769 and also near Fibo 38.2% of 4.0294/4.9273 upleg, which marks strong support zone and close below is needed to generate bearish signal.
Sustained break below 10SMA would risk extension towards 4.4643 (Fibo 38.2% of 2018 rally from 3.7153 to 4.9273) and 4.4537 (rising 20SMA) which mark next key support zone.
Conversely, hopes for fresh rally would remain in play while 10 SMA holds, with firm break above double-top at 4.80 zone, needed to confirm bullish scenario.
Daily techs are in bullish/neutral configuration, with fundamentals (CPI report / CB policy meeting / news) focused for fresh direction signals.
Res: 4.6348; 4.7154; 4.8040; 4.9000
Sup: 4.5772; 4.5550; 4.5119; 4.5000