- USD/TRY licks its wounds near early December lows after the biggest daily slump on record.
- Erdogan unveiled series of measures to stop further dollarization, around $1.0 billion was sold after announcement.
- Steady RSI suggests further consolidation of losses, 21-DMA guards immediate upside.
- 50-DMA acts as additional downside filter, bulls need clear break of $14.65 for confirmation.
USD/TRY pares the heaviest daily fall on record while taking rounds to $13.50, up 0.40% intraday, during early Tuesday.
The Turkish lira (TRY) pair’s downpour could be linked to a clear break of an ascending support line from November, in addition to the fundamental moves by Turkish President Recep Tayyip Erdogan.
“Speaking after a Cabinet meeting, Erdogan said the measures would ensure citizens would not have to convert their lira into foreign currency over the lira crash, including a deposit guarantee promise,” per Reuters. The news also quotes the head of the Turkish Banks Association while saying, “Around $1 billion was sold in markets after Erdogan unveiled the measures.”
Even so, one-month-old horizontal support around $13.20-15 restricts the quote’s further downside.
Although the MACD signals do favor bears, a clear downside break of $13.15 becomes necessary for the USD/TRY sellers to keep reins.
In doing so, the 50-DMA level of $11.43 and the $10.00 psychological magnet should become their favorites.
Alternatively, steady RSI and failures to conquer the immediate support can favor USD/TRY bulls if the quote rises past the 20-DMA hurdle surrounding $13.75.
Following that, the $14.00 round figure and previous support line near $14.60 will test the pair buyers before resuming the run-up to aim for the $20.00 round figure. During the rise, the $15.70 and the latest all-time high of $18.36 will be important to watch.
USD/TRY: Daily chart
Trend: Further recovery expected