USD/TRY should eventually break below 7.40, if CBRT does not disappoint – Rabobank
|According to analysts from Rabobank, the Turkish lira could continue to recover ground versus the US dollar. They see that if the Central Bank of the Republic of Turkey (CBRT) delivers an expected rate hike next week, USD/TRY could slide further to 7.26/23.
Key Quotes:
“Bullish momentum carried USD/TRY to the all-time high at 8.5793 set on November 6 from around 5.90 at the beginning of 2020. While there was a relatively modest correction in May and a period of stabilisation in June-July, the underlying bullish trend remained intact as sentiment towards the lira did not change.”
“The initial leg lower may extend to around 7.40 where the upside trendline (from the January low) and the horizontal trendline converge offering USD/TRY a potentially solid support. For a break lower the market may have to wait until the CBRT delivers a proper rate hike next week. Assuming that the central bank does not disappoint, USD/TRY should eventually break below 7.40 towards the next important cluster of technical levels at 7.26/23. At this stage the 61.8% retracement at 6.45 is a very ambitious target, but it is important to note that USD/TRY has the history of sharp moves lower.”
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