USD/TRY continues moving upwards after breaking the all-time high of 7.50. Does it have more room to keep rallying? Let’s find out.
What happened?
The credit rating agency Moody downgraded Turkey’s debt rating to junk. Besides, Moody gave a considerably negative prognosis on the Turkish lira itself and cautioned about the risk of crisis in the country’s balance of payments, which in turn will negatively impact the currency.
However, it’s not all about Turkey in this case as most emerging currencies are loosening this time against the US dollar amid the overall risk-off sentiment on the market. The market sentiment deteriorated after the Fed’s comment on the uncertain economic recovery ahead. As a result, safe-haven currencies such as the US dollar and the Japanese yen were pushed to the upside, while riskier assets were pressed down.
Nevertheless, the Minister of Trade for Turkey, emphasized that Turkey’s economy managed to outrun its peers amid the global pandemic in terms of exports. The Turkish output turned out $12.4 billion in August despite problems with international trade such as difficulties with logistics, border crossing and reduced demand. Anyway, the pair will mainly be driven by the USD’s performance and the overall market sentiment.
Technical tips
USD/TRY has been stuck between two trendlines since the beginning of August. Today, it has finally broken down the upper trendline and surged to the fresh highs above 7.50. The move above the next round number at 7.55 will drive the pair to the key psychological mark of 7.60. In the opposite scenario, if it falls below yesterday’s low of 7.48, the way towards the support of 7.45 will be clear. Follow further Forex news and fresh analytics!
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