USD/TRY rebounds from 2-month lows around 7.6000

USD/TRY drops to fresh lows around 7.60 on Friday.
Bullish momentum in the lira appears quite solid.
The next CBRT meeting will be on November 19.

Pablo Piovano FXStreet

After bottoming out in fresh lows in the 7.60 region, USD/TRY manages to stage a mild rebound to the 7.70 area at the time of writing.

USD/TRY focused on the CBRT

Renewed and rising optimism around the newly appointed economic team in Turkey continues to lend support to the lira and drags USD/TRY to new 2-month lows in the 7.60 region earlier on Friday.

In fact, following changes in the Turkish central bank (CBRT) and the resignation of the Finance minister coupled with auspicious comments from President Erdogan, investors keep the bullish stance unchanged around the lira.

In the meantime, all the attention is on next week’s monetary policy meeting by the CBRT, where market consensus expects an interest rate hike of at least 500 bps in order to restore some stability and credibility to both currency and country.

Also helping the upbeat momentum in TRY, market participants now perceive the Erdogan’s administration could be closer to start implementing the much-needed structural reforms to bring Turkey back to the path of economic growth and stability.

It is worth mentioning that the lira appreciated nearly 12% in the last five sessions. Furthermore, the Turkish currency is about to close its first week with gains after ten consecutive weeks closing in the negative territory. Moreover, from the last 16 weeks, the lira managed to post gains in only 3 of them.

USD/TRY key levels

At the moment the pair is up 0.18% at 7.6738 and a drop below 7.6000 (monthly low Nov.13) would expose 7.5312 (38.2% Fibo of the 2020 rally) and then 72019 (low Aug21). On the flip side, the next hurdle is located at 7.9312 (23.6% Fibo of the 2020 rally) followed by 8.5777 (all-time high Nov.6).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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