USD/TRY tests former resistance-turned-support after Erdogan's FX threat

Turkish Lira is better bid in Asia with USD/TRY reporting a 1.29 percent drop on the day.
Turkey's President Tayyip Erdogan has warned the finance sector against buying foreign currencies. That is likely pushing Turkey's currency higher.

Omkar Godbole FXStreet Contributor

USD/TRY is currently trading at 5.6780, having printed session lows just below the former resistance-turned-support of the Jan. 3 high of 5.6371.

Turkish President Tayyip Erdogan said on Sunday that those in the finance sector buying foreign currencies on the expectations that the lira will depreciate will pay "a very heavy price" and added further that the Finance Ministry is carrying out work on this.

Erdogan's comments come two days after lira's 4 percent slide, which was the biggest since the currency crisis of August 2018. The slide was likely fueled by central bank's report stating that forex deposits and funds including precious metals held by Turkish locals hit a record high in the week to March 15.

Looking forward, the currency pair may revisit and possibly break above Friday's high of 5.8414 as indicated by the double bottom breakout on the daily chart, as seen below.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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