USDTRY
The Central Bank of the Republic of Turkey (CBRT) has left its key interest rate unchanged.
The CBRT retains the 17.00% benchmark for the 1-week repo rate, and this has led to some strengthening of the Lira against the US Dollar. The USDTRY is down 0.33% as of the time of writing and therefore continues to trade in the range in which price action has stayed in for the last 4 trading sessions.
The ascending trendline which connects the lows of August 2019, November 2019 and January 2020 is expected to provide overriding support that also intersects the 6.80789 horizontal support level. A further decline in the USDTRY in the medium term relies on the breakdown of this support, which opens the door towards 6.68817 and possibly 6.59653 and 6.38548. However, the price needs to break down the lower barrier of the present range, which is seen at 6.89410, for this move to be initiated at the very least.
On the other hand, some recovery on the USDTRY in the short term has to rely on the break of the 6.99821 resistance which serves as the ceiling for this range. If this move succeeds, then 7.08515 and 7.19656 may come into focus. However, this move requires fundamental support for the greenback and a scaleback of the carry trade volumes. This looks a distant reality. It could be more realistic to look at any rallies as opportunities to re-enter short positions on the USDTRY, until market conditions change.
