USDTRY Jumps Higher As Turkey's GDP Contracts By 9.9%

Summary:

USDTRY resumes the uptrend today after three straight trading session of loses, after disappointing GDP figure from Turkey.

USDTRY resumes the uptrend today after three straight trading session of loses, after disappointing GDP figure from Turkey.
Turkey’s GDP contracted by 9.9% in the second quarter of 2020, marking the worst contraction in the last decade for the Turkish economy. The figure was better than the market’s expectation of a contraction of 11% and better than some other economies, such as Eurozone which shrank by 12.1% in the second quarter, and Poland’s GDP contracted by 17%.
Turkey’s economy grew by 4.4% in the 1Q boosted by a rise in lending that helped the construction and manufacturing sector.

The coronavirus pandemic crashed Turkey’s economy after the government in March started the lockdown, which eliminated almost all economic activity.
The manufacturing sector contracted by 16%, while the services sector contracted by 25%. The biggest hit will come from the tourism sector as the arrivals in the country during summer are at historically low levels that mean that the Turkish economy will shrink further till the end of the year.

Turkish economy faces many problems, and the coronavirus pandemic made the situation even worse. The Turkish lira TRY is the only currency that depreciates today against the greenback, as USD is under pressure across the board.

USDTRY Analysis

USDTRY is 0.16% higher at 7.3453, as the three days correction stalled around 7.3250 area. The recent correction from record highs is losing momentum today, and that signals further selling for Turkish lira, as the USD weakness continues today.

Minor resistance for USDTRY pair stands at 7.3486 the daily top. More selling pressure would be met at 7.3844 the high from Friday’s trading session. The all-time high at 7,4174 is the next supply zone.

On the flip side, USDTRY support is at 7.3254 the daily low. Next support would be met at 7.1932 the recent dip from August 21. What can cancel the bullish picture is a break below the 50-day moving average at 7.0435.