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USDTRY Stop For Breath Below the Record Highs


USDTRY retreat today from record highs that hit yesterday amid the rising tensions in the disputed Nagorno Karabagh region between the Armenia and Azerbaijan. Armenia accused Turkey that one of their fighting jets was downed by a Turkish fighting jet. Investors dumb the Turkish lira on fears that Turkey will enter the conflict, damaging further the already fragile economy. 

U.S. ADP Employment Change Beat Forecasts

In economic data from the USA, the real GDP contracted by 31.4% in the second quarter slightly better than the expectations of -31.7%. The United States Chicago Purchasing Managers’ Index in September came in at 62.4 smashing the expectations of 52. The U.S. ADP Employment Change came in at 749,000, beating the forecasts of 650,000 in September. The U.S. Pending Home Sales came in at 8.8% topping the expectations of 3.2% in August, the yearly reading for the Pending Home Sales registered in at 24.2%; the previous reading was at 15.5%. 

Turkey’s central bank the previous Thursday in a surprise move increase the interest rates by two percentage points to 10.25% from 8.25% boosting the lira. Despite the interest rate increase, the real interest rates remain negative as the inflation in Turkey surpassed the 11% mark. Even the move helped Turkish lira for a couple of days; the central bank needs to do much more to support TRY and rebuild its credibility as Turkey’s economy struggling to return to growth after the coronavirus crisis. 

USDTRY Price Analysis

USDTRY is 0.88% lower at 7.7451 as the bulls stop for breath after hitting yesterday another record high. The technical outlook for USDTRY is clearly bullish, and the pullbacks should be considered as a buying opportunity. 

Support for the USDTRY cross would be met at 7.5105 the low from September 25. Only a break for USDTRY below the 50-day moving average at 7.3527 can invalidate the bullish momentum.

On the other hand, initial resistance for the pair stands at 7.8022 the daily top. The all-time highs from yesterday at 7.8489 would provide the next supply zone. A break above might challenge the 8.00 psychological mark. 

USDTRY Daily Chart