USD/TRY briefly recaptures 50-DMA as the rebound extends
- USD/TRY is building onto Monday’s 6% rebound as lira bulls give up again.
- Turkish Finance Minister said there were no interventions on Dec 20.
- USD/TRY eyes a daily closing above 50-DMA hurdle amid bearish RSI.
USD/TRY is posting small gains, looking to extend Monday’s rebound amid a renewed uptick in the US dollar across the board.
Despite the risk-on market mood due to ebbing Omicron worries, the greenback is attempting a tepid bounce, although the upside follow-through is likely to lack momentum amid subdued Treasury yields.
The main catalyst behind USD/TRY’s recent price action is the speculations surrounding the Turkish government’s intervention in the forex market to stem the lira’s downward spiral.
However, the spot rebounded 6% on Monday, as the lira lost ground once again after Turkey’s Treasury and Finance Minister Nureddin Nebati said that “there were no interventions that night, neither from public banks or anyone else.”
“Individuals raced that night to sell their dollars, thanks to the confidence created by our President Recep Tayyip Erdoğan,” he added.
Amidst the fx plays by the Turkish authorities, the Omicron covid variant-driven broader market sentiment will continue to have a significant bearing on the currency pair.
Looking at USD/TRY’s technical chart, the spot has once again found solid support at the critical 100-Daily Moving Average (DMA) support at 10.15.
Going forward, recapturing 50-DMA at 11.65 on a daily closing basis is critical for initiating any meaningful recovery towards the bearish 21-DMA of 13.43.
Alternatively, a sustained break below the 100-DMA will threaten the 200-DMA support at 9.29.
The 14-day Relative Strength Index (RSI) stays bearish below the midline, suggesting that the recovery momentum could likely remain short-lived.
USD/TRY: Daily chart
