USD/TRY looks to stabilize around 12.50 ahead of key announcement
|- USD/TRY licks its wounds amid the recent whirlwind linked to the lira.
- Turkey to announce details of new economic measures at 1100 GMT.
- 50-DMA support remains at risk, lira could extend the correction.
USD/TRY is on a roller-coaster ride for the second consecutive day on Tuesday, as the beleaguered lira remains at the mercy of Turkish President Tayyip Erdogan’s whims and fancies.
At the time of writing, USD/TRY is losing about 6% on the day, trading around the 12.50 level, having rebounded firmly from monthly lows of 11.10 reached earlier today. Despite the sharp recovery, the pair is up nearly 50% from the levels seen in September this year.
On Monday, the lira tumbled to fresh record lows of 18.37 against the greenback, although staged a historic recovery of 25% and jumped to 13.37 after President Erdogan announced a rescue plan to protect citizens against the lira’s downfall.
The government is presenting a new financial alternative for citizens' savings to soothe their worries over exchange rates, which have reached record highs in recent days, said Erdogan.
Turkish Finance Minister Nureddin Nebati said he will announce the details of new economic measures aimed at halting further dollarization at 1100 GMT on Tuesday,
Banks will start implementing transactions of a new instrument on Tuesday, Nebati added.
Looking at USD/TRY’s technical chart, the bulls have bounced off a dip below the critical 50-Daily Moving Average (DMA) at 11.41.
A sustained break below the latter will call for a test of the ascending 100-DMA at 10.00, which also happens to be a key psychological magnet.
The 14-day Relative Strength Index (RSI) has pierced the midline for the downside, suggesting that further correction in USD/TRY cannot be ruled out.
USD/TRY: Daily chart
On the flip side, recapturing the upward-sloping 21-DMA at 13.64 is critical for initiating a meaningful recovery towards the 14.00 round figure.
Further up, the December 15 highs at 14.84 could be back in the buyers’ radars, above which the 15.00 figure will be probed once again.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.