USD/TRY outlook: Turkish lira collapses following shocking replacement of CBRT's governor
USD/TRY
Turkish lira was the top loser of the Asian session on Monday, opening with a huge gap lower vs the dollar and losing over 13% during the session.
Lira fell to the lowest in over 4 months (8.5015) after closing at 7.2087 last Friday, following surprise action over the weekend as President Erdogan sacked the central bank governor, following recent significant rate hike.
This is the third change of the head of Turkey’s central bank in a less than two years.
Lira managed to recover ground after the initial shock and the pair returned below psychological 8.00 level, as the new governor calmed markets by promises of keeping monetary policy stable. Daily studies turned to full bullish setup following overnight’s action with today’s close below cracked Fibo support at 7.8878 (38.2% of 6.8951/8.5015) needed to partially offset negative impact and strengthen lira’s tone for further recovery.
Key supports lay at 7.5088 and 7.4599 (Fibo 61.8%/top of daily cloud) and break here would further improve lira’s stance. However, since the move was inspired by fundamentals, all eyes will be on further steps and comments from CBRT’s top official.
Res: 8.0000; 8.1224; 8.1433; 8.5015
Sup: 7.9000; 7.8879; 7.7762; 7.6983
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