USD/TRY extends the rebound from 7.60, all eyes on the CBRT

• USD/TRY adds to Monday’s gains and tests 7.80.
• Strong support emerged in the 7.60 area so far (November 13/16).
• Consensus expects the CBRT to raise rates by 500 bps.

The Turkish lira has started the week on a negative footing and pushes USD/TRY back to the 7.80 region on Tuesday.

USD/TRY focused on CBRT

USD/TRY adds to Monday’s upside after meeting solid contention in the 7.60 zone in the past couple of sessions. The move up, however, struggles to surpass the 7.80 level for the time being.

In the meantime, the rally in the lira appears to have halted pari passu with the rising cautiousness among investors ahead of the crucial CBRT meeting on November 19. On the latter, consensus among market participants points to, at least, a 500 bps interest rate hike in the One-Week Repo Rate.

Investors remain vigilant, however, after recent data from the CBRT showed locals’ total FX deposits climbed to an all-time high of more than $224 billion on the week ended on November 6, while the demand for dollars barely slowed its pace despite the recent lira rally.

USD/TRY key levels

At the moment the pair is up 0.57% at 7.7315 and faces the next hurdle at 7.7959 (high Nov.17) followed by 7.8230 (55-day SMA) and finally 8.5777 (all-time high Nov.6). On the downside, a drop below 7.5985 (monthly low Nov.16) would expose 7.4822 (100-day SMA) and then 72019 (low Aug21).