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USD/TRY Reversal Sparks Rumours of CBRT/State Bank Intervention

TURKEY
  • USD/TRY pulled away from the 8.50 handle firmly in yesterday's session with no discernible catalysts other than technical, leading many to speculate about CBRT/state bank intervention via FX reserves.
  • With gross reserves at $49.7bn (last week) their continued use to defend the currency could put Turkey in an extremely precarious position with the current account deficit only forecast to widen in the near to medium-term.
  • For today, focus shifts to UN+1 Cyprus talks, where little progress towards more amicable relations between Greece & Turkey is expected, given both sides vehement commitment to opposing strategies for the island.
  • Early USD weakness is also supporting some tentative downside in the cross.
  • Yesterday's price action formed a strong reversal pattern on the daily chart, pulling out of overbought territory on the RSI.
  • However, with few TRY positive fundamental catalysts, any downside move will likely be corrective and met with firm support below 8.20.
  • Intraday sup1: 8.2538, Sup2: 8.2046 (near 50% fib drawn off 16/04 low), Res1: 8.3006, Res2: 8.3319
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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