Erdogan stated being against a rate hike intended to improve the Liras downfall. He rejected arguments that Turkey is in a financial crisis. These two countries have been disagreeing on some topics like interests in Syria, buying Russian defense systems, and the case of Andrew Brunson.
US President Donald Trump said that the US would double the tariffs on steel and aluminium imports from Turkey. On the other side, Turkish President Erdogan urged all Turkish citizens to sell their USD in order to strengthen TRY.
EUR/USD weakened further, breaking both of our previous support levels 1.1510 and 1.1445 which have now turned to resistances. We could see the pair aiming for the 1.1445 resistance level and even break it aiming for the 1.1510 resistance barrier. On the other side, we could see the pair may break the 1.1375 support barrier and aim lower for the 1.1301 support hurdle.
Erdogan seems to be winning the elections in Turkey according to polls, however other parties did not accept the results yet. The win is expected to give Erdogan sweeping new powers as the president of Turkey in the internal political front. On the monetary front it could be the case that he may try to intervene to CBT’s decisions once again. The Turkish lira strengthened against USD, as political uncertainty was removed with the result and could strengthen further on positive headlines.
USD/TRY opened with a negative gap during today’s Asian morning, breaking the 4.6600 support line and testing the 4.6000 support line. The pair also broke the sideways movement it had for the past ten days, reflecting the strengthening of the TRY side. We could see the pair continue to trade in a bearish market as the RSI reading touched 30 and the sideways motion is broken. Should the bears continue to be in charge, we could see the pair breaking the 4.6000 support line and aim for the 4.5275 support barrier. On the other hand should the bulls take over, we could see the pair breaking the 4.6600 resistance line and aim for the 4.7650 resistance hurdle.