The daily RSI reads 86.56, which is well into the overbought territory. A drop back down below 70 could be a confirmation that momentum is reversing in the bearish direction.
The most immediate risk to USD/TRY’s bullish trend is a sustained U.S-Iran ceasefire, with news reports about ongoing talks between both countries, and President Trump calling it Iran’s last chance to secure a deal. If a deal is eventually reached and tensions ease, the crude premium that has kept Turkey’s inflation high will soften, and the lira could strengthen against the dollar.
USD/TRY Long-Term Outlook: Does the Bigger Picture Still Favor the Dollar?
Zooming out on the USD/TRY monthly chart to see the bigger picture reveals a relentless upward climb that has been going on for years. The monthly EMA bands are also widely spread apart, with price sitting well above all four lines.
The August monthly candle has also flipped bullish and broken past the upper wick of last month’s candle, cementing the near-term bullish thesis. And as long as TCMB’s interest rates remain high and inflation doesn’t come down, the pair could keep climbing into the high-40s over the coming months, favoring the dollar over the lira.
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