During the Asian session, the USD/TRY pair is growing slightly, testing the 18.1200 mark for a breakdown upwards and renewing all-time highs since December 2021.
Market activity remains rather low as investors await the outcome of US Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium: he may indicate the need to continue the tight monetary policy, which, in particular, involves raising interest rates by 75.0 basis points in during the September meeting, while the current market forecasts are approximately equally likely to increase the indicator by 75.0 and 50.0 basis points.
The lira remains under pressure amid a deteriorating economic outlook for the Turkish economy. Last week, the Central Bank of Turkey adjusted its interest rate by 100.0 basis points to 13%. Officials argued for the continuation of loose monetary policy by creating favorable conditions for local companies and, in particular, maintaining industry and employment growth against the backdrop of a rapidly developing economic crisis. Experts were surprised by the decision of the Turkish financial authorities, going in the opposite direction from the practice of world regulators. According to previously published data from the State Statistical Bureau (TurkStat), in July, inflation exceeded the maximum value since 1998, reaching 79.6% on an annualized basis, and in 2021 alone, prices increased by 19.6%. Turkish President Recep Tayyip Erdogan insists that it is necessary not to raise the rate but to increase the country's investment, production, and employment. Analysts expect accelerated national gross domestic product (GDP) growth in the second quarter due to increased tourist flow. In the first quarter, this figure increased by 7.3%.
On the daily chart, Bollinger bands are growing slightly: the price range is expanding, clearing the way for the bulls to new record highs. The MACD indicator is trying to resume growth but keeps a poor sell signal (the histogram is below the signal line). Stochastic, after a short decline, returns to its maximum levels again, signaling the risks of the US currency being overbought in the ultra-short term.
Resistance levels: 18.1500, 18.3000, 18.5000. | Support levels: 18.0264, 17.8550, 17.7500, 17.6000.