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USDTRY Market Update

2/17/2023 10:47 AM

The USD/TRY pair is showing moderate growth, testing 18.8550 for a breakout. On Wednesday, February 15, the Turkish lira fell sharply against the backdrop of the opening of the Istanbul Stock Exchange after a week-long break, which was caused by the strongest earthquakes in Turkey and Syria since 1939.

According to Bloomberg, the Turkish Enterprise and Business Confederation (Türkonfed) has published preliminary data on damage to the economy from a natural disaster in the southeast of the country, which, according to experts, will exceed 84.0 billion dollars: damage to residential buildings is estimated at 70.8 billion dollars, a labor shortage of 2.9 billion dollars, and budget revenues will decrease by 10.4 billion dollars. The damage to infrastructure, including roads and power grids, as well as medical and educational facilities, could push the country's budget deficit to 5.4% of Gross Domestic Product (GDP) this year, compared to the government's estimate of 3.5%. At the same time, a state of emergency will be in effect in 10 Turkish provinces for three months, which will put even more serious pressure on the economy. According to the latest data, more than 35.0 thousand people died in Turkey as a result of the disaster and more than 100.0 thousand were injured.

In turn, the American dollar receives support from the US macroeconomic background. On Thursday, data on producer inflation were released, reflecting acceleration in January by 0.7% after falling by 0.2% in the previous month, while analysts had expected growth by 0.4%; and in annual terms, the Producer Price Index slowed down from 6.5% to 6.0%, which also turned out to be worse than market expectations at the level of 5.4%. Traders once again made sure that the US Federal Reserve is now quite far from the possible completion of the current cycle of raising the interest rate, and it is not worth talking about an imminent trend reversal. In turn, the number of Initial Jobless Claims for the week ended February 10 adjusted from 195.0 thousand to 194.0 thousand, while analysts expected the figure to rise to 200.0 thousand.

Bollinger Bands in D1 chart show unsteady growth. The price range is slightly expanding from above, having difficulty keeping up with the development of the "bullish" trend of the recent days. MACD histogram is slightly growing keeping a weak buy signal (located above the signal line). Stochastic remains horizontal, located approximately in the center of its area, which indicates a delicate balance of power in the ultra-short term.

Resistance levels: 18.8818, 18.9128, 18.9500, 19.0000. | Support levels: 18.8500, 18.8281, 18.8000, 18.7500.

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