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USDTRY is Under Pressure from the Central Bank of Turkey

11/11/2022 11:34 AM

During the Asian session, the USD/TRY pair shows ambiguous dynamics, consolidating near 18.5000.

Yesterday, the quotes showed negative dynamics caused by the publication of US statistics on consumer inflation for October: the figure increased by 0.4%, remaining unchanged compared to the dynamics of September, although analysts expected an acceleration to 0.6%. YoY, inflation fell from 8.2% to 7.7%, while the market expected only 8.0%, and excluding energy and food products, the value decreased from 0.6% to 0.3% and from 6. 6% to 6.3%. Experts are now confident that the US Federal Reserve will soon slow down its monetary tightening to prevent a sharp deterioration in economic conditions for households and businesses. In December, the interest rate will increase by only 50.0 basis points, and further growth rates may be reduced even more.

Despite the criticism of credit institutions, the Central Bank of Turkey announced the continuation of the regulation policy and, in particular, the tightening of control over foreign exchange markets, which, according to officials, will ultimately ensure financial stability in the country. However, access to credit products is becoming more difficult every day as new fiscal rules increase the securities servicing ratio required for foreign currency deposits to 5.0% from 3.0% previously. Also, the regulator called on financial institutions to persuade customers to convert their savings into lira, which continues to plummet, losing 29% in value this year alone. However, the Turkish economy is showing several optimistic signals in connection with the planned construction of a new gas hub and is also increasing its exports to Europe against the backdrop of the ongoing energy crisis.

Bollinger bands on the daily chart have been showing flat dynamics for a long time: the price range changes slightly, remaining quite spacious for the current market activity level. The MACD indicator is falling, maintaining a relatively strong sell signal (the histogram is below the signal line), and is trying to consolidate below the zero mark. Stochastic reversed into a horizontal plane against the background of the growth of the US currency on Tuesday and Wednesday and did not give a clear signal to open positions.

Resistance levels: 18.5000, 18.6343, 18.7500, 18.8500. | Support levels: 18.3737, 18.3000, 18.1500, 18.0000.

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