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USDTRY Market Update

12/29/2022 11:08 AM

The Turkish lira continues to trade in an extremely narrow range of 18.7000–18.5000, artificially holding back from leaving it.

Last week, the main financial regulator of the Republic of Turkey sent out notices to commercial banks asking them to refrain from buying large amounts of US currency for their corporate clients so as not to provoke an increase in the USD/TRY pair before the new year. Since the beginning of autumn, the agency has already artificially limited foreign exchange operations several times, focusing on the priorities set by the country's leadership, which believes that only loose monetary policy can lead to economic growth and record inflation is only a temporary problem that will be resolved along with the macroeconomic recovery indicators.

Meanwhile, Turkey is still pursuing its attempts to take a central place in the energy agenda of the Mediterranean, the Caspian Sea, and the Middle East and reduce its dependence on the supply of resources from outside. Last week, President Recep Tayyip Erdogan announced the discovery of a new gas field in the Black Sea, whose reserves are estimated at 58.0B cubic meters, and the total cost is 1.0T dollars. The total gas volume in Turkish territorial waters has risen to 710.0B cubic meters.

Quotations of the USD Index are held at 104.000, and the statistics published yesterday could not have a serious impact on their dynamics since the market almost completely ignored the decline in the index of pending sales in the housing market by 4.0%, although analysts assumed a slowdown in the indicator to –0.8%. The indicator consolidated at 73.9 points, below 77.0 points a month earlier, and this is the thirteenth consecutive month of negative dynamics. Today is expected to publish data on initial applications for unemployment benefits, which may increase to 225.0K from 216.0K a week earlier, putting new pressure on the position of the US currency.

On the four-hour chart, the quotes of the USD/TRY pair are moving within the next wave of the global side corridor.

Technical indicators continue to hold a stable buy signal: the range of EMA fluctuations on the Alligator indicator is still directed upwards, while the histogram of the AO oscillator remains in the buy zone, forming new rising bars.

Support levels: 18.6800, 18.6200. | Resistance levels: 18.7400, 18.7850.

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