The pair returned to strength and rallied back above 200SMA on Thursday, extending recovery into second straight day, following strong fall on Mon/Tue, when it was down 6.5%.
Turkish central bank took a number of ‘back door’ steps in order to support the national currency which fell over 6% last Friday.
The CBRT on Tuesday kept two auctions shut in attempts to fight back negative impact from increased foreign cash buying as Turks lose the confidence and fear fresh currency crisis.
Tightening the monetary policy gave positive results initially, as the action gave positive results and brought lira well below the low that preceded last Friday’s fall, however, negative consequences could be anticipated in the longer term.
Near-term action remains highly volatile, with fresh recovery returning above 200SMA (5.4748) and emerging above top of thick daily cloud (5.1816), after two-day fall was contained by cloud base at 5.3026, was bullish signal.
The pair is regaining bullish momentum and MA’s return to positive configuration that supports recovery.
Holding above 200SMA keeps bullish bias, with close above daily cloud needed to further improve near-term outlook, as recovery already retraced over 50% of 5.8410/5.3037 fall.
Res: 5.5724, 5.6246, 5.6358, 5.7142
Sup: 5.4962, 5.4748, 5.4627, 5.4105
