Turkish lira rose to three-month high at 5.6065 against US dollar on Wednesday on better than expected Turkey’s inflation data.
Inflation in June fell to the lowest in one year (15.72% y/y compared to 15.39 in June 2018) from 18.71 previous month.
USDTRY extended weakness from 2019 high at 6.2445 (9 May) and approaching key supports at 5.5922 (200DMA) and 5.5740 (Fibo 61.8% of 5.1595/6.2445 rally).
Rising bearish momentum supports scenario, however, oversold conditions warn of hesitation on approach to key levels.
Broken 100DMA (5.7162) should ideally cap consolidation before fresh push lower.
Sustained break below 5.5922/5.5740 pivots is required to signal continuation of larger downtrend from 6.2445.
On the other side, failure to break lower would generate initial buying signal, which would require confirmation on lift above 20 and 30 DMA’s (5.7814 / 5.8309 respectively).
Res: 5.6627, 5.6993, 5.7162, 5.7433
Sup: 5.5922, 5.5740, 5.5000, 5.4709
