- USD/TRY attempts a bounce after falling 2% so far this Friday.
- Defending the 50-DMA support is critical for the bulls.
- All eyes remain on the Biden-Erdogan meeting.
USD/TRY is attempting a recovery from monthly lows of 8.2775 reached in early European trading, although the selling interest remains unabated ahead of the all-important meeting between US President Joe Biden and his Turkish counterpart Tayyip Erdogan.
The latest uptick in the spot could be attributed to the broad US dollar rebound, as the greenback recover Thursday’s steep losses induced by dovish Fed expectations, in the aftermath of a faster-than-expected increase in the US inflation.
Meanwhile, the Turkish lira is on a six-day winning streak against the dollar, correcting sharply from the record highs clocked on June 2 at 8.8049. The lira bulls appear to take a breather ahead of the eagerly awaited meeting and the US UoM Consumer Sentiment data.
Looking at USD/TRY’s daily technical chart, the price has managed to recapture the critical upward-sloping 50-daily moving average (DMA) at 8.3342.
A daily closing above the latter is needed to extend the bearish momentum in the spot. The next relevant downside target is seen at the April 29 low of 8.14 if the monthly lows caves in.
The 14-day Relative Strength Index (RSI) is pointing lower below the midline, suggesting that the cross is not out of the woods yet.
USD/TRY: Daily chart
On the flip side, the bulls seek acceptance above the mildly bearish 21-DMA at 8.4905, on a daily closing basis, in order to gain a meaningful recovery.
Thursday’s high at 8.5999 is likely to emerge as a tough upside barrier should the recovery momentum pick up pace.