The Turkish lira weakened after the central bank struggled to explain moves in foreign-currency reserves, fueling concern about the state of the nation’s finances amid the looming prospect of more political upheaval.
Turkey has around $118 billion of foreign-currency debt coming due within the next 12 months and relies on the central bank’s buffers to meet its obligations if the flow of capital that finances the economy begins to slow.
Foreign investors have already withdrawn a net $1.6 billion from the nation’s lira bond market this year amid political and economic turbulence that has rocked the country’s markets.
Last month, JPMorgan Chase & Co. recommend investors sell the lira, citing the drawdown of the buffers in March. Earlier this month, Moody’s Investor Service said the drop was credit negative, as the country’s “very low” levels of reserves cover less than half of its shot-term external payments.
This could only mean one thing, the Lira will fall against the US Dollar, which means the USD/TRY will increase, but how much…lets go to the charts to find out?
Monthly Chart (Curve Timeframe) – monthly supply is at 6.5000 and monthly demand is at 4.5000.
Weekly Chart (Trend Timeframe) – the trend is up.
Daily Chart (Entry) – the chart suggests price is heading to the weekly supply at 6.1000, but there is no entry at this time.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.