USD/TRY hovers around 13.00 as Turkey’s President Erdogan reveals a program to protect savers

• The USD/TRY edges low during the New York session, down some1.96%.
• Erdogan’s revealed a program that protects savings from lira’s fluctuations vs. the greenback, the TRY slightly appreciates.
• USD/TRY Technical Outlook: Despite the recent dip spurred by measures to stabilize the Turkish lira, it has an upward bias.

The Turkish lira recovers some of its losses, is trading at 12.9561 during the New York session at the time of writing. The market sentiment is upbeat, as shown by risk-sensitive currencies rising, which benefits Emerging Markets peers. Nevertheless, the lira whipsawed between gains and losses in the last couple of trading days against the greenback, as the CBRT has made 500 basis points cut to its interest rates, despite heightened inflation meandering around the 20%.

Turkey’s President Recep Tayyip Erdogan revealed a program that protects savings from fluctuations in the lira. While that measure shored up the Turkish peer declines, the Borsa Istanbul Index continues its free-fall with a 7.5% decline, triggering another halt to its operations.

Analysts at TD securities commented that in the short term, “the government may have its way and enjoy the current currency rally.” Further added that it will be difficult for the government to maintain its credibility because the commitment will be too big to be sustainable.

That said, the USD/TRY will still be fluctuating within an extensive range, so traders should be aware of developments in Turkey.

USD/TRY Price Forecast: Technical outlook

The USD/TRY daily chart depicts that the pair has an upward bias. However, the downward move spurred by the news of Erdogan’s implementing measures to protect savers stalled around the 50-day moving average (DMA) at 11.3800, bouncing off towards current price levels, as market participants assess what would be the outcome of the Turkish lira in the near and mid-term.

To the upside, the first resistance would be the confluence of daily tops around 13.8722. A breach of the latter would open the door towards the December 13 swing high at 14.6064, followed by a test of December 17 high at 17.04.