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  • USD/TRY regains upside traction and approaches 7.90.
  • The lira continues to give away gains after recent rally.
  • Investors closely follow the exchange rate post-CBRT hike.

The Turkish lira starts the week on the defensive and lifts USD/TRY to multi-day highs in the vicinity of the 7.90 level.

USD/TRY back to 8.00 (and beyond)?

USD/TRY advances for the second consecutive session and extends the ounce off monthly lows in the 7.60 neighbourhood on Monday.

In fact, the pair regained levels seen pre-CBRT interest rate hike in the 7.90 region at the beginning of the week, as market participants increase their inflows to the greenback in light of the recent lira gains… It seems confidence in the domestic currency needs more than a rate hike and auspicious words from President Erdogan.

Moving forward, Turkey’s Capacity Utilization and Manufacturing Confidence are due on Tuesday ahead of the CBRT minutes on Thursday and the Economic Sentiment and the CBRT Financial Stability Report on Friday.

USD/TRY key levels

At the moment the pair is up 3.04% at 7.8644 and faces the next hurdle at 8.0000 (psychological level) followed by 8.0289 (21-day SMA) and finally 8.5777 (all-time high Nov.6). On the downside, a drop below 7.5119 (monthly low Nov.20) would expose 7.3970 (horizontal support line off August’s top) and then 7.0968 (200-day SMA).