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  • USD/TRY takes rounds to 7.8851 and 7.9021 following its heaviest run-up in 13 days the previous day.
  • US, EU ready to sanction Turkey but President Erdogan shrugs off threats.
  • Risks remains sluggish amid a light calendar, DXY extends previous day’s losses.
  • Turkish Current Account Balance, US Michigan Consumer Sentiment Index will be looked forward, with risk catalysts, for fresh impulse.

USD/TRY looks to the upper end of the daily trading range while flashing 7.8950 as the quote during early Friday. In doing so, the pair barely keeps the previous day’s upside momentum that probed the highest levels since November 26.

Fears that the US and the European Union (EU) will soon levy heavy sanctions on Turkey propelled the quote on Thursday. Reuters quotes anonymous sources while saying, “The US is poised to impose sanctions on Turkey over its acquisition last year of Russian S-400 air defense systems.”

On the other hand, “the EU pledged to expand a list of Turks targeted with travel bans and asset freezes over controversial energy exploration in the eastern Mediterranean,” said Bloomberg.

Even so, “Turkish President Tayyip Erdogan accused the European Union on Wednesday of never acting honestly towards his country and said Ankara was not concerned by any economic sanctions the bloc might impose on it,” per Reuters. The Turkish national leader also remains less worried about the US sanctions due to his alleged dislike of the Western world.

Elsewhere, the risk remains sluggish amid vaccine hopes and the US stimulus expectations. Though, Brexit challenges and the coronavirus (COVID-19) woes in the US challenge the market sentiment.

That said, USD/TRY traders may look forward to Turkey’s Current Account Balance data for October, expected $-2.7 B versus $-2.364 B, for immediate direction. However, major attention will be given to the US consumer sentiment figures and the risk catalysts for a clearer view.

Read: US Michigan Consumer Sentiment December Preview: For once consumer attitudes may not matter

Technical analysis

Sustained trading beyond 21-day SMA, currently around 7.6665, directs the USD/TRY bulls towards a 50-day SMA level of 7.9454.