USD/TRY firmer around 3.5000

The Turkish Lira is losing further ground today, sending USD/TRY to test the 3.50 area after climbing as high as the 3.55 region in early trade.

USD/TRY off historical tops

The pair is extending the rebound from last week’s troughs in sub-3.3400 levels following a pick up in the demand for the greenback and extra downside pressure in TRY following the bomb blasts in Istanbul over the weekend, with 30 dead and more than 160 wounded.

In the meantime, TRY seems poised for further pullbacks as geopolitical risks have gathered traction as of late and the Federal Reserve is expected to hike rates at its meeting on Wednesday.

In the data space, Turkish GDP figures showed the economy has contracted at an annualized 1.8% during the third quarter, more than the 0.5% drop initially estimated and down from the previous 4.5% gain. Additionally, the Current Account deficit shrunk a tad to $1.67 billion in October.

USD/TRY key levels

At the moment the pair is up 0.86% at 3.5069 and a break above 3.5494 (high Dec.12) would expose 3.5626 (high Dec.5) and finally 3.5860 (historical high Dec.2). On the other hand, the next support lines up at 3.4902 (low Dec.12) followed by 3.4346 (20-day sma) and then 3.3370 (low Dec.8).