What Is The Next Move For Turkish lira price

Turkish lira Price Technical Analysis Forecast Update 

The monetary policy committee meeting held next Tuesday, January 24, we anticipate that the CBRT [Turkey's central bank] will hike the benchmark one-week repo rate by 50 basis points to 8.5%, and hike the overnight lending rate by 100 basis points to 9.5%. It is likely that the central bank will want to expand and lift its interest rates corridor, particularly at the top-end, to retain more flexibility
At the close of 2016, Turkey's economy contracted by 1.8% per Q3 GDP figures, while the Turkish lira has lost more than a fifth of its value since September. This devaluation is attributed to mounting political risks following the attempted military coup, as well as increased interest rates and US dollar buoyed by the prospects of an expansionist fiscal policy under Trump.
Such incidents have already adversely impacted Turkey's tourism industry, which contracted by as much as 40% in the summer of 2016. Worsening conditions are likely to continue into 2017, which could strain Turkey's fragile regional and domestic stability.

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Turkish lira Price Technical Analysis

Many of the gains against the Turkish lira have happened in rapid bursts like this latest one. It does not make sense to try to fight such moves – even when they are going on a sharp angle, until a critical support line breaks. In this case, the natural support line sits where the breakout occurred.
Credit Downgrade: Perhaps the nail in the lira’s coffin is the recent credit downgrade by Moody’s, which followed similar action by S&P and is seen as a preview of how Fitch might revise their outlook early this year. This downgrade has made it even more difficult for Turkish banks to operate, as the country’s biggest lenders had no choice but to accept higher funding costs for loans.
To make things worse, Moody’s threw the spotlight on the banking sector’s reliance on wholesale markets, which makes it difficult for banks to cover loans with deposits. In turn, this may require stronger loss absorption among financial institutions for banks to maintain current ratings – something, Moody’s also downgraded its growth outlook for the country to an average of 2.7% which is less than half the average 5.5% growth from 2010 to 2014. Even the Turkish government revised its growth outlook from 4.5% to 3.2% for 2016. Apart from political troubles and banking sector woes, the Turkish lira’s depreciation is starting to translate to sharp gains in prices
The CBRT next meets on January 24th. Traders will undoubtedly be watching carefully if the CBRT fails to act forcefully, I expect a full weakness for the Turkish lira to 4.11 price area

Turkish lira Price

Technical analysis update:

broke down 3.73-4 area will send the Turkish lira to cope with 3.63+_ price zone while keeping stay above those levels, and break up again the last records on 3.94 will send the Turkish lira to 4.11 price 

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