FxWirePro: Turkish Lira slumps to 1-1/2 year low as manufacturing activity contracts amid coronavirus fears
Wednesday, April 1, 2020 8:59 AM UTC
- The Turkish Lira plunged to a 1-1/2 year trough as the spread of the coronavirus weighed on investor sentiment.
- On Tuesday, Health Minister Fahrettin Koca announced that more than 200 people have died from COVID-19 in Turkey, ramping up tests to more than 15,000 a day.
- Turkey has suspended all international flights, limited domestic travel, shut schools, bars and cafes, suspended mass prayers and sports fixtures. However, after a cabinet meeting on Monday, Erdogan said it was necessary to maintain output to sustain the supply of basic goods and support exports.
- Moreover, the selling pressure around the Turkish currency intensified after data showed Turkey's Manufacturing PMI fell to 48.1 in March from 52.4 in February, pointing to the biggest contraction in factory activity in seven months.
- USD/TRY is trading 0.5 percent higher at 6.6461, having hit a high of 6.6492 earlier, its highest since September 2018.
- Momentum indicators are bullish - RSI strong at 73, MACD supports upside and Stochs are at oversold levels.
- Immediate resistance is located at 6.6585, any close above could take it above 6.6725 / 6.7315.
- On the downside, support is seen at 6.5879 and break below could take it near 6.5613.