USD/TRY Price Analysis: Decline finds support at 8.00 and rebounds toward 8.20 as lira loses strength

• Lira trims gains versus the US dollar, still sharply higher from Friday’s close.
• Hopes on COVID-19 vaccine and Albayrak’s resignation boosted TRY.

The Turkish lira is having the best day in months against the US dollar, boosted after weekend’s events in Turkey and amid optimism regarding COVID-19 vaccine that triggered a rally in markets across the globe. The resignation during the weekend of the Finance Minister Berat Albayrak triggered the rally in the lira.

During the Asian session, the US dollar recovered momentum against its G10 rivals and trimmed losses versus EM currencies. Higher US yields and a modest pullback in Wall Street, favored the rebound in USD/TRY. Still, the pair is down by 4%.

The decline found support at the 8.00 area and as of writing it trades at 8.1699, back above the 20-day moving average. The bullish trend in the long and short-term remains intact. A slide under 8.00 would increase the bearish pressure for a test of 7.8000, the next support. On the upside, now 8.3500 is the immediate resistance, followed by the 8.4000 zone.

USD/TRY daily chart