USD/TRY fails to cheer Turkish PM Erdogan’s disappointment, drops to sub-5.74 area

• USD/TRY bears concentrate more on the greenback’s weakness than likely challenges to the Turkish PM.
• Turkey’s opposition party candidate again won the Istanbul Mayor’s race after being rejected by the President during the earlier vote.
• Bears likely weighing the President’s indirect threat to the opposition candidate.

Although Turkish President is likely witnessing embarrassment due to the latest results for the Istanbul’s Mayor’s election, the USD/TRY drops to revisit the last week’s low by testing 5.7312 before clocking in 5.7433 during early Monday.

The Turkish President Recep Tayyip Erdoğan previously rejected the results of Istanbul’s mayor’s race as opposition party candidate Ekrem Imamoglu won.

However, the re-do of the election gave additional disappointment to the national leader as the previously chosen candidate gained extra votes than the earlier round.

While this should have fuelled the USD/TRY pair, likely challenges to the opposition party candidate continue to portray the power President Erdogan could exert on the decision as Bloomberg reports that he suggested Imamoglu might be tried for allegedly insulting a provincial Governor, and a prison sentence could lead to his ouster.

Technical Analysis

50% Fibonacci retracement of February – May upside and 100-day simple moving average (SMA) confluence around 5.6990 – 5.6892 can act as near-term strong support for the pair, a break of which may recall 5.6600 on the chart.

Meanwhile, 5.7870 may limit the pair’s immediate upside ahead of fueling it towards 21-day SMA and 38.2% Fibonacci retracement area of 5.8266 to 5.8307.