USD/TRY testing session tops around 4.28

• The Turkish Lira resumes the downside despite weaker buck.
• TRY reverts gains after climbing to 4.22 on Thursday.
• Domestic politics remain poised to drive sentiment around the Lira.

The selling pressure appears to have returned to the Turkish currency, at the same time pushing USD/TRY to fresh daily highs in the boundaries of 4.28 the figure.

USD/TRY supported near 4.22

After two consecutive daily pullbacks, the pair is now gathering some traction following a test of multi-day lows in the 4.22 region on Thursday, coincident with the 10-day sma.

TRY has been accelerating its depreciation following the US withdrawal from the Iran nuclear deal, which in turn lifted crude oil prices and threatens to translate into further pressure on Turkish consumer prices.

However, the likelihood of an emergency rate hike by the CBRT lent some support to the Lira in the past couple of sessions, although those rumours appear to have lost some vigour as of late.

It is worth mentioning that a weaker currency could not be welcomed in light of the upcoming elections in Turkey, adding to the already heightened uncertainty and carrying the potential of some tensions between President Erdogan and Governor Cetinkaya.

USD/TRY key levels

At the moment the pair is up 1.03% at 4.2750 and a breakout of 4.3084 (high May 10) would aim for 4.3746 (All-time high May 9) and finally 4.3800 (psychological handle). On the flip side, the next support is located at 4.2197 (low May 10) followed by 4.2180 (10-day sma) and then 4.1419 (21-day sma).