Will EUR/TRY test resistance as renewed strength in Turkey core inflation limits upside?

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Euro vs Turkish Lira rises 0.62% today

Highlights

Core inflation is accelerating in Turkey, intensifying pressure on the Lira's value and elevating risk of further depreciation.
Rising oil prices are worsening Turkey's current account deficit, while political limits restrict central bank actions against inflation.
EUR/TRY remains in a strong bullish trend with price expected between ₺53.574 and ₺54.1124, though overbought signals suggest possible short-term pullback.

Lira pressured by surging core inflation and constrained policy response

Renewed strength in Turkey's core inflation has emerged, reinforcing concerns about the country's underlying price pressures and eroding the Turkish Lira's purchasing power, according to Tradingpedia. At the same time, higher oil prices are worsening Turkey's import bill, amplifying its current account challenges and further exposing the Lira to downside risk. With political constraints limiting the Central Bank of Turkey's ability to implement further rate hikes, policymakers' options to counter rising inflation remain limited, which collectively maintains pressure on the domestic currency.

Overbought signals limit upside as neutrality tempers bullish setup

On the technical front, EUR/TRY remains above the 20-period (₺53.5562), 50-period (₺53.6011), and 200-period (₺51.8964) moving averages on the hourly chart. Immediate support is identified at the Ichimoku Kijun level of ₺53.6161. The Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) both appear neutral, signaling a lack of decisive momentum. The Relative Strength Index (RSI) at 54.85 and Commodity Channel Index (CCI) are in Buy territory, while the Stochastic RSI is overbought, suggesting possible short-term exhaustion. Bull/Bear Power signals strong buyer dominance, and the Awesome Oscillator aligns with a bullish tone, but overbought readings and neutral momentum indicators may indicate limited upside in the immediate term.

High probability of gains as volatility band guides near-term outlook

Over the next two to three trading days, EUR/TRY is expected to fluctuate within a typical volatility band of ₺53.574 to ₺54.1124. The likelihood of an upward move remains very high, with downside risk assessed as low. If the price breaks decisively above ₺54.1124, further bullish momentum could develop, while a sustained drop below support at ₺53.6161 could trigger a corrective pullback.

Anton Kharitonov, expert at Traders Union, sees EUR/TRY supported by persistent inflation pressures and unfavorable import dynamics. Technicals show price above key moving averages, but neutral momentum gauges and overbought short-term signals suggest limited immediate upside. Political limitations on further rate hikes keep the Lira vulnerable. "While the base case favors EUR/TRY stability above ₺53.6161, I remain cautious unless buyers can push the pair decisively above ₺54.1124."

Earlier, analysts noted that the Euro vs Turkish Lira had demonstrated resilience, with technical signals hinting at the possibility of short-term pullback amid bullish momentum. The current environment of rising core inflation in Turkey and persistent Lira weakness strengthens this outlook, making a break above ₺54.1124 a key trigger for traders to monitor for the next potential leg higher.

Source of Data: EUR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.