FxWirePro: Turkish lira falls sharply against U.S. dollar after Moody's cut Turkey rating to 'junk'

• USD/TRY is currently trading at 2.9908 levels.
   
• It made intraday high at 2.9987 and low at 2.9830 levels.
   
• Intraday bias remains bullish for the moment.
   
• Key resistances are seen at 2.9977, 3.0085, 3.0268, 3.0392, 3.0675, 3.0749, 3.0921, 3.0967 and 3.1048 levels respectively.
   
• A sustained close below 2.98 will drag the parity down towards key supports around 2.9738, 2.9649, 2.9491, 2.9314, 2.9207, 2.9178, 2.9015 and 2.8847 thereafter.
   
• Important to note here that 20D, 30D and 55D EMA heads up and confirms the bullish trend in a daily chart.
   
• Moody's downgrades Turkey's issuer and bond ratings to ba1 with a stable outlook.
   
• Moody's-lowered Turkey's long-term foreign-currency bond ceiling to baa2 from BAA1, and its long-term foreign-currency deposit ceiling to BA2 from BAA3.
   
• Moody's on Turkey - Stable outlook balances downside risks from increasing balance of payments pressures vs credit-positive considerations from "flexible" economy.
   
• Moody's on Turkey - Govt's response to unsuccessful coup attempt raises concerns regarding effectiveness of govt policy, rule of law going forward.
   
• Moody's on Turkey- "slow deterioration in turkey's credit profile will continue over the next 2-3 years".
   
• Moody's on Turkey - Expects real GDP to grow at an average of 2.7% over 2016-19 period; significantly lower than average growth of 5.5% over 2010-14.

We prefer to go long on USD/TRY only above 2.9977, stop loss at 2.98 and target of 3.0114/3.0268.