The USDTRY holds in tight range on Thursday and awaiting key event today, the CBRT rate decision, due at 11:00 GMT.
The central bank is expected to hike rates in order to fight rising inflation, with expectations holding between 50 and 100bps increase, following 300bps hike in an unscheduled meeting last month.
From the economic point of view, further tightening is necessary, but the influence of politics cannot be ignored.
Turkish President Erdogan is looking to take more control over the central bank, in order to further support his low-rates policy, to boost the economy.
Should the CBRT stay on hold today this may raise a question overs its independence and send lira significantly lower.
Such scenario could bring in focus recent record high at 4.9273 and risk test of psychological 5.00 barrier, which was not until recently on forecast, with break higher to take lira again in the uncharted territory.
Fibonacci projections at 5.0406 (123.6%) and 5.1107 (138.2%) would be initial target, with stronger acceleration capable of travelling to Fibo 161.8% expansion at 5.2240.
If the central bank raises rates today, lira could strengthen further and extend above last month’s post rate hike high at 4.4473, towards 4.3724 (Fibo 61.8% of 4.0294/4.9273 upleg).
Res: 4.5782, 4.6280, 4.6782, 4.8020
Sup: 4.5087, 4.4783, 4.4473, 4.4240