CBRT Survey: Year-End CPI Expectation Rises to 30.04%

The rise in the year-end CPI expectation to 30.04% in the CBRT survey signals that the deterioration in inflation expectations continues and could create mild negative pressure on the Turkish lira. However, EURTRY's last close at 55.77 is trading very close to its SMA20 (55.71) and SMA50 (55.78) levels; in other words, the price is compressed around its short-term averages. RSI at 51 is in neutral territory and slightly above the MACD signal line but still in negative territory, indicating that momentum is weak and directionless. Since the 24-hour change is only 0.18%, the impact of the news may remain limited; the upward reaction may be capped at the 55.85-56.00 resistance. For this reason, I assess the direction as slightly upward-biased but with low confidence.

The rise in the year-end CPI expectation to 30.04% in the CBRT survey signals a deterioration in inflation expectations and could create mild negative pressure on the Turkish lira. On the technical side, the price is above the SMA20 and SMA50, the RSI is at 62 and above the MACD signal line; this picture supports the upward trend in the short term. However, the 24-hour change of only 0.09% shows that the move has not yet gained strong momentum. The impact of the news may be limited and gradual; moderate upward pressure should be expected rather than a sudden jump. Still, since expectation surveys alone are unlikely to create sharp exchange rate movements, the confidence level should be kept at a medium level.