Bias: EUR/TRY is bullish-to-range-bound, positioned above its 90-day average and in the upper half of the 3-month range, suggesting limited upside unless new triggers emerge.
Key drivers:
Rate gap: The ECB appears to hold a tighter stance than the Turkish central bank’s easing path, supporting the euro versus the lira.
Risk/commodities: Oil is at 60-day highs, lifting energy costs for Turkey and adding inflation pressure, which tends to weigh on the lira.
One macro factor: Eurozone inflation is forecast to ease into next year, supporting a steadier euro backdrop.
Range: Expect EUR/TRY to drift within the recent 3-month range, with a mild tilt toward the upper end and occasional tests of the highs.
What could change it:
Upside risk: A sharper-than-expected ECB hawkish shift or stronger euro data.
Downside risk: A renewed Turkish inflation spike or a surprise acceleration in Turkish policy easing.