Bias: bullish-to-range-bound, as the pair sits above the 90-day average and in the upper half of the three-month range, signaling limited upside before a potential pause.
Key drivers:
- Rate gap: The US Federal Reserve is expected to ease toward a neutral stance in 2026, which supports USD when policy bets shift, while Turkey has pursued cautious easing after a sizable cut, keeping the lira under pressure, with global rate paths and inflation risk amplifying the divergence.
- One macro factor: upcoming US payrolls and unemployment data will shape Fed messaging and USD moves, with a strong print keeping the dollar firm and a soft print adding to rate-cut bets.
Range: USD/TRY is likely to drift toward the upper end of the three-month range and hover near the highs.
What could change it:
- Upside risk: hawkish Fed signals or stronger US data that keeps USD bid.
- Downside risk: softer US data and a dovish Fed tone could weigh on the USD and relieve pressure on the lira.
