USD/TRY trims some losses, returns below 6.00

• The Turkish Lira clinched fresh all-time tops near 6.50%.
• TRY remains under heavy pressure as US-Turkey talks continue.
• Value of Lira put options at 7-year tops.

Another day, another drop in the Turkish Lira. This time USD/TRY climbed to fresh all-time highs in the 6.50 area, although losing some traction afterwards.

USD/TRY weaker on US-Turkey political tensions

Spot gathered further upside traction following another wave of selling pressure hitting the Turkish Lira.

In fact, political tensions between the US and Turkey have been on the rise as of late amidst the unresolved situation around US pastor Brunson and recently US sanctions on two Turkish officials.

Investors remain bearish on the Lira as they continue to factor in the probability of extra sanctions against the country, which could precipitate further pullbacks in the Turkish currency.

Additionally, bearish bets on TRY measured by the value of put options climbed to fresh 7-year highs.

USD/TRY key levels

At the moment the pair is gaining 5.64% at 5.8635 facing the next hurdle at 6.4684 (all time high Aug.10) and then 7.0000 (psychological level). On the downside, a breach of 5.2202 (10-day sma) would open the door to 5.0105 (21-day sma) and finally 4.7305 (low Jul.23).