USD/TRY: Turkish Lira sidelined after biggest weekly gain since at least 2008

• Lira trades near 7.64 per US dollar versus 8.36 a week ago. 
• Analysts see continued gains in the battered currency. 

The Turkish lira (TRY) is taking a breather on Monday, having risen by nearly 10% against the US dollar last week. That's the biggest single-week percentage gain in at least 12 years, according to data source TradingView. 

The currency pair surged last week as President Erdogan appointed a new economic team and pledged a strategy built on price, monetary and financial stability. 

Looking ahead,  a nudge in policy to orthodoxy, including rate hikes, has the potential to take TRY below 7.50 per US dollar, according to Robin Brooks, Chief Economist at the Institute of International Finance (IIF). Further, as stated by Morgan Stanley analysts, the global recovery looks sustainable, synchronous, and supported by policy, and is likely to keep the dollar on the defensive. 

That said if the second wave of the coronavirus continues to accelerate across the advanced world, the risk sentiment will likely weaken, putting a temporary bid under the US dollar. The TRY is currently trading largely unchanged on the day near 7.64 per US dollar. Despite the last week's rally, the currency is still down 28% this year. 

Technical levels

Resistance: 7.7787 (Oct. 22 low), 7.8563 (50-day SMA). 

Support: 7.60 (Friday's low), 7.4731 (100-day SMA).