Signals for the Lira Against the Dollar Today
- Risk 0.50%.
Best Buying Points:
- Open a buy order at 31.50.
- Set a stop-loss order below 31.15.
- Move the stop-loss to the entry point and follow the profit with a price movement of 50 pips.
- Close half the contracts at a profit of 70 pips and leave the rest until the strong resistance levels at 32.50.
Best Selling Points:
- Place a sell order at 32.45.
- Set a stop-loss order at or above 32.65.
- Move the stop loss to the entry point and follow the profit with a price movement of 50 pips.
- Close half the contracts at a profit of 70 pips and leave the rest until the support levels at 31.50.
Turkish lira Analysis:
USD/TRY pair fell in early trading on Wednesday, despite the negative inflation data released earlier in the day. The Turkish government and central bank appear to be working to prevent the pair from breaking the 32.50 lira/$ level, below which it has settled for the second week in a row.
Meanwhile, the investors followed the statements of Turkish Finance and Treasury Minister Mehmet Şimşek, who commented on the inflation data released on Wednesday, which showed a lower-than-expected decline in March, to 68.5%, compared to 67.07% in February, while expectations were for inflation to rise to 69.1%. The Turkish minister said that inflation had fallen as expected, and attributed this to the tightening of monetary policy, which had been the biggest contributor to balancing supply and demand. Also, Şimşek expected stability to be further enhanced with increased external financing opportunities. Eventually, the Turkish minister added that tightening fiscal policy while controlling spending would help curb inflation.
Furthermore, Wells Fargo Investment Group issued a research note predicting that the dollar/lira pair has reached its peak, with US bank experts expecting a shift in favor of the Turkish lira supported by the central bank's tightening monetary policy. According to the bank's forecast, the dollar is expected to fall below 30 lira level by the middle of next year.
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USD/TRY Technical Analysis and Expectations Today:
The pair declined during early trading on Thursday, slightly continuing the red trend since the beginning of the week. The price directed to break below the lower limit of the upward price channel on the daily timeframe, as shown by the chart. At the same time, the pair is trading at levels of 31.90 lira per dollar, which is higher than the 50 and 200 moving averages intersecting positively, on the daily timeframe. Obviously, this indicates the dominance of the overall upward trend on the pair, while the price moves between these averages on the four-hour timeframe, indicating stability in the medium term.
Technically, the nearest resistance levels the pair may target are at levels of 32.10 and 32.25, respectively, while in case of price decline, it targets levels of 31.75 and 31.50, respectively. Eventually, the forecasts for the Turkish Lira include the continuation of the pair's rise targeting levels of 32.50 lira, as each dip represents an opportunity to reinforce buying contracts. Finally, we recommend adhering to the mentioned recommendations and maintaining capital management rules.
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