Signals for the Lira Against the Dollar Today
- Risk 0.50%.
Bullish Entry Points:
- Open a buy order at 32.15.
- Set a stop-loss order below 31.05.
- 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.
Bearish Entry Points:
- Place a sell order at 32.47.
- Set a stop-loss order at or above 32.60.
- 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 31.95.
Turkish lira Analysis:
Trading in the USD/TRY remained stable during the beginning of the week, as decisions from the Turkish Central Bank and the government continued to support the stability of the lira against the dollar, which has been ongoing for about a month.
Meanwhile, the measures announced by the Turkish government include a savings package aimed at reducing public spending and combating high inflation, with the goal of enhancing economic stability. The government plans to implement austerity measures, including reviewing spending and reducing investments in certain sectors, amid concerns about rising inflation, which some estimates suggest could peak at 75%. Furthermore, the Central Bank expects the inflation rate to reach 38% by the end of the year. At the same time, the government aims to address the growing budget deficit, exacerbated by pre-election spending and natural disasters. Investors and economists are calling for financial measures that align with monetary policy to alleviate inflationary pressures.
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Previously, The Turkish Central Bank had repealed the regulation requiring banks to purchase government securities if deposit targets in local currency were not met, a move aimed at enhancing market efficiency. Obviously, this decision marks a departure from unconventional economic policies, including maintaining low interest rates under President Erdogan's pressure. Under new leadership, the bank is gradually reversing these policies, following significant interest rate hikes to combat inflation, indicating a shift towards a more traditional monetary approach. Since the elections held a year ago, monetary policy has changed significantly, with benchmark interest rates rising by over 40 percentage points to 50%.
TRYUSD Technical Analysis and Expectations Today:
The USD/TRY pair maintained its divergence within a limited range, trading within a downward trend channel on the four-hour timeframe, as shown in the chart. Price declines were supported to a limited extent throughout this month's trading.
The Turkish lira continues its limited gains this month, with the pair trading below resistance levels centred at 32.38 and 32.50, respectively. Technically, the nearest support levels are at 32.06 and 31.70, respectively. Now, the price is moving above the 50 and 200 moving averages on the daily timeframe, while moving around these averages on the four-hour timeframe, indicating the divergence recorded by the pair in the medium term. Ultimately, Turkish Lira price forecasts include a decline in the pair, if it remains within the price channel shown.
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