Signals for the Lira Against the Dollar Today
- Risk 0.50%.
Bullish Entry Points:
- Open a buy order at 32.05.
- Set a stop-loss order below 31.95.
- 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 for 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:
The USD/TRY pair has maintained stability throughout this month's trading. The lira has seen narrow movements throughout May, leading some analysts to expect the Central Bank of Turkey to control the exchange rate of the local currency in a maneuver akin to orbit control.
Overall, the economic outlook for Turkey has stabilized following the local elections held last March, with the central bank strengthening its reserves and largely stabilizing the lira's value. Despite a slowdown in lira credit and dollar deposits, foreign currency loans are on the rise. Furthermore, economists point out that the central bank may impose new controls to limit foreign currency loans and spending if inflation persists. Monetary policy may be tightened further, with a focus on liquidity adjustments such as raising reserve ratios. Challenges remain with strong consumer spending and services inflation, but officials hope that tighter policy will ease demand later in the year.
In this regard, statements by the Turkish Minister of Finance and Treasury have been issued throughout this week. Mehmet Şimşek stated that "the Central Bank of Turkey is close to reaching a positive reserve point, excluding swaps." He added, "We are very close and reserve decline concerns are largely off the government's agenda." At the same time, the Minister of Finance expects the inflation transition period to end as of this month, stating that "his country is about to see the end of inflation." Also, he expects the current account deficit to fall below 2.5%.
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USD/TRY technical Analysis and Expectations Today:
Technically, the USD/TRY pair has maintained stability throughout this week's trading with no significant changes. Decisively, with the price moving within a descending triangle pattern as shown in the chart on the 4-hour timeframe. Recently, the pair is hovering near the 50-day and 200-day moving averages on the 4-hour timeframe, indicating medium-term divergence. While on the larger timeframe, the upward trend dominates the pair, with the price trading above these same averages. If the price rises, it targets resistance levels at 32.40 and 32.50, respectively. If the price falls, it targets support levels at 32.06 and 31.70, respectively. Ultimately, Turkish lira price expectations include pair divergence as long as it remains stable within the triangle pattern shown.
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