Signals for TRY/USD Today
- Risk 0.50%.
Bullish Entry Points:
- Open a buy order at 32.95.
- Set a stop-loss order below 32.75.
- 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 32.29.
Bearish Entry Points:
- Place a sell order for 33.25.
- Set a stop-loss order at or above 33.34.
- 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 32.99.
The Turkish lira's performance against the dollar has declined at the start of this week, continuing its losses from the end of last week, breaking the psychological resistance level of 33 lira per dollar.
At the beginning of this week, investors monitored statements by Fatih Karahan, the Governor of the Central Bank of Turkey, emphasizing the need to achieve inflation targets before considering interest rate cuts. Also, Karahan mentioned that interest rate adjustments are necessary to meet the inflation targets for 2025 and beyond. Despite the recent drop in inflation, speculation about interest rate cuts persists, with Goldman Sachs predicting a cut this quarter.
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Karahan maintained a cautious stance on the timing of rate cuts, highlighting the disparity between inflation expectations for households and businesses versus the central bank's forecasts. The bank aims to reduce inflation to 38% by the end of the year, 14% by 2025, and 9% by 2026. Achieving this year's target is crucial for credibility.
Meanwhile, the central bank expects that the increase in electricity and targeted prices in July will raise monthly inflation by 1.5 percentage points. Moreover, Karahan noted that restrictive policies are necessary to balance demand and the current account. Furthermore, the new economic team seeks to curb inflation through prevailing policies, contrasting with previous high-consumption strategies. Karahan attributed the stability of the Turkish lira to higher interest rates, despite global banks' concerns about competitiveness. Likewise, He emphasized the importance of reducing domestic demand and linking inflation expectations to improve the current account deficit. Also, the central bank aims to boost reserves while managing liquidity challenges and capital flows.
TRYUSD technical Analysis and Expectations Today:
The exchange rate of the US dollar against the Turkish lira (USD/TRY) rose during morning trading, breaking through the peak recorded at the end of last month. The pair maintained its movement above the upward trend line on the four-hour time frame, as shown in the chart. Also, the pair continued trading above the 50 and 200 moving averages on the daily and four-hour time frames, indicating the general uptrend's dominance. If the pair rises, it may target levels of 33.25 and 33.50. Conversely, if the price drops, it may target support levels at 32.90 and 32.70. Finally, the forecast for the Turkish lira price includes a rise as long as it remains above the upward trend line.
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