Signals for the Lira Against the US Dollar Today
Risk 0.50%.
Bullish Entry Points:
- Open a buy order at 35.20.
- Set a stop-loss order below 34.95.
- 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 35.50.
Bearish Entry Points:
- Place a sell order for 35.50.
- Set a stop-loss order at or above 35.60.
- 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 35.29.
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Turkish lira Analysis:
The USD/TRY pair has risen at the beginning of the new year, as the price continued its series of limited daily increases, supporting the pair in setting new record levels continuously. This week, the price reached a new peak at 35.42 lira, amid expectations of continued rise in the pair in light of the current shift in monetary policy. The Central Bank of Turkey approved the first interest rate cut in December by 250 basis points. This cut is considered a shift in the monetary policy that has been tightened for more than a year and a half, by raising the interest rate starting from mid-2023 to levels of 50% before stabilizing for several months until last December.
Data-wise, the Turkish Statistical Institute announced a 3.1% decrease in exports in November compared to the same month last year, with exports reaching $18.29 billion. On the other hand, imports decreased by 27.1% to reach $22.7 billion, resulting in a trade deficit of $4.41 billion, down 49% compared to November 2022. Meanwhile, the export coverage ratio of imports reached 79.4%, compared to 74.9% in the previous month.
In other news, Turkey announced a 6% increase in fuel tax, effective from Tuesday, according to the Minister of Finance at the beginning of the week. This tax increase comes as part of a series of measures to boost revenues and reduce the budget deficit. Also, the Minister of Finance explained that this step aims to improve the state budget and meet current economic challenges. Experts expect the increase to have a limited impact on the level of fuel consumption, but it may lead to a slight increase in the prices of goods and services related to transportation. They also indicated that these measures may help control inflation, with expectations of greater stability in the Turkish economy in 2025.
TRYUSD Technical Analysis and Expectations Today:
Technically, the USD/TRY pair maintained its limited upward momentum, recording new record levels at 35.42 lira during the current week. Moreover, the pair is stabilizing above the ascending trendline. The pair also receives support from moving above the 50-period moving average on the 4-hour timeframe. On the larger timeframe, the pair stabilized above another ascending trendline. As well as with the price moving above the 50 and 200-day moving averages. Finally, the forecast for the Turkish lira price tends to continue the rise of the dollar against the lira as the pair targets levels of 35.50 and 35.75, respectively.
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