The risk is 0.50%.
- Entering a buy order pending order from the 19.80 level.
- Place a stop loss point to close below the 19.39 level.
- Move the stop loss to the entry area and follow the profit when the price moves by 50 pips.
- Close half of the contracts with a profit equal to 70 pips and leave the remaining contracts until the strong resistance level at 25.00.
- Entering a sell order pending order from the 20.00 level.
- The best points for placing a stop loss close the highest level of 20.15.
- Move the stop loss to the entry area and follow the profit when the price moves by 50 pips.
- Close half of the contracts with a profit equal to 70 pips and leave the rest of the contracts until the support level at 19.75.
The TRY/USD stabilized against the dollar during early trading today, Wednesday, after the Turkish currency recorded its lowest levels ever against the dollar yesterday, after it touched levels of 20 liras per dollar, before recording some gains. According to options traders, the dollar may record levels of 29 liras by the end of the year, with the Turkish currency losing about a third of its value, after previous expectations that the dollar would record levels of 26 liras by the end of 2023.
At the same time, the cost of additional hedging from the risks of the lira’s decline against its rise rose to a record high. 19 percentage points. The lira’s declines come after the incumbent President Recep Tayyip Erdogan’s chances of preserving his position increased after he received the support of a former candidate who was eliminated from the first round of the elections.
The monetary policy of the Turkish president represents a major threat to the value of the lira, which suffers despite the measures of the Central Bank of Turkey, which seeks to support the local currency, but the decline in cash reserves has undermined its ability to do so. Reports indicate that the latest measures of the central bank that it sought to support the lira is a request to reduce local purchases of some local banks of foreign currency in the interbank market by about a quarter.
On the technical level, the dollar pair against the Turkish lira maintained its gains despite minor corrections, after the pair recorded a new peak yesterday, as it reached its new highest level ever, after the pair touched the 20 level. The US dollar maintained its gains against the lira, which accelerated with the growing pessimism about the lira. At the moment, the price broke the upper border of the ascending channel on the four-hour time frame, with the price closing above the upper border of the channel, and the price is trading inside a lower price channel on a lower frame. At the same time, the pair is trading above the support levels, which are concentrated at 19.80 and 19.70, respectively.
The price also settles below the resistance levels that are concentrated at 20.00 and 20.50. The price is moving above the moving averages 50, 100, and 200 on the daily timeframe, as well as on the 4-hour and 60-minute timeframes, in a sign of the strong bullish general trend. Because of the expected changes in monetary policy after the elections, any decline in the dollar against the lira represents an opportunity to buy back again. Please adhere to the figures in the recommendation, while maintaining capital management.
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