USD/TRY Forecast: Switching to Monetary Policy

Today’s recommendation on the lira against the dollar

The risk is 0.50%.

• Entering a buy order pending order from 23.00 levels
• Place a stop loss point to close below 22.80 levels.
• 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 strong resistance levels at 23.50.

• Entering a sell order pending order from 24.00 levels
• The best points for placing a stop loss close the highest levels of 24.15.
• 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 support levels 23.50

The Turkish lira stabilized against the US dollar for the second week in a row, after the lira recorded record levels of decline against the dollar. The stability of the lira comes as a kind of anticipation for the decisions of the Central Bank of Turkey, which are expected next Thursday, as most expectations refer to raising interest rates.

Estimates differ in this regard, as the rate of raising expected interest rates ranges between 20 percent to 25 percent during the meeting next Thursday. This is compared to the current rate of 8.5 percent. In the meantime, investors followed the statements of the new Turkish Finance Minister, Mehmet Simsek, who renewed his previous promises to return to traditional monetary policy gradually so that the markets would not be affected by any sudden decisions that might have a negative impact.

The statements of the Turkish Minister of Finance were made in a meeting with Turkish bankers as well as some investors, as Şimşek seeks to restore investors’ confidence in his country’s unstable economy, which suffers from high inflation, a decline in the volume of monetary reserves, and a decline in the value of the local currency, as the lira lost about 15% of its value in less than a month.

The Turkish minister also pledged not to approve any measure except after a thorough analysis of its expected effects on the markets.

• The dollar pair stabilized against the Turkish lira without major changes during early trading this morning, to stop the pair after a wave of strong rise that lasted for nearly a month.
• The dollar pair against the lira recorded new highs on a daily basis.
• Currently, the pair is trading around 23.67 levels since the middle of last week’s trading, as the price is trading above the support levels that are concentrated at 23.50 and 23.00, respectively.
• The price also settles below the resistance levels that are concentrated at 24.00 and 24.50.

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.

Until the announcement of the expected changes in monetary policy, caution may be the master of the situation, with the pair’s gains momentum declining, as it is expected to record stability until the next central bank meeting. Please adhere to the figures in the recommendation, while maintaining capital management.

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