Turkish Central Bank Adjusts its Inflation

On the technical front, the dollar pair against the Turkish lira maintained its stability during the early trading this morning, recording slight changes.

The risk is 0.50%.

• Entering a buy order pending order from the 26.50 levels
• Place a stop loss point to close below the 26.25 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 rest of the contracts until the strong resistance levels at 27.50.

• Entering a sell order pending order from the 27.50 level.
• The best points to place a stop loss close to the highest level of 27.65.
• 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 26.50.

The TRY/USD maintained its stability during early trading this morning. Investors followed the Turkish Central Bank’s updates on inflation expectations in the country, as the bank’s analysts raised inflation expectations in Turkey during the remaining months of the current year from to 58% compared to the 22.3% in the bank’s previous expectations.

At the same time, the bank revised its inflation expectations for the next year, as it is expected to reach 33%, compared to the previous forecast, which was at 8.8%. The new inflation expectations, which are disappointing, come despite the efforts made by the Central Bank of Turkey at the present time to tighten monetary policy, according to which interest rates have been increased over two consecutive meetings, in conjunction with the adoption of some measures aimed at placing restrictions on lending and withdrawing large liquidity from the Turkish lira in banks.

In this regard, investors followed the statements of the Governor of the Central Bank of Turkey, Hafiza Ghaya Arkan, which was issued this morning, Thursday, in which she said that the central bank began a period of monetary tightening with the aim of controlling and reducing inflation, as we will work to gradually strengthen this policy whenever the need arises. Arkan also added that the central bank will use all available tools to work on price stability, while continuing to approve selective measures regarding loans. Finally, the governor of the central bank commented on inflation expectations, saying that inflation will show a rise, which she described as temporary in the short term.

On the technical front, the dollar pair against the Turkish lira maintained its stability during the early trading this morning, recording slight changes. The pair is trading around the 27 levels, near its all-time high, which it reached during the previous week’s trading. The pair is currently trading within a limited trading range within a general bullish trend, the price is trading below other resistance areas concentrated between the levels of 27.12 and 27.50, and the pair is trading above the support levels that are concentrated at 26.50 and 26.00, respectively.

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. It is expected that the impact of the tightening by the Turkish Central Bank on the price of the lira, which analysts estimated to be around 29 liras per dollar, is expected to be delayed. Please adhere to the figures in the recommendation, while maintaining capital management.

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