Turkish Central Bank’s Gold Sales Increase

Currently, the price is trading below other resistance areas concentrated between the levels of 27.24 and 27.50, and the pair is trading above the support levels that are concentrated at 26.50 and 26.00, respectively.

The risk is 0.50%.

• Entering a buy order pending order from the 26.50 level.
• 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 level 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 USD/TRY pair rose, recording new all-time highs, before returning and retreating within its normal movement average over the past two weeks. Investors followed reports of expectations that Turkish dollar-denominated bonds would turn negative due to the failure to tighten monetary policy in Turkey with the expected force. The pessimistic outlook comes despite these bonds recording the biggest gain among emerging market bonds over the past week. After the Turkish president’s visit to the UAE, which pledged to buy $8.5 billion worth of sukuk.

The Central Bank of Turkey raised interest rates by 900 basis points during the last two bank meetings, which is lower than previously estimated. The Turkish Central Bank had announced a number of measures aimed at tightening monetary policy and withdrawing liquidity from the markets, in addition to raising interest rates. Meanwhile, the report of the World Gold Council revealed that the Central Bank of Turkey recorded huge sales of gold. Which was estimated at about 132 tons of gold in the local market after restricting imports. The report attributed the increase in consumer demand for the precious metal since the beginning of this year, especially with inflation recording record levels in conjunction with the escalation of fears that preceded the Turkish elections. The World Gold Council report expected an increase in gold sales by the Central Bank of Turkey in order to provide liquidity to commercial banks.

On the technical front, the dollar pair rose against the Turkish lira, recording a new peak at the 27.24 level, before retreating during early trading this morning. The pair returned to trading within a limited range around the 27 level, which is the highest level ever recorded by the pair. The pair is currently trading within a limited trading range within a general bullish trend.

Currently, the price is trading below other resistance areas concentrated between the levels of 27.24 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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