Central Bank Expects Inflation to Decline

Turkish inflation recorded an increase last August on an annual basis, rising to 61.4 percent compared to 58.9 percent recorded last July. 

Risk 0.50%.

• Entering a buy deal with a pending order from the 27.00 level.
• Place a stop loss closing point below the 26.75 level.
• Move the stop loss to the entry area and follow the profit as the price moves by 50 points.
• Close half of the contracts with a profit equal to 70 points and leave the rest of the contracts until the strong resistance level at 27.70.

• Entering a sell deal with a pending order from the 27.75 level.
• The best points to place a stop loss are closing the highest levels of 27.85.
• Move the stop loss to the entry area and follow the profit as the price moves by 50 points.
• Close half of the contracts with a profit equal to 70 points and leave the rest of the contracts until the support level of 26.90.

The price of the Turkish Lira varied against the US dollar during early trading on Wednesday morning, as the Turkish currency stabilized near its lowest levels ever against the dollar. Investors followed the statements of the Governor of the Turkish Central Bank, Hafiza Ghaya Arkan, who commented on the high inflation numbers, as she said that the impact of the restrictive monetary policy will appear during 2024 when inflation is expected to begin to decline. She also added that annual inflation will decrease after May of next year amid expectations that inflation will stabilize during 2025 before inflation declines to single digits during 2026.

In the same statements, the pillars of the rise in inflation were attributed to the rise in wages and the decline in the price of the lira. She also stressed that the bank has many tools that will enable it to achieve price stability. Finally, the Central Bank Governor concluded her statements by saying that the monetary tightening policy aims to enhance monetary transfer, as the bank succeeded in increasing the volume of deposits in Turkish lira in exchange for deposits protected from exchange rate fluctuations.

Turkish inflation recorded an increase last August on an annual basis, rising to 61.4 percent compared to 58.9 percent recorded last July. The rise in inflation comes despite the strong tightening followed by the Turkish Central Bank, which raised the interest rate successively over several months, bringing the main interest rate in Turkey to 30 percent after the last meeting of the Turkish Central Bank last September.

On the technical level, the dollar pair against the Turkish lira varied near its highest level ever, as the pair trades at the upper border of the ascending price channel on the 240-minute time frame shown in the chart.

Currently, if the pair goes up, it targets the resistance levels concentrated at 27.75 and 27.99, respectively, while if the pair declines, it targets the support levels concentrated at 27.30 and 26.99, respectively.

The price is moving above the 50 and 200 moving averages on the daily time frame, as well as on the four-hour and 60-minute time frames, indicating the buyers’ control and the return of the general upward trend recorded by the pair. The pair is expected to record gains as long as it settles within the ascending price channel range. Please adhere to the numbers in the recommendation, while maintaining capital management.

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