Today's recommendation on the TRY/USD
The risk is 0.50%.
Best buying entry points
- Entering a buy order pending order from the 25.50 level.
- Place a stop loss point to close below the 25.25 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 remaining contracts until the strong resistance level at 26.00.
Best-selling entry points
- Entering a sell order pending order from the 26.00 level.
- The best points to place a stop loss close to the highest level of 26.15.
- 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 25.50
The TRY/USD returned to record levels of decline against the US dollar during trading at the beginning of this week, to complete last week's declines after the Turkish Central Bank's decision, which was issued last Thursday. The lira had been relatively stable prior to the interest rate decision for about a week without changes, but the decision to raise interest, which came less than expectations, harmed the stability of the lira. The Monetary Policy Committee of the Central Bank of Turkey, during its meeting last Thursday under the chairmanship of Hafiza Ghaya Erkan, issued during its first meeting its decision to raise interest rates by 650 basis points, bringing the interest rate to levels of 15%, while expectations were that the interest rate would reach levels of 20 percent at least.
Pressure returned on the lira's price amid the measures of the Central Bank of Turkey, which eased the rules for local banks to hold the Turkish lira, as the bank reduced the proportion of mandatory purchases of additional Turkish government bonds denominated in lira from 10% to 5% immediately after the decision was issued. The statements of Turkish Finance Minister Mehmet Simsek also caused pressure on the currency, after he said that he preferred a complete liberalization of the currency price. For the lira to record the longest series of losses, which extended over sixteen months, the longest series since 1999. It is noteworthy that floating the currency may mean removing the hand of the Turkish Central Bank from supporting the price of the lira by pumping more foreign currencies into the markets, which drained the bank’s reserves significantly over the past years.
TRY/USD Technical Analysis
On the technical front, the price of the dollar rose against the Turkish lira during early trading this morning, as the pair is trading at its lowest levels ever, amid a continuous wave of strong rise that lasted for nearly a month, during which the dollar pair recorded new highs on a daily basis. Currently, the pair is trading around 25.80, which is higher than the support levels that are concentrated at 25.50 and 25.00, respectively. The price also settles below the resistance levels that are concentrated at 26.00 and 26.50.
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. The effect of the tightening by the Turkish Central Bank on the lira price, which is expected to record further declines, is expected to be delayed. Please adhere to the figures in the recommendation, while maintaining capital management.
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