The USD/TRY is trading near the 29.16100 level as of this morning, the currency pair has been tracking upwards and its price velocity in the past handful of days has increased slightly. While the USD/TRY has certainly been performing in a less volatile manner since late June, this after the Turkish government began to hand over supervision of the Turkish Lira to new officials who allowed for a more realistic monetary policy, the currency pair has nevertheless continued to incrementally move higher.
On the 18th of July the USD/TRY was trading near the 27.00000 ratio, on the 18th of June the currency pair was around the vicinity of 23.55000. On the 11th of December – yes ten days ago - the USD/TRY started to test the 29.00000 level and although there have been reversals lower, the Forex pair saw a flurry of buying momentum yesterday which produced a brief spat of upwards momentum resulting in the highs being seen this morning.
Speculative Notions about the USD/TRY and Risk-Taking
Traders who can wager on the USD/TRY still face hurdles regarding wide spreads, potential transaction fees, and certainly the prospect of ‘carrying charges’ if the currency pair is held overnight. While the desire to bet on upside movement is a logical outlook by day traders, wagering on the USD/TRY can be rather challenging if a speculator doesn’t have deep pockets and the ability to hold onto a trade potentially for two or three days.
Trying to time a short-term position held for only a couple of hours in the USD/TRY could prove worthwhile, but it is very much a gamble because of the potential of reversals and dead periods when trading is light. Unprepared traders who are using too much leverage can be easily burned. Traders who want to pursue the USD/TRY and have the ability to withstand the potential of lingering within a trade overnight need to also remember the approaching holidays will begin to create thin conditions today and tomorrow in Forex.
Searching for Higher Ground in the USD/TRY
As the USD/TRY has begun to trade above the 29.00000 level and demonstrated the ability to sustain the higher value, some speculators may be thinking about the 30.00000 level as a target. However, the USD/TRY does not move like it did one year ago, the change of monetary policy in Turkey has led to a more stable Turkish Lira. Yes, the USD/TRY does tend to climb higher, but in rather polite incremental steps.
- As the holidays approach, speculators of the USD/TRY need to use entry price orders to protect themselves against surprising price fills.
- Take profit orders should be realistic, and not aim too high via USD/TRY wagers. Stop loss orders should be used by speculators using leverage.
- Holiday trading volumes will affect the USD/TRY in the near term and into next week.
Turkish Lira Short-Term Outlook:
Current Resistance: 29.16400
Current Support: 29.11000
High Target: 29.18500
Low Target: 29.05700
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