Today's recommendation on the TRY/USD
The risk is 0.50%.
Best buying entry points
- 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.
Best-selling entry points
- 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 settled near its highest levels ever during early trading on Wednesday morning. The lira recorded new declines yesterday, bringing its loss during the current year to about 30% of its value. Investors are awaiting the expected decision of the Central Bank of Turkey tomorrow, Thursday, as it is estimated to raise interest rates between 300 and 350 basis points, as the interest rate in the country is expected to reach 18%.
The central bank's decision to raise the interest rate during the past month came as a shock to expectations, although it raised interest rates by 650 basis points, it was a much lower rate than market expectations, which increased pressure on the price of the Turkish lira. At the same time, monetary policymakers in the country face a real dilemma as they seek to change the large monetary stimulus that the economy suffers from, which is represented in the widening of the difference between the interest that banks obtain on lending, which is less than what those same banks pay on deposits.
Where the average return on deposits in lira for three months is about 38%, compared to an interest rate of 15% that banks obtain on loans, reports indicate more measures that may be imposed by the new economic team, which was appointed by the Turkish president, with the aim of reducing inflation.
TRY/USD Technical Analysis
On the technical front, the dollar pair stabilized against the Turkish lira during early trading this morning, as the pair traded at its new highest levels ever. Currently, the pair breached the rectangle range that it settled inside for about two weeks, to return to trading within a general bullish trend. Currently, the pair is trading above the support levels, which are concentrated at 26.26 and 26.00, respectively.
The price also settles below the resistance levels that are concentrated at 27.12 and 27.50. 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. 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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