Signals for the Lira Against the Dollar Today
- Risk 0.50%.
Best Buying Points:
- Open a buy order at 31.90.
- Set a stop loss at 31.75.
- Move the stop loss to the entry point and follow the profit with a price movement of 50 points.
- Close half the contracts at a profit of 70 points and leave the rest until the strong resistance levels at 32.25.
Best Selling Points:
- Place a sell order at 32.25.
- Set a stop loss at 32.35.
- Move the stop loss to the entry point and follow the profit with a price movement of 50 points.
- Close half the contracts at a profit of 70 points and leave the rest until the support levels at 32.10.
Turkish lira Analysis: USD/TRY pair maintained its gains during the beginning of the week, trading at its all-time high above the 32 lira per dollar level.
Closely, Investors followed Fitch Ratings' decision at the end of last week, which upgraded Turkey's credit rating from "B" to "B+" with a positive outlook. Obviously, this rating indicated confidence in the government's return to traditional economic policies as a key factor in mitigating financial stability risks and pressure on the balance of payments. Moreover, it reflects increased confidence in the effectiveness of policies implemented since mid-last year aimed at addressing overall economic and external weaknesses.
Meanwhile, the significant interest rate hikes by the central bank and additional tightening measures contributed to bolstering confidence in Turkey's economic future, especially after the interest rate was raised from 8.5% to 45% over eight meetings. Despite recent pressures on the lira, the Turkish central bank ceased supporting the currency, which had a positive impact on the size of foreign currency reserves. Recently, the total central bank foreign currency reserves increased to $80.5 billion at the beginning of this month compared to about $56.5 billion at the end of May.
Policymakers, including Finance Minister Mehmet Simsek, expect further credit rating upgrades, citing positive expectations driven by falling inflation, narrowing current account deficit and fiscal discipline in the second half of the year. Also, Moody's and Standard & Poor's credit rating agencies expressed optimism by raising their credit rating outlook for Turkey.
USD/TRY Technical Analysis and Expectations Today:
USD/TRY pair maintained its gains during early trading this morning, with the pair trading at its all-time high of 32 liras per dollar. Technically, there is an open opportunity for more gains to be recorded. Currently, the price is trading above an upward trend line on the daily time frame, as shown in the chart. Also, the price is moving above the 50 and 200 moving averages, which are positively crossing upwards, on most time frames from four hours to the weekly time frame, in a clear indication of the dominance of the overall upward trend on the pair. If the pair rises, it targets levels of 32.15 and 32.25, respectively, while if the price falls, it will target levels of 31.90 and 31.80, respectively.
Eventually, expectations for the Turkish lira exchange rate include the continuation of the pair's rise, targeting levels of 32.25 lira, and each dip represents an opportunity to reinforce buying contracts. Furthermore, we recommend adhering to the mentioned recommendations and maintaining capital management rules.
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