USD/TRY Forecast: Awaiting Central Bank's Rate Decision

Signals for the Lira Against the Dollar Today

• Risk 0.50%.

Best Buying Points:

• Open a buy order at 32.30.
• Set a stop loss at 32.05.
• 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 32.75.

Best Selling Points:

• Place a sell order at 32.75.
• Set a stop loss is above 32.85.
• 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 32.60.

Turkish lira Analysis: The USD/TRY stabilized during trading today, Thursday, with the pair stabilizing near its new all-time high of 32.50 lira per dollar. This comes ahead of the Turkish Central Bank's meeting today to announce the interest rate decision. Most economists expect the central bank to keep the main interest rate unchanged. However, some global banks expect a hike soon, which could reach 500 basis points, in order to boost investor confidence and signal a commitment to price stability.

Meanwhile, some reports have estimated that the bank will return to raising the interest rate again, especially after the sharp decline in the value of the Turkish lira, after the Turkish currency lost about 3.6% of its value against the dollar during trading this month. The measures of the Turkish Central Bank and the tightening policy it has followed over the past months have not had a serious impact on the value of the lira or inflation rates. Thus, the decline of the lira comes in conjunction with the expansion of demand for foreign currencies, with the approach of the local elections scheduled for the end of this month. Therefore, the interest rate may be fixed during the current meeting before resuming raising it starting from the meeting next month.

Moreover, Policy statements by monetary and fiscal policymakers in Turkey have previously hinted at the end of the tightening cycle, especially regarding interest rate hikes, after a series of rate hikes over eight meetings increased interest rates from 8.5% to 45%. Furthermore, this included some other measures such as selling forward contracts and imposing restrictions on loan growth to support the exchange rate.

USD/TRY Technical Analysis and Expectations Today:

USD/TRY- The pair stabilized during early trading this morning, trading near its record highs at 32.50 lira per dollar. Currently, the price was unable to break through the upper limit of the upward price channel on the daily timeframe, as shown in the chart attached. At the same time, the price is trading above the 50 and 200 moving averages, which are intersecting positively, on most timeframes from four hours to weekly, indicating a clear dominance of the overall upward trend on the pair. In the event of the pair's rise, it will target levels of 32.60 and 32.75 respectively, while in the event of declining, USD/TRY will target levels of 32.25 and 32.10 respectively.

Ultimately, Turkish lira price forecasts include continued upward movement of the pair, targeting 32.75 lira levels, as each dip represents an opportunity to reinforce buying contracts. Finally, we recommend adhering to the mentioned recommendations and maintaining capital management rules.