Turkey Aims to Reduce Inflation

December 27, 2022 admin-dominor

On the technical front, the USD/TRY recorded new highs during yesterday’s trading, Monday, as the dollar rose, to record 18.83 liras.

Today’s recommendation on the TRY/USD

The risk is 0.50%.

Best buying entry points

Entering a buy order pending order from the 18.50 level.
Place a stop loss point to close below the 18.25 support 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 18.99.

Best-selling entry points

Entering a sell order pending order from the 18.99 level.
The best points to place a stop loss close to the highest level of 19.15.
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 18.55 support level.

The TRY/USD has stabilized, as the Turkish currency is heading to record an annual closure near its lowest levels ever against the US dollar. This happened after losing about 30 percent of its value during the current year, compared to a decline of 44 percent in 2021.

The stimulus policy pursued by the Turkish Central Bank contributed to increasing pressure on the Turkish lira, as the bank cut interest rates over four consecutive meetings before fixing interest rates during last Thursday’s meeting. Record Turkish interest rates declined from 14 percent to levels of 9 percent at the present time.

In the meantime, investors followed the statements of Turkish President Recep Tayyip Erdogan on Monday, which were issued after a meeting of the Turkish Cabinet. He said that the government is working to reduce the annual inflation rate to less than 30% by the end of next year. The goal is to reduce the inflation rate to single digits by 2024. Erdogan also said that the government’s plan aims to “develop Turkey through investment, employment, production, exports, and the current account surplus.” He stressed that the government would continue to work to overcome “losses resulting from high prices.” In November, the annual inflation rate in the country was 84.39%.

TRY/USD Technical Analysis

On the technical front, the USD/TRY recorded new highs during yesterday’s trading, Monday, as the dollar rose, to record 18.83 liras. Before retreating to the same limited trading range in which the pair has settled for a period of more than two months since mid-October.

Currently, the dollar pair against the lira is trading above the support levels of 18.53 and 18.40, respectively. On the other hand, the pair is trading below the resistance levels at 18.72 and 18.83, which represents the highest price for the pair recorded during 2022. The pair is also trading below the psychological resistance levels at 19.00. The USD/TRY trades above the moving averages 50, 100, and 200 on the daily time frame, in a sign of the general bullish trend of the pair, while the price trades between these averages on the four-hour time frame, as well as the lower time frames, in a sign of the divergence recorded by the pair in the medium term. Any drop in the pair represents an opportunity to buy back again. Please adhere to the numbers in the recommendation, while maintaining capital management.

USD/TRY