Signals for the Lira Against the US Dollar Today
Risk 0.50%.
Bullish Entry Points:
- Open a buy order at 38.05.
- Set a stop-loss order below 37.85.
- Move the stop-loss to the entry point and follow the profit with a price movement of 50 pips.
- Close half the contracts at a profit of 70 pips and leave the rest until the strong resistance levels at 40.50.
Bearish Entry Points:
- Place a sell order for 40.35.
- Set a stop-loss order at or above 41.50.
- Move the stop loss to the entry point and follow the profit with a price movement of 50 pips.
- Close half the contracts at a profit of 70 pips and leave the rest until the support levels at 37.15.
Turkish Lira Analysis:
The USD/TRY price rose slightly during the beginning of the week’s trading. The price traded around $38.17, approaching its highest level in about two weeks at $38.25. The country’s financial and monetary authorities continue to control the movements of the local currency, which is being supported by injecting billions of dollars into the markets (approximately $50 billion from its foreign reserves) to prevent larger declines. This is the policy that the central bank has followed since the start of the internal unrest due to the arrest of the Mayor of Istanbul more than six weeks ago.
In addition to direct interventions in the exchange market through intensive selling of foreign reserves, the Central Bank of Turkey approved several measures to counter the lira’s deterioration. These included a surprise increase in the main interest rate from 42.5% to 46%, with the bank justifying the rate hike by the need to strengthen the disinflation path and achieve permanent price stability, emphasizing that the tight monetary policy will remain in place until this goal is achieved. At the same time, it pointed to the increasing risks resulting from global protectionist policies and their impact on capital flows and economic activity.
Despite these steps, data revealed a significant decline in the central bank’s foreign currency assets, recording $147 billion, the lowest figure since June 2024, with a cumulative decrease estimated at around $26 billion compared to the peak recorded in mid-February. In just one-week, foreign currency reserves fell by $9.83 billion, while the value of gold reserves rose by $3.06 billion, leading to a net weekly decrease of $6.77 billion.
In parallel, net sales by foreign investors in the stock and bond markets amounted to about $3.1 billion in one week, while the total value of assets held by non-resident investors fell from $57 billion to $39 billion since mid-March, reflecting increasing concerns about political and economic stability in the country.
TRYUSD Technical Analysis and Expectations Today:
Technically, the USD/TRY pair has stabilized its limited movements within a narrow range. Recently, the price has approached the upper limit of the rectangle within which it is moving sideways. Also, the price continues to fluctuate around the 50-period moving average on the four-hour timeframe. Furthermore, the medium-term Turkish lira price forecast includes continued fluctuation amid the central bank’s control over the lira’s movements. Meanwhile, the longer-term lira forecast suggests a continued rise in the dollar, targeting resistance levels of $38.87, $40.00, and $41.01, respectively.
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