Forex Trading

USD/TRY Forecast Today 16/5: Lira Holds Steady (Chart)

Signals for the Lira Against the Dollar Today

USD/TRY Forecast Today 16/5: Lira Holds Steady -graph

Bullish Entry Points:

  • Open a buy order at 32.15.
  • Set a stop-loss order below 31.05.
  • 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 32.50.

Bearish Entry Points:

  • Place a sell order at 32.47.
  • Set a stop-loss order at or above 32.60.
  • 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 31.95.

Turkish lira Analysis:

The USD/TRY pair maintained its stability within a limited trading range during the current week’s trading sessions. Despite mixed data with both negative and positive results, the lira seems to be constrained within certain movement boundaries, supported by positive expectations for the Turkish economy and a tight monetary policy, possibly with indirect intervention from the Turkish central bank.

Meanwhile, investors followed reports revealing an increase in mysterious capital outflows from Turkey to abroad, coinciding with the recent elections, reminiscent of similar trends observed before last year’s presidential elections. This outflow, amounting to approximately $10 billion in March, led to a decrease in Turkish central bank reserves and a significant current account deficit, surpassing expectations. So far, the fear of currency devaluation post-elections was cited as the main reason behind this capital flight, despite efforts towards conventional economic policies and stabilizing the lira.

Previously, Turkey had announced measures to cut public spending, aiming to curb inflation and reduce the budget deficit. However, doubts surround the effectiveness of these measures, including cuts in public sector employment and infrastructure investments, with scepticism about their impact on inflation rates. Market analysts emphasize the need for more substantial long-term savings and express concerns about the feasibility and effectiveness of the announced measures. Also, the spending cuts announcement is seen as an initial step towards financial rationalization, although significant savings are still anticipated in the future. Moreover, despite efforts to address economic issues, challenges such as high inflation rates and resilient domestic demand persist, complicating the effectiveness of policy interventions.

USD/TRY Technical Analysis and Expectations Today:

The USD/TRY pair maintained its limited movements, stabilizing within a descending triangle pattern on the four-hour time frame, as shown in the chart.

In case of a rise, the pair is expected to head towards resistance levels concentrated at 32.38 and 32.50, respectively. On the other hand, the price is trading above support levels at 32.06 and 31.70, respectively. Currently, the price is moving above the 50 and 200 moving averages on the daily time frame. Technically, it hovers around these same averages on the four-hour time frame, indicating the pair’s medium-term divergence. The Turkish lira price forecasts suggest the pair will remain variable as long as it stays within the range of the outlined triangle pattern.

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