Signals for the lira against the US dollar today
Bullish entry points:
- Open a purchase order at 35.20.
- Place a stop-loss order below 34.95.
- Move the stop-loss to the entry point and follow the profit with a price movement of 50 pips.
- Close half of the contract with a profit of 70 pips and leave the rest until the strong resistance level at 35.50.
Bearish entry points:
- Place a sell order for 35.50.
- Place a stop-loss order at or above 35.60.
- Move stop loss to entry point and follow profit with price movement of 50 pips.
- Close half of the contract with a profit of 70 pips and leave the rest until the support level at 35.29.
Turkish lira analysis:
The USD/TRY pair maintained its stability during this week’s trading, with trade limited to a limited range between 35.20 and 35.40 during this week’s trading.
Despite the lira’s decline last year, a report published by Bloomberg revealed a positive shift in the lira’s trajectory last year, supported by the tightening of monetary policy adopted by the Turkish central bank throughout the year. Recently, the Central Bank of Turkey adopted a strategy aimed at increasing the attractiveness of the Turkish Lira to investors by offering high yields. Obviously, this strategy is based on allowing the lira to depreciate against the dollar, but ensuring that the rate of depreciation is less than the rate of inflation. Furthermore, this approach aims to reduce the impact of currency weakness on rising prices.
Over the past year, the lira nominally depreciated by 16% against the dollar. However, when inflation is taken into account, the lira recorded a significant increase, the best since 2007. This policy provided a unique opportunity for foreign investors, as investing in Turkish lira bonds could yield returns of over 50%, making it one of the most attractive options in the financial markets.
At the same time the report pointed to an improvement in the value of the lira, Turkish President Recep Tayyip Erdogan confirmed that interest rates will begin to decline from 2025, indicating a belief that lowering interest rates will lead to a slowdown in inflation. The Turkish president explained that the economic team will certainly start lowering interest rates in 2025, and thus inflation will fall.
USD/TRY technical analysis and expectations today:
Technically, the USD/TRY pair maintained its stability during weekly trading within the same narrow trading range below the high recorded in late 2024 at 35.42 lira. Meanwhile, the Turkish lira price forecast points to continued dollar strength despite the current divergence. Also, the overall uptrend dominates the path of the pair through price stability above the uptrend line. As well as the price trading above the 50-period moving average on the four-hour time frame. Moreover, these are the same signals that exist on a longer time frame with the pair trading above the 50 and 200 day moving averages. If the pair breaks the recorded top, it will target the levels of 35.50 and 35.75 respectively.
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