Today’s recommendation on the lira against the dollar

Risk 0.50%.

None of yesterday’s buy or sell transactions were activated

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Turkish lira analysis

According to Vid data, Turkey’s total revenues in July were about 196.98 billion Turkish liras, while expenditures were about 260.999 billion liras, bringing the total deficit in July to 64 billion liras. During 2022, the revenues of the general budget in the country were recorded at about 1.642 trillion pounds, compared to the expenditures of 1.432 trillion pounds, as the general budget surplus recorded about 29.5 billion pounds. The lira was not significantly affected, as it quietly traded near its lowest levels during 2022. It is an image that reflects the extent of the Turkish Central Bank’s control over setting a ceiling for the lira price.

Technical Outlook for Turkish Lira

The USD/TRY currency pair settled within the same narrow trading range shown on the chart. The pair traded the highest support levels, which are concentrated at 17.85 and 17.75 levels, respectively. The lira is trading below the resistance levels at 18.00 and 18.07, respectively. The pair is also trading above the 50, 100 and 200 moving averages, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. The chance of the lira rising against the dollar is still slim as the pair is heading in an overall bullish trend. As each decline of the pair represents a good buying opportunity, please adhere to the numbers in the recommendation, with the need to maintain capital management.

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The pair will likely see heightened volatility after the CPI data. 

Bullish View

• Buy the EUR/USD pair and set a take-profit at 1.0300.
• Add a stop-loss at 1.0165.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.0165 and a take-profit at 1.0050.
• Add a stop-loss at 1.0250.

The EUR/USD price continued consolidating while US bond yields retreated ahead of the latest American and German inflation data. It was trading at 1.0212 on Wednesday morning, which was lower than this month’s high of 1.0277.

US and German Inflation Data

The EUR/USD remained in a tight range as focus shifted to American and European inflation. Economists expect that German’s consumer price index rose from 0.1% in June to 0.9% in July. This will to a year-on-year increase of 8.5%, which will be the highest point in decades.

Meanwhile, in Italy, analysts expect that the country’s inflation dropped from 8.0% in June to 7.9% in July. This decline is attributed to some government subsidies that it implement recently.

These numbers will come a few days after the European Central Bank (ECB) decided to deliver its first interest rate hike since 2011. It hiked by 0.50% in a bid to fight the soaring consumer and producer inflation in the region.

The European bond market has managed to stabilize after the rate hike. For example, the closely watched spread of German and Spain bond yields has thinned to 2.1%. This situation is mostly because the bank has continued buying bonds from vulnerable economies like Italy and Greece.

The most important catalyst for the EUR/USD will be the latest inflation data from the United States. Economists surveyed by Reuters expect that the headline consumer price index (CPI) dropped from 9.1% to 8.7%. Core CPI, which excludes the volatile food and energy prices, is expected to have increased from 5.9% to 6.1%.

A positive inflation surprise will increase the possibility of the Fed hiking rates by 0.75% in September since the labor market is extremely tight. Such a figure will be bearish for the EUR/USD pair.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair has been moving sideways in the past few days. It has remained between the resistance at 1.0276 and support at 1.0131. The pair is consolidating at the 25-day and 50-day moving averages while the MACD is along the neutral point. It is also between the 23.6% and 38.2% Fibonacci Retracement levels.

Therefore, the pair will likely see heightened volatility after the CPI data. In case of a strong inflation data, the pair will likely retest the support at 1.0130. On the other hand, if the CPI data disappoints, the pair will likely rise to the 50% retracement point at 1.0366.

 

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The pair will likely resume the bearish trend as sellers target the important support at 0.6850.

Bearish View

• Set a sell-stop at 0.6920 and a take-profit at 0.6850.
• Add a stop-loss at 0.7020.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.6970 and a take-profit at 0.7060.
• Add a stop-loss at 0.6850.

The AUD/USD price remains significantly below its highest this week as investors reflected on the latest Reserve Bank of Australia (RBA) decision. The pair dropped to 0.6945, which was about 1.40% above the lowest level this week.

US Jobs Data Ahead

The AUD/USD pair retreated after the RBA delivered its August interest rate decision. The bank decided to hike interest rates by 0.50%, meaning that it has increased rates four times this year. This is the most hawkish that the bank has been in decades.

The pair declined as investors worried about the pace of future interest rates since there are signs that inflation is peaking. For example, the price of crude oil has dropped from a year-to-date high of over $135 to less than $100.

Some analysts believe that oil prices will continue falling as OPEC+ hikes production. This is notable since oil is the biggest part of inflation in Australia and other countries. Moreso, the RBA warned that the country’s economy will continue slowing down in the coming months. The RBA will publish its minutes on Friday.

The next key catalyst for the AUD/USD price will be the upcoming US jobs data and statements by Fed officials. This week, officials like Charles Evans of Chicago and Lorretta Meister said that the Fed would continue hiking interest rates even as strains to the American economy remain.

For example, there are signs that the housing sector is slowing after data showed that new and existing home prices dropped sharply in June.

The US will publish the official jobs data on Friday. Economists expect these numbers to show that the country’s economy added fewer jobs in July than in the previous month while the unemployment rate remained unchanged at 3.7%.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair made a strong bearish breakout on Tuesday after the latest RBA decision. The pair managed to move below the lower line of the ascending channel. It also moved slightly below the 25-day and 50-day moving average. The Relative Strength Index (RSI) has moved to the neutral point.

Therefore, the pair will likely resume the bearish trend as sellers target the important support at 0.6850. This is both an important psychological level as well as the lowest point on June 14th.

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The outlook of the GBP/USD is a bit bulish following the breakout 

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.2300.
• Add a stop-loss at 1.2050.
• Timeline: 1 day.

Bearish view

• Set a sell-stop at 1.2050 and a take-profit at 1.2000.
• Add a stop-loss at 1.2150.

The GBP/USD pair rose to the highest level since July 4th after the latest interest rate decision by the Federal Reserve. It jumped to a high of 1.2125, which is about 3% above the lowest level this month. As it rose, it moved above the important resistance level at 1.2085.

Federal Reserve decision

The GBP/USD pair rose sharply even after the Federal Reserve delivered the latest interest rate decision. In a statement, the bank announced that it was raising interest rates by 0.75% for the second straight month.

The bank has now hiked interest rates by 225 basis points as it tackles the rising inflation in the country. In addition to rate hikes, the bank has ended its quantitative easing policy and embarked on a tightening one. As a result, it has reduced its total balance sheet from over $8.965 trillion to the current $8.89 trillion.

The Fed hopes that these measures will help to lower inflation by reducing the overall consumer spending. It hopes to do this without causing a recession.

Data published this month showed that America’s inflation surged to 9.1% in June, the biggest increase in over 40 years. Still, there are early signs that inflation may have peaked unless something dramatic happens. For example, recent data shows that gasoline prices have moved from this year’s high of $5 to $4.33.

Energy is the biggest contributor to the ongoing inflation surge. At the same time, the prices of key commodities like copper, iron ore, and crude oil has declined sharply in the past few months.

The GBP/USD pair will react to the latest US GDP numbers that will come out later today. Economists expect that the country’s economy expanded by 0.5% in the second quarter. If analysts are accurate, it means that the economy has avoided a technical recession.

GBP/USD forecast

The GBP/USD pair has been forming two important bullish patterns. It formed an inverted head and shoulders pattern and an ascending triangle. The pair then managed to move above the important level at 1.2084, where it has struggled in the past few days. The Relative Strength Index (RSI) moved slightly above the overbought level of 70.

Therefore, the outlook of the GBP/USD is a bit bulish following the breakout that happened on Wednesday. The next key level to watch will be at 1.2300.

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We expect the pair to rise from the levels specified in the recommendation. 

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The buy trade of the recommendation was activated on Thursday, and a profit was made with closing half of the contracts with the introduction of the stop loss

Best selling entry points

• Entering a short position with a pending order from levels 17.45
• Set a stop loss point to close the lowest support levels 17.65.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 16.40.

Best entry points buy

• Entering a long position with a pending order from 16.81 levels
• The best points for setting the stop loss are closing the highest levels of 16.44.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 17.11

The Turkish lira fell during the early trading today, as the markets absorbed the impact of the data released yesterday, which showed the rise in inflation in the country to record levels approaching 80 percent. The CPI rose 78.6% during June compared to the same month last year, as rising energy imports and the cost of food and drink led the index’s rise. The bad economic data appears to be able to swallow any limited gains for the lira after any action by the Turkish government and the country’s central bank. Despite last week’s gains, the lira lost most of those gains, with bad data coming in. Analysts attributed the main flaw in the policy of the Turkish Central Bank, which insists on following a stimulus policy unlike most central banks around the world, which is reflected in the lira, which is struggling for stability despite the indirect and direct interventions of the Turkish Central in the market.

On the technical front, the Turkish lira fell against the US dollar, the pair exited to trade from a narrow range, which is shown in the ascending channel on the four-hour time frame shown on the provided chart, as it broke the upper boundary of the channel. At the same time, the pair settled above the support levels that are concentrated at 16.70 and 16.48 levels, respectively. At the same time, the lira is trading below the resistance levels at 17.11 and 17.40, respectively. The pair traded above the moving averages 50, 100, and 200, respectively, on the four-hour time frame, as well as on the 60-minute time frame, indicating the bullish trend over the medium term. At the same time, the pair is trading the highest strong resistance levels represented in the 50 Fibonacci levels on the descending wave that started from 06-24-2022 until the top recorded on 06-27-2022. We expect the pair to rise from the levels specified in the recommendation. Please adhere to the numbers in the recommendation with the need to maintain capital management.

The outlook for the pair is bearish ahead of the upcoming UK inflation data and Fed chair testimony. 

Bearish View

• Sell the GBP/USD pair and set a take-profit at 1.2150.
• Add a stop-loss at 1.2350.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.2295 and a take-profit at 1.2350.
• Add a stop-loss at 1.2200.

The GBP/USD price continued to consolidate as investors waited for the upcoming UK consumer and producer inflation data. The pair also reacted mildly to the ongoing strike by rail workers. It was trading at 1.2271 on Wednesday morning.

UK Inflation Data Ahead

The UK economy is going through numerous challenges. The most important one is that the country’s consumer and producer inflation is soaring as the crisis in Ukraine continues. It is estimated that this inflation will push the average food bill by £380 this year.

The Office of National Statistics (ONS) will publish the latest UK CPI and PPI data on Wednesday morning.

Economists polled by Reuters expect the data will show that inflation is still surging. The median estimate is that inflation rose from 9.0% in April to 9.1% in May. If analysts are accurate, it will be the highest increase in decades.

On the positive side, analysts expect that the headline and core inflation eased slightly on a month-on-month basis. In its meeting last week, the Bank of England warned that inflation will rise to over 10% in the coming months.

Meanwhile, UK producers are expected to see elevated costs. The PPI input and output are expected to have risen by 19.4% and 14.7%, respectively.

These numbers will come at a time when the transport sector in the UK is going through turmoil. Over 40,000 rail workers went in the biggest strike in over 30 years. The three-day strike is expected to have some impact on the country’s inflation.

The GBP/USD pair will react to the upcoming testimony by Jerome Powell. The Fed Chair will be quizzed by Senators on the state of the economy and actions that the bank is doing. It will be his first grilling since the Fed decided to hike rates by 0.75%.

GBP/USD Forecast

The GBP/USD pair continued to consolidate ahead of the upcoming UK consumer inflation data. It is trading at 1.2270, where it has been in the past two straight days. The pair remains slightly above the standard pivot point and is also consolidating along the 25-day and 50-day moving averages.

It has also formed a small rising wedge pattern. Therefore, the outlook for the pair is bearish ahead of the upcoming UK inflation data and Fed chair testimony. The key support to watch will be at 1.2150.

GBP/USD remaining in a tight range.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.2670.
• Add a stop-loss at 1.2520.
• Timeline: 1-2 days.

Bearish view

• Set a sell-stop at 1.2535 and a take-profit at 1.2490.
• Add a stop-loss at 1.2600.

The GBP/USD pair remained in a consolidation phase as investors reacted to the political situation in the UK. Sterling is trading at 1.2587, which was higher than this week’s low of 1.2437. It is about 3.50% above the lowest level in May.

Sterling continues its consolidation

The GBP/USD pair remained in a tight range on Tuesday as the UK parliament failed to impeach Boris Johnson. Tory members lacked the required 180 votes needed to impeach him.

This means that he will not face another impeachment in the next 12 months. In a statement, Johnson vowed to continue serving as the prime minister and implementing his plans. The pair showed no major movements because the vote was in line with what analysts were expecting.

The pair will likely remain in this range on Wednesday because there is no major scheduled economic event. The only important data to watch will be the UK house price estimate by Halifax. Based on the previous estimate by Nationwide, analysts believe that prices started to stabilize in May as mortgage rates rose.

The GBP/USD is also moving sideways as US bond yields retreat. The yield of the 10-year declined to 2.977% while that of the 30-year fell by 1.85% to 3.13%. The spread between the 10 and 2-year bond yields remained unchanged.

This price action is likely because investors are waiting for the upcoming American inflation data. The expectation is that the country’s inflation remained close to its 40-year high although it started to peak.

One sign of this is that some retailers will be forced to lower prices because of their high inventories. On Tuesday, Target said that it will start lowering some prices in the coming weeks because it over-purchased products to boost its readiness.

GBP/USD forecast

The four-hour chart shows that the GBP/USD pair has been in a tight range in the past few days. It managed to move to a high of 1.2590, which was slightly above this week’s low of 1.2438. It has also crossed the 25-day and 50-day moving averages and is approaching the important resistance level at 1.2666.

The Money Flow Index (MFI) has moved close to the neutral level of 50. Therefore, the pair will likely keep rising as bulls target the key resistance level at 1.2670.

We expected that the gains in the EUR/USD price would be temporary, as the price jumped towards the 1.0748 resistance level, following new tightening comments by European Central Bank Governor Lagarde. The pair returned to decline quickly after the markets absorbed the statements to the support level 1.0642 and settles around the level of 1.0670 at the time of writing the analysis, before announcing the growth rate of the US economy.

European Central Bank President Christine Lagarde said officials would not rush to withdraw stimulus as her French colleague echoed her to insist there was no consensus on a half-point rate hike. A day after the European Central Bank president’s schedule of quarter-point increases angered hawkish officials wanting the option to act more aggressively.

“I don’t think we’re in a situation where there is a lot of demand right now,” Lagarde said at the World Economic Forum in Davos, Switzerland. “It is certainly supply-side inflation of the economy. And in that case, we have to move in the right direction, of course, but we don’t have to rush, and we shouldn’t panic.”

Lagarde spoke after publishing a blog post effectively setting the course for the ECB’s next three scheduled decisions that will put the institution on track to finally exit sub-zero monetary policy and align more closely with its global peers already working against the threat of inflation. Villeroy’s notes indicated that he and other officials are currently in agreement with her schedule.

“The 50 basis point rise is not part of the consensus at this point, I’m clear,” the governor added. She added: “It will be a normalization of our monetary policy, it will not be tightening,” and “the increase in interest rates will be gradual.”

Under Lagarde’s calendar, the European Central Bank will end its bond purchases in June, raise once in July and once in September, raising the deposit rate from -0.5% to zero. That timetable has angered colleagues who want to keep open the option to act faster, according to people familiar with the matter. “When you get out of the negative level, it could be at zero, and it could be just above zero,” she said, dismissing concerns about whether the central bank might consider a 50 basis point move. “This is something we will determine based on our expectations, on the basis of our future guidance.”

Both Lagarde and Villeroy see rates moving higher to a level considered neutral, which could be between 1% and 2%. For his part, the French governor has set a vision to reach that range “sometime next year”, which would imply a whole series of price increases within the next 18 months. Investors are betting on four increases of 25 basis points by the European Central Bank by the end of 2022.

The European Central Bank chief played down the risks of a recession in the region, saying that “at the moment, we are not experiencing a recession in the eurozone.” She cited “low rates” of unemployment, large household savings, and the prospect of a strong summer for the tourism industry as forces that would offset negative shocks from the war and record inflation. Villeroy agreed: “When we look at the activity it’s still resilient in Europe.” “We will continue to have significant growth this year.”

According to the technical analysis of the pair: There is no change in my technical view for the price performance of the EUR/USD currency pair. It is still at the beginning of breaking the descending channel and lacks sufficient momentum to confirm this, as it is necessary to move towards the resistance levels 1.0795 and 1.1000, respectively. To do that I still see any gains in the Eurodollar will remain up for sale as long as the Russo/Ukrainian war continues, and the ECB rate hike still has time. On the downside, the support level at 1.0485 will be the starting point for the bears again. The Euro-dollar does not expect important European data today, and all focus will be on the announcement of the growth rate of the US economy and the weekly jobless claims.

Ahead of the release of a batch of important and influential British and US economic data, the GBP/USD exchange rate deepened in a downtrend for nearly a year. It may attempt a corrective recovery this week if global markets welcome the easing of restrictions related to the Corona virus in Shanghai. The sterling dollar pair is stable around the 1.2365 level at the time of writing the analysis, after three trading sessions during which it tried to recover from the last collapse towards the 1.2155 support level. The lowest level in two years, with the strong appreciation of the US currency combined with growing investor concerns about the prospects for the global economy, and the Chinese renminbi extending its massive sell-off in April during the sixth week.

This price action helped lift the US dollar index to its highest level since shortly after the turn of the new millennium before the global market tide turned in favor of the pound late in the European session on Friday, in the process of raising the pound to dollar price again above 1.22 before the weekend. Fortunately for the Pound, there may now be room to extend this recovery after authorities in China announced over the weekend that Shanghai would begin a gradual reopening from the country’s most dangerous “lockdown” to date in what is likely to be meaningful to market sentiment.

China’s shutdown of Shanghai in April has been a significant source of market risk aversion for the past six weeks because the city is home to the country’s largest seaport, which is also the world’s most important due to its importance in international supply chains and the manufacture of goods. This was the reason why the reopening could be a headwind for the safe-haven dollar and a tailwind for many other currencies that could mean an extension of the pound-dollar exchange rate rebound on Friday, although sterling could face technical resistance on the charts once again. Others are at 1.25 or higher.

While the pound against the dollar could benefit from a strong start this week, the risk is that Parliamentary testimony on Monday from policy makers at the Bank of England (BoE), or the subsequent flood of economic data including UK employment and inflation figures limiting From wanting sterling later.

According to the technical analysis of the pair: the recent rebound attempts did not amount to reversing the general trend of the GBP/USD currency pair, where the trend is still downward so far, and the resistance levels 1.2850 and 1.3000 are the most important to change the trend to the upside. According to the performance on the daily chart below, the return of the move towards the support level 1.2215 will strengthen expectations that it might be ready to move towards the psychological support 1.2000 at the earliest time.

The sterling will be affected today by the announcement of jobs and wages figures in Britain. The US dollar will be affected by the announcement of US retail sales and industrial production, and then statements by US Central Bank Governor Jerome Powell.

The overall trend is bearish and there is a likelihood that the pair will drop to 1.0600.

Bullish View

• Buy the EUR/USD pair and set a take-profit at 1.0807.
• Add a stop-loss at 1.0650.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 1.0680 and a take-profit at 1.0600.
• Add a stop-loss at 1.0750.

The EUR/USD pair crashed to the lowest level since 2020 even after the strong victory by Emmanuel Macron and the positive business sentiment data in Germany. It is trading at 1.0715, which is about 13.32% below the highest level in 2021.

US Consumer Confidence Data Ahead

The euro continued its bearish trend as volatility in the financial market continued. The pair ignored the news from Germany and France. On Sunday, Macron had a decisive victory against Marine Le Pen, the right-wing leader. His victory means that status quo in France will continue in the coming years.

Another report came from Germany, where data showed that the country’s business confidence was doing well. According to Ifo Institute, confidence rose to 91.8 in April from the previous 90.8 in March. These results were significantly better than the median estimates of 90.8.

Confidence declined in the retail and construction sectors although it was offset by thev manufacturing sectors. Still, most companies in Germany are struggling with the ongoing inflation pressures.

The next key data to watch on Tuesday will be the latest American consumer confidence data by the Conference Board. Economists expect that confidence among consumers rose for the second straight month to 108. This will be a better confidence considering that inflation is still sticky.

The other important numbers to watch will be on the housing sector. The statistics agency will publish the latest new home sales numbers. Economists expect the data to show that new home sales fell slightly from 772k to 765k. The US will also publish the house price index data that will shed more color on the healthy of the sector.

Still, these numbers will not have a major impact on the pair considering that investors already expect that the Fed will continue hiking interest rates.

EUR/USD Forecast

The EUR/USD pair continued its bearish trend as the market volatility continued. On the four-hour chart, the pair moved below the important support level at 1.0807, which was the lowest level on March 7th. The Bollinger Bands have widened while the MACD has moved below the neutral level while the Stochastic oscillator has dropped to the oversold level.

Therefore, the overall trend is bearish and there is a likelihood that the pair will drop to 1.0600. However, the most likely scenario for Tuesday is where it stages a relief rally and retests the resistance at 1.0807.