Today’s recommendation on the lira against the dollar

• Risk 0.50%.
• None of the buy or sell transactions of yesterday 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 buy entry points

Entering a long position with a pending order from 17.98 levels

• The best points for setting stop-loss are closing the highest levels of 17.74.
• 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

Analysis of the Turkish lira

The USD/TRY stabilized against the dollar at its lowest level during the current year, near the highest level for the pair recorded during the past year. This is after the Turkish Central Bank surprised the markets and cut the interest rate last Thursday by 100 basis points or 1 percent. The stimulus policy pursued by the Turkish Central Bank is one of the biggest reasons that put pressure on the price of the lira, which is slowly declining against the dollar. During the day, the Turkish President will meet with the Council of Ministers to study the market’s reaction to the interest rate cut in conjunction with the expansion of inflation. Meanwhile, investors followed up on what could be called tensions at the political level after the United States accused Turkey of helping Russia evade some sanctions. In this regard, US Deputy Treasury Secretary Wali Ademo said on Saturday that Moscow is trying to use Turkey’s willingness to help resolve the crisis in Ukraine to bypass Western sanctions. During the call between the Treasury Secretary and Turkish Deputy Finance Minister Yunus Ilyas, Ankara emphasized that it would not allow Russia to violate the sanctions imposed by Western countries due to its invasion of Ukraine. Political tensions may represent one of the reasons for putting pressure on the price of the lira, which has no hope of rising in light of the current political and economic conditions.

Technical Outlook

The US dollar against the Turkish lira settled at its highest level during 2022, after breaking the narrow trading range in which the pair has settled since the beginning of the month, which is shown on the chart. The pair traded the highest support levels, which are concentrated at 17.98 and 17.85, respectively. While the lira is trading below the resistance levels at 18.16 and 18.33, 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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Today’s recommendation on the lira against the dollar

Risk 0.50%.

None of the buy or sell trades of yesterday’s recommendations were activated

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 17.11 levels
• The best points for setting stop-loss are closing the highest levels of 16.94.
• 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 17.41

The Turkish lira fell with the dollar’s rise during today’s early trading. The lira lost its strong gains of 5 percent, which it recorded about two weeks ago, after government decisions about lending to companies that have a certain limit of foreign capital. The government’s efforts to maintain the value of the lira against the dollar went unheeded. But the general policy followed by the state represents a burden on the Turkish currency with the continued rise in inflation and the Turkish Central Bank’s refusal to keep pace with the monetary tightening that most central banks around the world facilitated. Yesterday, the Federal Reserve revealed a tendency to further tighten monetary policy in the US if the expansion in inflation figures continues. The aforementioned matter raised the dollar against most financial assets and, in turn, against emerging market currencies.

On the technical front, the Turkish lira fell against the US dollar, as the pair relied on the rising trend line on the four-hour time frame shown on the chart, at the same time the pair is trading the highest levels of support at 17.11 and 17.00, respectively. At the same time, the lira is trading below the resistance levels at 17.39 and 17.50, 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. 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.

Our expectations indicate more decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.81%, to lose the index by -269.24 points. It settled at the end of trading at the level of 32,910.91, after rising by 0.80% during Tuesday’s trading.

US stocks fell on Wednesday, with Treasury yields rising above the psychologically important 3% level, while oil prices jumped, raising concerns about inflation and interest rate expectations. The 3% level investors focus on because it represents an increase in interest rates and a reflection of inflation and market volatility.

Markets are now eagerly awaiting inflation data when the CPI is released at the end of the week, and economists expect prices to have risen 8.2% annually in May, compared to an 8.3% increase in April. Markets want to see inflation fall much faster.

The Federal Reserve is expected to raise interest rates by half a percentage point in June and July when it meets next week. But with inflation stabilizing at its highest levels in four decades, the Fed could remain aggressive about raising interest rates in the fall.

Meanwhile, the Organization for Economic Co-operation and Development lowered its forecast for global economic growth for this year to 3% from 4.5%, and forecast growth to slow to 2.8% in 2023, citing a “new set of adverse shocks” due to Russia’s invasion of Ukraine. Closures in China related to combating the outbreak of the emerging corona virus.

Technically, the index’s decline came as a result of the stability of the important resistance level 33,271.90. This is resistance that we had referred to in our previous reports, in light of the dominance of the corrective bearish trend in the short term. It is trading within the range of a bearish price channel, as shown in the attached chart for a (daily) period. We note that divergence is negative with the relative strength indicators, after reaching the areas of severe overbought. This is in an exaggerated manner compared to the movement of the index, with the start of the influx of negative signals from them. There is continuing negative pressure of its trading below the simple moving average for the previous 50 days.

Therefore, our expectations indicate more decline for the index during its upcoming trading, as long as the resistance 33,271.90 remains intact, to target the main support level 32,000.

Our expectations indicate a further decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to break a series of gains that continued for six consecutive sessions. It recorded losses in its last sessions by -0.67%, to lose the index towards -222.84 points to settle at the end of trading at the level of 32,990.13. This is after rising with trading on Monday, by 1.76%, the index closed the month of May with a slight monthly gain of 0.04%.

President Joe Biden met with Federal Reserve Chairman Jerome Powell Tuesday afternoon to discuss the economy and inflation. In an opinion piece in the Wall Street Journal, Biden said he would not seek to influence the Fed’s decisions.

On the economic data front, the Conference Board’s index of consumer confidence fell slightly in May to 106.4 from 108.6 in April, reflecting concerns about rising inflation and a slowing economy. Economists polled by the Wall Street Journal had expected the index to reach 103.9.

US home prices rose again in March even as mortgage rates rose, leaving prices at all-time highs. The Standard & Poor’s CoreLogic Case-Shiller Price Index for 20 cities is up 21.2% year over year, while the Federal Government Price Index is up 19% in the same period.

Technically, the index’s decline comes as a result of the stability of the resistance level 33,271.90, that resistance that we referred to in our previous reports. This is in light of the dominance of the corrective bearish trend in the short term. It’s trading within the range of a bearish price channel, as shown in the attached chart for a (daily) period.  The continued negative pressure of its trading is below the simple moving average for the previous 50-day period, as we notice during the beginning of a negative crossover with the relative strength indicators. This is after it reached areas of severe overbought, in an exaggerated way compared to the movement of the index which suggests the start of a negative divergence in it.

Therefore, our expectations indicate a further decline for the index during its upcoming trading, as long as the resistance level 33,271.90 remains intact, to target the main support level 32,000.

Gold futures enjoyed modest weekly gains, despite slowing US inflation gains and Fed optimism. The yellow metal has been struggling in recent months due to the US central bank’s aggressive and hawkish campaign. Gold prices could look towards the institution’s potential move to ease higher interest rates. The price of gold started this week’s trading, rising to the resistance level of 1863 countries for an ounce, after it recorded the support of 1840 dollars an ounce last week.

All in all, the price of gold recorded a weekly increase of about 0.7%, keeping its year-to-date gains intact at around 1.5%. In the same performance, the prices of silver, the sister commodity to gold, rose above the level of $ 22 at the end of trading last week. Accordingly, the price of the white metal also recorded a weekly support by about 2.5%, to reduce its loss since the start of the year 2022 to date to less than 5%.

Gold and silver prices are on the rise after the US central bank’s preferred inflation indicator, as the PCE price index rose at a slower pace than in the previous month.

According to official data, in April, the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, rose at an annualized pace of 6.3% in April. This is a slight decrease from a rise of 6.6% in March. On a monthly basis, the PCE price index rose 0.2%, down from 0.9% the previous month. The core PCE price index, which strips out the volatile food and energy sectors, rose 4.9% in April, down from a 5.2% increase in March. The monthly core PCE price index was unchanged at 0.3%.”

Overall, this could lead the Fed to stop quantitative tightening after it raised the benchmark US interest rate by 50 basis points at the FOMC meetings in June and July. This will be beneficial for gold as it is sensitive to a higher interest rate environment as it raises the opportunity cost of holding non-yielding bullion.

Also, the price of Bitcoin rose after the US inflation report showed a continuous rise in consumer prices.

Gold prices were still able to take advantage of a weak Treasury market and a weaker dollar. The benchmark 10-year bond yield fell 3.1 basis points to 2.727%. The yield on the one-year bonds decreased by 0.6 basis points, while the yield on the 30-year bonds decreased by 3.6 basis points. The US Dollar Index (DXY), which measures the performance of the US currency against a basket of major currencies, fell 0.11% to 101.72, from an opening at 101.83. Accordingly, the index will record a weekly loss of 1.4%. A low dollar is beneficial for dollar-priced commodities because it makes them cheaper to buy for foreign investors.

In other metals markets, copper futures rose to $4.3005 a pound. Platinum futures rose to $945.60 an ounce. Palladium futures contracts for June were unchanged at $1,955 an ounce.

According to gold technical analysis: So far, the price of gold is still at the beginning of the exit from the last descending channel. The bulls need to move towards the resistance levels of 1885 and 1900 dollars, respectively, to change the general outlook to bullish and continuously. On the other hand, the bearish momentum and the stronger bears control will be in case it moves towards the support levels of 1838 and 1820 dollars for an ounce, respectively. I still prefer buying gold from every bearish level. Gold may remain in a limited environment of performance until the US job numbers are announced, which have a strong reaction to the US dollar and, accordingly, to the gold market.

We expect the pair to rise until the resistance levels at 14.77 as well as 14.85 before the lira records some gains again.

Today’s USD/TRY Forex Signal

Risk 0.50%.

None of the buy or sell trades of yesterday’s recommendations were activated.

Best buy entry points

• Entering a long position with a pending order from 14.64 levels
• Set a stop loss point to close the lowest support levels 14.36.
• 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 75 pips and leave the rest of the contracts until the strong resistance levels at 15.00.

Best selling entry points

• Entering a short position with a pending order from 14.76 . levels
• The best points for setting the stop loss are closing the highest levels of 14.98.
• 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 75 pips and leave the rest of the contracts until the support levels 14.40

The Turkish lira fell during the early trading of Thursday with the same weak pace that it continued to decline throughout the week. Investors followed the statements of Noureddine Nabati, who holds the position of Minister of Finance and Treasury in the country, in which he said that the government will reduce the interest rate sooner or later. Nabati also indicated the government’s success in removing the interest rate hike from the agenda, pledging to reduce inflation by the end of the year and to maintain continuous declines in the inflation rate in the period that follows. Analysts commented on the statements of the Turkish Finance Minister that the state treasury bears a greater burden than usual in favor of a small number of beneficiaries of the program to protect depositors in lira, which was launched by the President of the Republic at the end of last year to calm the strong declines of the lira. Which seems to have had a temporary effect, as the lira continued to decline since then at a steady pace, although I was less rapid than the previous declines.

On the technical front, the Turkish lira declined against the dollar during the early trading, as the USD/TRY continued trading within a narrow trading range between 14.64 and 14.74 levels during the week, as the pair is walking within a rising wedge pattern. There is a general bearish trend within another limited range, if it was slightly larger, between 14.51 and 14.77. Without major changes from yesterday, the pair varied around the 50, 100 and 200 moving averages on the four-hour time frame, while the pair rose above those averages on the 60-minute time frame. The pair is also trading near the highest support levels, which are concentrated at 14.64 and 14.55 levels. On the other hand, the lira is trading below the resistance levels at 14.76 and 14.85. We expect the pair to rise until the resistance levels at 14.77 as well as 14.85 before the lira records some gains again. Please adhere to the numbers in the recommendation with the need to maintain capital management.

   Chart generated by TradingView

https://www.tradingview.com/x/FcnndDlu/

We expect the pair to rise until the resistance levels at 14.77 as well as 14.85 before the lira records some gains again.

Today’s USD/TRY Signal

Risk 0.50%.

Thursday’s buy trade was activated and a profit was exited as the price moved in the direction of the target and the stop loss moved towards the entry point.

Best entry points buy

• Entering a long position with a pending order from 14.51 levels
• Set a stop loss point to close the lowest support levels 14.36.
• 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 75 pips and leave the rest of the contracts until the strong resistance levels at 15.00.

Best selling entry points

• Entering a short position with a pending order from 14.81 levels.
• The best points for setting the stop loss are closing the highest levels of 14.98.
• 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 75 pips and leave the rest of the contracts until the support levels 14.40

The Turkish lira fell during early trading Monday, as investors focused on the morning data as the CPI rose at an annualized rate of 61.1% during March, compared to 54.4% in February. The core price index, which excludes food and energy, rose more than 48% from the previous year. On the political front, Turkish presidential spokesman Ibrahim Kalin said on Friday that Ankara is not planning to “burn all bridges” with Russia and will not join the sanctions against Moscow as a result of the conflict in Ukraine. Kalin also stated that the European Union would not be able to completely end its dependence on Russian energy within the next 10 years despite plans to do so within two years amid Russia’s intervention in Ukraine.

On the technical level, the Turkish lira’s trading declined against the dollar during the early trading, with the lira losing part of its gains recorded during the past week. Although the lira is still trading in general within a narrow range in the range between 14.51 and 14.77. The pair varied around the 50, 100 and 200 moving averages, respectively, on the four-hour time frame, as well as the 60-minute time frame. The pair is trading the highest levels of support, which are concentrated at 14.51 and 14.43 levels, respectively. On the other hand, the lira is trading below the resistance levels at 14.77 and 14.85, respectively. We expect the pair to rise until the resistance levels at 14.77 as well as 14.85 before the lira records some gains again. Please adhere to the numbers in the recommendation with the need to maintain capital management.