The chance of the lira rising against the dollar is still weak, as the pair is heading in a general bullish direction in general.

Today’s recommendation on the lira against the dollar

•  Risk 0.50%.
• Yesterday’s buy deal was activated, and a profit was exited with closing half of the contracts and moving the stop loss point with the price movement

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 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 has stabilized at its lowest levels during the current year, as investors followed the statements made by Turkish President Recep Tayyip Erdogan, whose purpose was to provide some reassurance. The Turkish President said that the Turkish government will face the high cost of living starting from the first months of 2023. He also expressed his regret over the high inflation figures as he called for the impact of this inflation on the economy, explaining that the country does not need to raise the interest rate as the country does not need hot money. He also called on citizens to trust his economic model. With these statements, the Turkish president, who has effective control over the Central Bank of Turkey, cut off any hope of tightening monetary policy in the country. This means that the bank’s next steps will be limited to stabilizing or reducing interest rates. Which reflects the continuing pressures on the price of the lira during the coming period.

Turkish Lira Technical Analysis

The US dollar pair against the Turkish lira traded near its highest levels during 2022, as the pair returned to trading in a narrow trading range, which is shown on the chart. The pair is also trading 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 long-term bullish trend. The pair traded the highest support levels, which are concentrated at 18.08 and 17.98 levels, respectively. While the lira is trading below the resistance levels at 18.16 and 18.33, respectively. The chance of the lira rising against the dollar is still weak, as the pair is heading in a general bullish direction in general. 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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Despite the varying numbers of jobs and wages in the United States of America, the price of the currency pair USD/JPY jumped to the resistance level of 131.35. This is the highest for the currency pair in 20 years, before settling around the 130.30 level in the beginning of trading today, Tuesday. The recent economic figures did not move anything in the expectations of raising US interest rates strongly during the year 2022, which is the strongest factor for record gains for the US dollar against the rest of the other major currencies.

The US dollar gains this week on an important date with the announcement of US inflation figures. Some consensus metrics suggest that economists generally expect the more significant core inflation to accelerate from 0.2% to 0.4% m/m in the US during April in what may be an unhelpful outcome for those in the market.

The occurrence of a peak and subsequent decline in the annual rate of inflation in the US is critical if the US Federal Reserve is to be prevented from raising interest rates at the same pace that was ruled out at least temporarily in its monetary policy decision in May last week.

Overall, one month’s reading doesn’t tell us much. “We want to see evidence that inflation is moving in a direction that gives us more comfort,” Fed Chairman Jerome Powell said following last week’s policy decision. Like I’d say we have two months now where core inflation is a little lower, but we don’t see that as a reason to feel some relief. I think we really need to see that our expectations come true. He added in the last press conference that inflation is under control and has begun to decline.

According to the technical analysis of the pair: There is no change in my technical view of the price performance of the USD/JPY currency pair, as the general trend is still bullish. The psychological top 130.00 is a culmination of the extent to which the bulls control the trend. Forex investors do not care about technical indicators reaching overbought levels after the pair’s recent gains. Continuing factors of the dollar’s strength, especially the future tightening of the US Federal Reserve’s policy, will remain an important factor for the bulls.

Currently, the best selling is waiting for profit taking operations from the resistance levels 131.30 and 132.20, respectively. On the other hand, it broke the support 128.00, a first penetration for the current upward trend. Amid the absence of the economic calendar today of important and influential US and Japanese data, investor sentiment, whether or not to risk appetite, will be an important factor for the currency pair’s movement.

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%.

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

Best entry points buy

• 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 14.85 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 on Wednesday, as investors followed the credit rating agency Fitch’s report on Turkish banks during the last quarter of last year. The report included a number of banks that comprise about 81 percent of the banking sector’s assets. The report stated that during the past year, foreign currency deposits increased more in the last quarter, reaching 63% of total deposits, which reflects weak confidence in the lira and negative real deposit rates amid inflationary pressures. The report also mentioned that the banking sector benefited from a series of interest cuts. Other economic reports also showed an increase in the burdens on the country’s Treasury due to the increase in the costs of the program to protect depositors’ funds, which the Turkish President approved at the end of last year to stop the losses of the lira.

The Turkish lira declined against the dollar during the early trading, as the US dollar pair continued trading within a narrow trading range of 14.64 and 14.74 during the current week. It will continue trading in general within another limited range that was slightly larger between 14.51 and 14.77. There are no changes from yesterday as the pair varied around the moving averages 50, 100 and 200, respectively, on the four-hour time frame, as well as the 60-minute time frame. The pair is also trading the highest support levels, which are concentrated at 14.64 and 14.55 levels, respectively. On the other hand, the lira is trading below the resistance levels at 14.76 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.

Today’s recommendation on the lira against the dollar

– Risk 0.50%.

– None of the buying or selling transactions of yesterday were activated.

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 14.77 levels.

– The best points for setting stop-loss are closing the highest levels of 14.90.

– 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’s trading has stabilized during today’s trading, to complement its stability during yesterday’s trading, after the strong rises recorded by the Turkish currency against the US dollar on Tuesday, as the effective dollar of the Turkish administration in the Russian-Ukrainian negotiations contributed to pushing the price of the lira. These efforts did not produce much, as Turkish Foreign Minister Mevlut Cavusoglu said, on Thursday, that the agreements reached between Ukraine and Russia during the Istanbul negotiations have not been achieved at the practical level. Speaking to the press, the top diplomat in Ankara announced that Turkey would strive to bring the warring parties’ foreign ministers back to the negotiating table. In terms of data, reports from the Turkish Statistical Office showed that the economic confidence index declined to 95.7, compared to 98.2 points. It is negative data that contributed to putting pressure on the price of the lira.

On the technical level, the Turkish lira traded against the dollar during the early trading, to continue within the same framework that it stabilized inside since yesterday. The lira rose after its stability for two weeks against the US dollar within a narrow range on the 240-minute time frame shown through the rectangle on the chart. 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 return to decline from the resistance levels of 14.77. Please adhere to the numbers in the recommendation with the need to maintain capital management.

The Japanese yen collapsed a lot against the rest of the major currencies and against the US dollar, with losses that pushed the price of the US dollar pair against the Japanese yen USD/JPY towards the 119.39 resistance. It closed the week’s trading near it, as the pair’s gains are the highest in five years. The Japanese yen’s decline came as investors combed through the US central bank’s latest monetary policy decision. Tokyo is experiencing tepid economic growth, along with rising price inflation. Nevertheless, the Bank of Japan (BoJ) left the benchmark short-term rate at -0.1%, which was widely expected by market analysts. The negative rate has remained the same since 2016.

Central Bank of Japan Governor Hirohiko Kuroda has predicted that the Ukraine crisis will affect many components of the world’s third largest economy, especially regarding inflation. “The biggest impact on the Japanese economy from the Ukraine crisis is the rise in raw material costs,” he said. Japanese inflation is likely to accelerate significantly for the time being. But it also weighs on the economy from a long-term perspective by lowering corporate profits and household real income.”

That will depend on future crude oil price movements and government steps to cushion the blow. But we can see inflation moving around 2% for some time from April. Higher costs will lead to higher inflation. But it weighs heavily on households and corporate profits, and could have a negative impact on Japan’s economy. We will patiently maintain strong monetary easing to achieve sustainable and stable inflation.”

The BoJ’s pessimistic stance is very different from that of the Federal Reserve and the Bank of England (BoE), two institutions that raised interest rates to curb inflation.

On the economic side, according to the Japanese government, annual inflation rose 0.9% in February, up from a reading of 0.5% in January. Core inflation advanced 0.6% year-on-year last month, in line with market expectations. On a monthly basis, the Consumer Price Index (CPI) rose 0.4%, up from 0% in January. Among other economic data, Japanese industrial production fell 0.8%, machinery orders fell 2%, and capacity utilization contracted 3.2%.

Japanese trade data was mixed in February. Where imports grew 34%, above market expectations of 28%. Exports rose 19.1%, below the average estimate of 21%.

The fading strength of the US dollar confirms the suspicions of some analysts that the market has effectively satiated expectations of a rate hike from the Federal Reserve, thus providing diminishing returns to dollar bulls. Commenting on this, Valentin Marinov, Forex Analyst at Credit Agricole says, “The US dollar is still the king of the high-yield and safe haven G10. However, price action following the March FOMC meeting highlighted that there are limits to which the increased interest rate advantage can support the US dollar across the board.”

Meanwhile, some analysts point to a historical tendency for the US dollar to fall after the first rate hike in the Fed’s raising cycle. Accordingly, Adam Cole, FX analyst at RBC, said: “A worn market axiom, which says selling the US dollar at the first Fed rate hike, is trading with additional momentum after the US dollar failed to rally in the wake of last week’s FOMC optimism.”

According to the technical analysis of the pair: So far, the general trend of the USD/JPY pair is still bullish. At the same time, it is worth noting and emphasizing that the recent gains of the USD/JPY pair moved the technical indicators towards overbought levels, unless the US dollar gains more momentum. Profit-taking may be activated at any time. This is expected strongly, especially after the storm of US interest rate decisions has passed from the US Federal Reserve.

According to the performance on the daily chart, breaking the current trend requires moving towards the support levels 117.35 and 116.20, respectively. Otherwise, the bulls’ control will remain in place for some time.