The Dow Jones Industrial Average saw its biggest one-day, pips, and percentage loss since June 16th.

The Dow Jones Industrial Average closed sharply lower during its recent trading at the intraday levels, to record losses for the second consecutive session, by -1.91%. The index lost about -643.13 points and settled at the end of trading at the level of 33,063.62, after its decline in trading last Friday by -0.86%. It ended the week’s trading with a decrease of -0.16%.

The Dow Jones Industrial Average saw its biggest one-day, pips, and percentage loss since June 16th, as investors remained concerned about the possibility of another aggressive rate hike.

Federal Reserve Chairman Jerome Powell and other central bank officials and policymakers will gather this week at the annual Jackson Hole event. Powell is due to deliver a speech on the economic outlook on Friday, and investors will hear any indication of whether a 50 basis point or 75 basis point increase is likely at the September FOMC meeting.

The probability of the Fed raising rates by 75 basis points to a range of 3% to 3.25% increased to nearly 54% as of Monday, compared to 47% on Friday and 39% a week ago.

Investors will also be looking for details about the Fed’s plans to cut its roughly $9 trillion balance sheet, a process that began in June.

Dow Jones Technical Outlook

• Technically, the index previously faced a strong resistance represented by a bearish trend line in the medium term.
• This is shown in the attached chart for a (daily) period.
• This coincided with the start of negative signals on the relative strength indicators, after they reached at the same time overbought areas.
• It caused increasing pressure on the index to break in its recent trading the 33,240 support level.

All of this comes in light of the dominance of a bullish corrective wave in the short term, supported by its continuous trading above its simple moving average for the previous 50 days. It represents the last stronghold of support that could gain it the necessary positive momentum and give it the ability to regain its recovery.

Therefore, given the index’s stability below 33,240, we expect it to decline further during its upcoming trading, to target the support level 32,273.

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The Dow Jones Industrial Average Index rose during its recent trading at intraday levels, to achieve gains for the fourth consecutive day, by 0.45%. It added about 151.39 points and settled at the end of trading at the level of 33,912.45. It is achieving the longest series of gains since late May After rising by 1.27% during trading on Friday, last week the index rose by 2.92%.

The Federal Reserve Bank of New York’s Empire State Business Conditions Survey, a measure of manufacturing activity in the state for August, fell 42 points from July to -31.3. This was well below economists’ consensus of +5.0 before the release, down 6 points. It’s also the second largest monthly drop in the survey’s history.

The drop in the survey came from new orders and shipments, one positive side may be that there are signs of easing price pressures in August, supporting the narrative of peak inflation that has boosted markets recently. Analysts are also playing down the reading, if only temporarily, because manufacturing in New York is a small part of the country’s manufacturing base.

This is why we should be interested in the next regional business survey coming Thursday from the Philadelphia Fed. If it’s as bad as New York then recession fears could return quickly, which should affect stock prices, commodity prices, bond yields and the dollar.

Dow Jones Technical Outlook

Technically, the index continues to rise as a result of being affected by leaving the range of a bearish corrective price channel that limited its previous trading in the short term. It is shown in the attached chart for a (daily) period, with the positive signs appearing on the relative strength indicators. This is despite reaching overbought areas, In addition, it is benefiting from the continuation of the positive support due to its trading above its simple moving average for the previous 50 days.

Therefore, our positive expectations surrounding the index continue during its upcoming trading, as we expect it to rise to target the first resistance levels at 34,820.90, in preparation for attacking it. This positive scenario will continue as long as the support level 33,240 remains intact.

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Today’s recommendation on the lira against the dollar

Risk 0.50%.

Yesterday’s buy trade was activated, and half of the contracts were closed with the price rising towards the target and providing a stop loss point.

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

Analysis of the Turkish lira

The Turkish lira fell slightly to exceed the peak recorded during this year after inflation data issued by the country’s Statistics Institute today. The data revealed that the country’s inflation rate rose to a new high compared to June, the number had risen by 2.37%. Recording 79.6% during July, the highest level since 1998. The report attributed the main increase in the Consumer Price Index due to a jump in transport prices, which rose by 119.11% on an annual basis. The rise in the prices of energy imports was primarily responsible for these rises, as Turkey is one of the countries that imports most of its energy needs. Experts do not expect the possibility of controlling the inflation rate in light of the stimulus policy pursued by the Turkish Central Bank, which is under the effective control of the country’s President Recep Tayyip Erdogan, who believes that the interest rate is the mother of all evils.

Lira Technical Outlook

The Turkish lira fell against the US dollar, as it recorded a new high at 17.98, the highest level for the dollar against the lira this year. In general, the pair’s movement continued with the same trading pattern that the pair has been following since last week. The lira traded around the highest recorded during the current year, after falling with a strong candle during yesterday’s trading. The intervention of the Turkish Central Bank in the strong movements of the pair appears on the pullbacks shown on the chart, before the pair’s rise returns. The pair is 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 bullish trend on the medium term. The pair is also trading above the rising trend line on the four-hour time frame, shown on the chart, at the same time, the pair is trading the highest support levels that are concentrated at 17.80 and 17.70 levels, respectively. While the lira is trading below the resistance levels at 18.00 and 18.32, respectively. We expect to re-record new highs, especially with every dip in the pair, which represents a buying opportunity. Please adhere to the numbers in the recommendation with the need to maintain capital management.

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We expect the price to rise from the current levels or the closest levels of support.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The buy trade of the recommendation was activated on Thursday and reached the stop loss point.

The sell trade of Wednesday’s recommendation was activated and the target was fully reached.

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 buy position with a pending order from levels of 15.70
• The best points for setting stop-loss are closing the highest levels of 15.48.
• 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 16.40

The lira rose strongly during trading on Friday, to complement its strong rise against the dollar, with the markets returning to trading on Monday. The lira’s gains expanded after government measures issued last Friday regarding lending to companies that have income in hard currency. The Turkish government decided to stop loans to companies with foreign liquidity of approximately 980,000 dollars, or the equivalent of 15 million liras. This is except for specific conditions, including the purchase of euros or investment in protected deposit accounts in foreign currencies. The lira, which recorded strong losses during the second quarter of this year, woke up after promises from President Erdogan of further cuts in interest rates. The country’s inflation rate also rose to 73.5 percent during the month of May, causing the Turkish currency to lose about 20 percent of its value this year after losing 40 percent of its value last year. It is noteworthy that this measure has already had a strong impact in contrast to a number of measures taken by the Turkish Central Bank and the Ministry of the Treasury in the country

On the technical front, the Turkish lira jumped against the US dollar, as it broke the narrow trading range between 17.19 and 17.33 lira by a large margin. The pair reverses the general upward trend, with the pair trading support levels that are concentrated at 15.70 and 15.00, respectively. The pair also turned lower than the moving averages 50, 100 and 200, respectively, on the four-hour time frame, as well as on the 60-minute time frame, indicating a decline in the medium term. The pair bounced from the moving average 50 on the daily time frame. At the same time, the lira is trading below the resistance levels at 16.40 and 17.10, respectively. The pair is trading at strong support levels represented by the 50 Fibonacci levels on the ascending wave that starts from 03-05-2022 until the top recorded on 06-21-2022. We expect the price to rise from the current levels or the closest levels of support shown through the recommendation numbers. Please adhere to the numbers in the recommendation with the need to maintain capital management.

We expect a continuation of the lira’s decline until the mentioned resistance levels.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

Yesterday’s sell trade was activated and reached the stop loss point

Best buy entry points

• Entering a long position with a pending order from 14.88 levels
• Set a stop-loss point to close the lowest support level 14.46.
• 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 14.85.

Best selling entry points

• Entering a short position with a pending order from 15.29  levels
• The best points for placing a stop loss are closing the highest levels of 15.08.
• 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 14.88

Turkish lira continues to decline against the US dollar, the lira recorded its lowest level this year, amid a strong decline in emerging market currencies and financial assets in general against the US dollar. Yesterday, most financial assets recorded strong declines as the stock markets, precious metals, cryptocurrencies, major currencies, and of course emerging market currencies declined. In light of the US Federal Reserve maintaining the policy of tightening against the policy of easing followed by the Turkish Central Bank, where the interest rate was fixed after cutting it by about 5 percent during the past year. The Turkish lira recorded a decline of about 40 percent during the past year, before regaining its balance at the end of the year, after which it began to decline at a weak pace.

On the technical level, the Turkish lira fell strongly against the dollar during yesterday’s trading, as the Turkish currency continued to decline to break the limited trading range in which the currency settled for a long time. The pair continued to rise above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame. At the same time the pair is trading the highest levels of support, which are concentrated at 14.99 and 14.87 levels, respectively. On the other hand, the lira is trading below the resistance levels at 15.29 and 15.50. The pair targets 15.29 levels, which represents the 61 Fibonacci level of the descending wave that recorded its top on 12/21-2021 and recorded its bottom on 12/23-2021. We expect a continuation of the lira’s decline until the mentioned resistance levels. Please adhere to the numbers in the recommendation with the need to maintain capital management.