USD/TRY: Lack of a Strong Reversal Lower May Attract Bulls

The USD/TRY continues to trade within the upper tier of record breaking prices, and the lack of a serious selloff could propel more speculation.

The USD/TRY is trading near the 9.70000 ratio as of this writing. On the 22nd of October, the USD/TRY reached a record level of 9.83000 approximately. Yes, the Forex pair did trade lower after reaching this apex and a value of about 9.41000 was demonstrated on the 26th of October. However, this low then saw a reversal higher, which has managed to keep pace and a high of nearly 9.75000 was seen yesterday.

While some speculative bearish traders who are technically inclined may say the USD/TRY correlated to the broad Forex market the past week and be correct. The problem is that the pair did not reverse lower in a dramatic fashion after reaching a short-term high yesterday, which many other major Forex pairs accomplished.

Yesterdays U.S Federal Reserve monetary policy statement may have had big implications for most major currency pairs globally the past week. However, after its release yesterday, the USD/TRY continued to show it is impeded by its own flow of rather challenging developments which occur on a steady basis inside of Turkey due to economic mismanagement from above.

A low of only 9.64000 was seen late yesterday and early today after the release of the U.S Fed statement, and the USD/TRY has resumed momentum upwards. This doesnt guarantee the bullish thrust will continue into infinity for the USD/TRY, but it does point out technically the Forex pair remains within the upper domain of it record breaking values and shows little inclination to reverse wildly lower.

There may be brave traders who want to sell the USD/TRY and search for lower values based on the notion the Forex pair has been overbought, but the trend is troubling and fundamental conditions for the Turkish lira remain unclear. Traders who do sell the USD/TRY need to use stop loss orders and be realistic regarding their price objectives. Certainly reversals lower are bound to happen on occasion, but until the USD/TRY breaks through the 9.20000 level (which feels like a large distance away), the pair is unlikely to find a wave of big speculative selling positions grow.

Buying the USD/TRY on slight moves lower could be a solid conservative method of going long the Forex pair. More aggressive traders may want to simply see current prices sustained and then enter the market with buying positions based on the belief the USD/TRY has further room to traverse higher. Speculators should use entry price orders to make sure ‘fills’ meet expectations. Traders should also consider the possibility they need to carry their trading positions overnight to allow for their higher targets to be fulfilled.

Turkish Lira Short-Term Outlook

Current Resistance: 9.74000

Current Support: 9.63000

High Target: 9.84200

Low Target: 9.51100