Trying to Catch a Falling Knife: USD/TRY, EUR/TRY

Erdogan said he will make sacrifices and “swallow a bitter pill”


On Monday, Turkey’s Finance Minister, Berat Albayrak (who is also the President’s son-in-law),  unexpectedly resigned.  This led to a complete 180 degree turn by President Erdogan who replaced him with the economic friendly Lutfi Elvan.  Erdogan also named Naci Agbal as the new head of the central bank.  Erdogan said he is prepared to make sacrifices and “swallow a bitter pill” as he promised new structural reforms.  This was good news for the Turkish Lira.


USD/TRY is down over 8% on the week so far.  The pair had reached an all-time high of 8.5677 on Friday before the news broke.  So far, the pair is holding horizontal support near 7.7787.  Just below that is the 50% retracement of the move from the August 4th low to the November 6th highs at 7.7389. 

Source: Tradingview,

On a 120-minute timeframe, some may say that the move has already played out as an AB=CD pattern has already complete.  However, it may be a good risk/reward for traders who want to take a shot at a long here and target a move back towards 8.000.  Also notice how the RSI is in oversold territory, near 23.00.  Watch for stops under the 50% retracement level.  The next support level is the 61.8% Fibonacci level from the same timeframe near 7.5408.

Source: Tradingview,


Much of the same can be said for the EUR/TRY, as price has already reached the target price of the AB=CD pattern.  One slight difference is that this pair has broken just under the 50% retracement level from the August 4th lows to the November 6th highs near 9.2503.  It also tested (but so far is holding) the horizontal support at 9.2000.   Longs may be looking to enter the market here with a target back near 9.5000.  Also notice the RSI is in oversold territory near 23.00.  Support is at the 61.8% Fibonacci retracement level of the same timeframe near 9.027.

Source: Tradingview,

Note that the TCMB Interest Rate decision is next Thursday.  Watch for profit taking ahead of that as a forecast of 475bps is priced into the market.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account