Top Story

Turkey's Inflation Rate Continues to Plummet

Turkey’s Inflation Rate (YoY) for October dropped to 8.55% from 9.26% in September, and from 15.01% in August.  In January of this year,  the inflation rate was 20.3%!  The drop this month was primarily due to a slowdown in food and housing prices.   The Central Bank of Turkey (TCMB) doesn’t meet again until December and a cut is widely expected.  The question will be “How Much?”.  The TCMB cut interest rates in October to 14% from 16.5% in September.  As recently as June, overnight interest rates were at 24%!  Separately, Fitch maintained its BB- rating for Turkey, one notch above Moody’s and S&P.  The rating agency also raised its outlook to stable from negative.  Fitch didn’t think geopolitical risks would hurt the Turkish Economy.

On October 4th, USD/TRY broke out of long-term symmetrical triangle dating back to August of 2018.  Price has recently pulled back and is retesting the downward sloping trendline of the triangle near 5.6760.  Below that is horizontal support at 5.6367. 

Source: Tradingview, FOREX.com

On a 240-minute chart, USD/TRY broke out of a falling wedge on October 4th and a few days later came back to retest the trendline.  After a false break below the downward sloping trendline, price broke higher.  The target of a falling wedge is a retracement of the entire wedge.  Price retraced the entire move, and then some, to 5.9370.  From there, USD/TRY began to form ANOTHER falling wedge.  Currently, price is attempting to break out of the second falling wedge.  If price follows the same pattern as the breakout of the first falling wedge, price could retrace the entire wedge formation, heading back towards 5.9370.  Now that USD/TRY has broken above the trendline, support will be a retest of the trendline near 5.7156.  Below that, support will be at the bottom trendline of the wedge near 5.65.  If price breaks below there, a support trendline from early September comes across near 5.6175.

Source: Tradingview, FOREX.com


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 Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.