Turkish Lira tumbles to record lows

Turkey avoids currency interventions as the USD/TRY tumbles.

Charts (6)

The US Dollar was mixed against all of its major pairs on Thursday.

On the U.S. economic data front, Initial jobless claims fell by 249 thousand last week to 1.19 million, the lowest since March. Continuing claims decreased to 16.1 million in the week ended July 25th from 16.9 million in the prior week.

On Friday we can expect the monthly payroll report with June Non farm Payrolls expected to reach 1.48 million, down from 4.8 million in May. The U.S. unemployment rate is anticipated to decline slightly to 10.5% from 11.8% in May. Finally, wholesale inventories are anticipated to drop 2% on Month in June, in-line with May.

The Euro was bullish against all of its major pairs except for the AUD and GBP. In Europe, June German Factory Orders were released at +27.9%, much better than +10.1% expected. In the U. K., the BoE has kept its interest rates and Quantitative Easing at GBP 745 billion unchanged, as expected.

The Australian dollar was bullish against all of its major pairs.

Turkey's Lira tumbled to record lows on Thursday. Turkey's central bank said it was closely monitoring developments. "The Central Bank will use all available instruments to reduce the excessive volatility in the markets in line with the price stability and financial stability objectives," according to a statement by the central bank. A similar move in the USDTRY happened back in 2018 when political tensions with the United States caused the lira to fall to $7.24 per USD.

Looking at the chart, the USDTRY has regular periods of bottom basing patterns which price action just broke out off at the $7.00 resistance level which now may test as support. A Fibonacci projection can be made from the swing low of $6.70 to the swing high of $7.38 (record high) to give a 61.8% Fibonacci target of $7.69 on the upside as there is no more prior resistance. A break below Support at $6.88 could potentially signal the end of the uptrend. 

It is hard to predict where the pair will go from here amid extreme volatility however for now, the Turkish Lira remains under extreme pressure and the uptrend in the USDTRY continues.

Source: GAIN Capital, TradingView

Happy Trading

More from Forex

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.

Open an Account