The Turkish Lira continues to remain weak via the USD/TRY and is challenging higher resistance.
The USD/TRY has seen a prolonged bullish trend and as global risk sentiment has become cautious the past few trading sessions the forex pair has begun to establish new high watermarks. The 7.50000 above is close and appears vulnerable for speculators anticipating further bullish sentiment. The USD/TRY has been in a long term buying mode and this trend is likely to see its momentum remain strong.
Turkey is a large exporter of manufactured products globally, but its banking and broad business sectors suffer from the rather strong-handed leadership of its government which sometimes tries to overreach with a seemingly misguided policy regarding its ability to manage its economy. The onslaught of coronavirus and its effect on Turkey has also added to buying of the USD/TRY the past six months. The 7.00000 which was stated to be a red line by some in the Turkish government has proven to be weak.
Since late July the USD/TRY has broken through the 7.00000 juncture and sustained its value above while incrementally breaking new resistance with swift upwards momentum. And since the beginning of September, the USD/TRY has added to the bullish run and essentially moved from the 7.34000 mark to its current price vicinity near 7.48000.
Traders of the USD/TRY need to understand the forex pair can certainly be volatile and its direction is not a one-way avenue. Using risk management is crucial and should not be forgotten with the naïve belief the Turkish Lira cannot produce sudden strength. However, because global markets via equity indices have also been nervous the past few trading sessions, the USD/TRY has seen additional buying as the risk-averse environment escalates.
Buying the USD/TRY with limit orders slightly below the current market price action is a logical step. Speculators clearly see the 7.50000 level which is tantalizing close and it may act as a psychological springboard for additional bullish sentiment. Protective stop losses should be considered near the 7.43000 level and traders should be careful not over-leverage their positions with speculative positions that are too confident. The trend for the USD/TRY has been bullish and this momentum is likely to continue, but patience is needed by traders who pursue its attack on vulnerable resistance levels.
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Turkish Lira Short Term Outlook:
Current Resistance: 7.50000
Current Support: 7.43000
High Target: 7.60000
Low Target: 7.40000
