Tuesday, December 6, 2022

USD/TRY Heads South After Central Bank Decision


Turkey finally took a decisive step towards taming the double-digit inflation, which has been destroying the ’s value for years. The country’s central bank lifted the benchmark interest rate to 15%, up 475 basis points from its previous standing. USD/TRY fell as low as 7.5031 earlier today, on track for a second consecutive week of losses.

The pair turned south after 12 years of gains. This bearish reversal seems to be right on schedule, according to our big picture analysis, published late-August, even though it is a bit early to make that conclusion. USD/TRY ‘s hourly chart, however, looks very encouraging from a bearish standpoint. Take a look:


The pair’s decline from 8.58 to 7.50 so far this month looks like a textbook five-wave impulse. The pattern can be labeled i-ii-iii-iv-v in what should be either wave 1 or A of a larger structure. The Elliott Wave theory suggests we should expect a three-wave correction after every impulse.

In the case of USD/TRY, a corrective recovery in wave 2/B makes sense before the downtrend can resume in wave 3/C. This means a rally up to ~8.0000 makes sense in the short-term. As long as the pair trades below the starting point of wave 1/A, however, targets below 7.5000 remain plausible in wave 3/C. And if our big picture outlook is correct, the rate can go much further down in the long-term.

Original Post

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Please enter your comment!
Please enter your name here



Related Stories