Short

Will TRY Continue to Fly or Will it Hold the 30 and Say Goodbye

Updated

Price has been pushing higher and higher and climbed thousands and thousands of PIPs since 2021. But with the increased interest rates (42.5%), will this be enough to prevent price from higher? Potentially. There needs to be more confidence in the Lira, which could be happening. Pimco and Vanguard (US Investment Companies), are investing in Turkey, which could be a good sign. If companies are starting to invest in Turkey, this could help their currency issues. What could also help and maybe is helping currently, is the TRY is a good carry trade, especially if there is a halt to the rapid depreciation in the Lira. The CBRT will likely hold rates at his high lvls for a while as they work to break the upward trajectory. Additionally, if analyst, traders, and investors are correct, and the FED reduces rates, this will assist price on pushing lower. Furthermore, when economic data is released, if inflation starts taking a hit to the downside (currently above 61%), this could bring in that confidence that is needed also and start pushing the TRY lower. If all these factors do improve the Lira, I am thinking price might even be able to hit the 27 lvl.

For now, I got a small position on this pair, collecting a decent amount of positive rollover. I will build up as price pushes higher. I am able to sustain if price pushes 10,000 pips against me. Price is currently over 7,000 pips against me, with a manageable floating loss, and I am still looking to build a larger position.

Manage your risk and do your own due diligence before placing any trades.

Note

Price broke the 30 lvl and is climbing higher. There still isn't too much confidence in the Lira. But I will still be sticking it out. I want to see what price will do if and when the FED reduced interest rates. If the FED's do reduce interest rates, then price may drop. Price ranging will be great as I continue to collect positive rollover and would make this pair a great carry trade. I am also waiting to see if price will hit the 32 lvl, where I will start getting into additional positions. If price pushes excessively higher, around the 35 lvl, I'll look at place some hedges to assist (already have a few in place).

Note

Well, price is still climbing and it is only a matter of time until price hits the 32 lvl. There is still very little (if any at all) confidence in the CBRT's actions to stop inflation and commitment to stabilize the Lira. With Hafize Gaye Erkan resigning from her post as the Central Bank Governor, it is likely looked at another Central Bank Governor gone under President Erdogan. Fatih Karahan because the new CBRT Governor and says he is committed to fighting inflation and bringing it down. Just recently was the CBRT meeting, which rates were kept at 45%, yet this has no stopped the depreciation in the Lira.

Yet, I am still sticking with this pair. I do get the feeling that there is a wait to see if the FED reduces rates, which I am thinking will assist the Lira from depreciating further and/or at least reduce it's skyrocketing trajectory. In 2022, price moved up about 57,000 pips, in 2023 over 100,000 pips, and currently over 14,000 pips. Price stands to move potentially about the same amount if not more as in 2023 (some analysts project that 32 is the resistance and will push lower and some say price will hit 35 before turning around). Either way, my position is reduced and I am in here to collect rollover interest.

With Turkey being the largest economy in the Middle East and 17th largest in the World and 7th in Europe (2023), then I am on the side that Turkey will get things under control, eventually. In the meantime, I am able to withstand movements of tens of thousands of pips while collect a massive amount of rollover per day. Now, if there is another hit to interest rates because of another round of unorthodox financials, then I will need to work on a path out of my positions.

Have some great trading out there.

DollarSaenz

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