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


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.