Last Thursday, Turkey’s inflation data came out much worse than expected at 9.26% vs 15.51% expected and 15.01% last. With this drop in inflation, we discussed the possibility of USD/TRY breaking out of descending wedge on a 240-minute timeframe. Today, price not only broke out of the descending wedge, but also broke out of a symmetrical triangle on the daily timeframe, which USD/TRY has been in since August 2018. Price gapped higher on the open and is up over 2.5% on the day.
Source: Tradingview, City Index
Over the weekend, President Trump made a decision to pull US forces out of northeastern Syria. Today President Trump defended his decision, which makes it possible for Turkey to launch an attack on Kurdish fighters. The Turkish Lira was hit hard, and USD/TRY continued higher throughout the day.
The target for the breakout of a descending wedge is a retracement of the whole wedge. Now that price has broken through the 50% Fibonacci retracement level from the August 26th September 30th at 5.8206, the top of the descending wedge is in sight near 5.85. There is a strong resistance zone there, from 5.8500 to 5.8635, which is the 61.8% Fibonacci retracement level from the previously mentioned dates. If price breaks through there, it may tear up to 6.00, the spike highs from August 26th. First support is at the highs if the false breakout from October 2nd at 5.7575. Below that, the next support level is the gap from overnight down to 5.6978.
Source: Tradingview, City Index
Watch for more comments from public officials, tweets from Trump regarding the situation, or military escalations in the area to determine the next direction for USD/TRY.
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.
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.