Turkish Lira on the way to another wave of weakness or will we have surprises?

Turkish lira analysis forecast

A lot happens with Turkish lira last month, Turkish lira weakness against us dollar to a new record above 4 and drop at the end of the month – last day to 3.96+_ below 4, the economy is vulnerable to external shocks since it relies on foreign capital inflows to finance its current account deficit.
Erdogan has clearly stated his opposition to interest rate hikes and previously said rate cuts are necessary to further stimulate growth, Inflation last month was at 10.26 percent, which is double the Turkish central bank’s target.

Last month I post analysis on Turkish lira forecast moves

Turkish lira  traded almost 3 months between 3.83+_ to 3.73+_ boundary price after last year we saw in November new record and Turkish lira almost touch 4 against the dollar, this week Turkish lira break up above 3.90 for the first time since then,Turkish lira  also hit by weakness in emerging markets and concerns from military conflict with Syria, also from economic problems such as widening current account deficit and high inflation – we going to see new records or Side movement with a tendency to strengthen, similar to what happened in the past ?

Turkish lira analysis

My assumption was that we are going to see the Turkish lira going to 4.12

I’m covering Turkish lira price forecast and analysis for many years, I mention not one that we are going to see the Turkish going over 4 to 4.11-4.20 , Turkish lira  reached, for now, a new low – check the charts – if I’m seeing the right picture so we are in process of creating new lows above 4, but the question if it will stop there ?

Looking on the charts showing us 2 times in history that it happens so I’m guessing this time it will be the same behavior, but the question is if there will be any innervation from turkey government on those numbers?

Technical analysis and similar pattern appears in 2002 – look the chart, if this is the same scenario, so we need to expect to see the Turkish lira going below 3.52 price, but it will happen only if Turkish lira won’t go up above 4.10, if this is the case , so we need to be ready for Trading a shuffle strip for a period of a long time, Which means that the programming of a trading band between the ranges of 3.4 to 4 for a long period, similar to the scenario in 2002-2008

My assumption now is that we are witnessing the same move as 2002-2003 – that’s mean that usd try going to see again lower prices such as 3.34 and even lower

Technical analysis review

Long-term trend forecast moved is still up as long as 3.34 will hold!

Break below 3.34-6 on weekly basis will send the Turkish to 3.24-6 while break above3.91 will lead the USD/try to cope with 4.11+

Pay attention to 3.73 price level! – closed below this level will send the Turkish lira to cope with 3.59-3.62+_ price area – 

A weekly close above 3.9480+- will confirm for more up moves 

Points to pay attention: 3.93-4+_   / 3.87  / 3.83+_ / 3.74+_/3.66

turkish lira forecast

This review does not including any document and/or file attached to it as an advice or recommendation to buy/sell securities and/or other advice