Current trend

The USD/TRY pair is developing a poor “bullish” momentum formed at the beginning of the week and is testing the level of 34.1720 for a breakout, renewing the highs of August 29.

The activity of the “bulls” in the market remains restrained since at 14:30 (GMT 2), market participants are expecting the publication of the personal consumption expenditure price index, which is used by US Fed officials when assessing average inflation. According to preliminary estimates, the August indicator will decrease from 2.5% to 2.3% YoY and from 0.2% to 0.1% MoM, and the core indicator will increase from 2.6% to 2.7% and remain at 0.2%, respectively. Significant fluctuations in the indicators may lead to significant changes in expectations regarding further interest rate reduction. Thus, experts assume two more adjustments by the end of 2024 by at least 25 basis points each. At the same time, investors will pay attention to statistics on personal income and expenses of American households, which may change from 0.3% to 0.4% and from 0.5% to 0.3%, respectively.

Analysts assess the likelihood of monetary policy easing in Turkey by the end of the year. Earlier, the media reported that the Central Bank of the Republic of Turkey may change the cost of borrowing from 50.00% to 46.65% due to the stabilization of inflation risks. Recep Tayyip Erdogan’s government expects the September consumer price index to slow from 51.97% to 50.00% YoY or less, and economists expect the regulator to return to “dovish” rhetoric in December or at the latest in the first quarter of 2025, against which the country’s financial institutions are adjusting their deposit offers. Thus, in the first half of the year, the banking sector, which provided interest rates above 50.00% on deposits with a maturity of more than three months, has now reduced the figure to 32.0–38.0%. The country’s citizens are trying to preserve their savings amid economic instability, and this year, the share of deposits in lira in their total volume has exceeded 52.0%.

Support and resistance

On the daily chart, Bollinger Bands are growing uncertainly. The price range is expanding, letting the “bulls” renew the highs. The MACD indicator is rising, maintaining a poor buy signal (the histogram is above the signal line). Stochastic is near the highs, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 34.1800, 34.2325, 34.3000, 34.4091.

Support levels: 34.0939, 34.0000, 33.9022, 33.8000.

Trading tips

Long positions may be opened after a breakout of 34.1800, with the target at 34.3000. Stop loss — 34.0939. Implementation period: 2–3 days.

Short positions may be opened after a rebound from 34.1800 and a breakdown of 34.0939, with the target at 33.9022. Stop loss is 34.1800.