The USD/TRY has soared in Forex early this morning as developing news indicates the Turkish led Erdogan government has arrested opposition politicians and activists, causing financial institutions to react.
The USD/TRY has soared from around the 36.75000 vicinity earlier today, to levels challenging the 40.00000 ratio and above. Day traders who still have open positions in the Turkish Lira are strongly advised to be ultra-careful in the coming hours and days. Political maneuvering (a polite word for strong arm tactics) has taken place in Turkey as the government led by Recep Erdogan has detained numerous politicians and activists early this morning. Social media sites in Turkey are also being hampered.
The USD/TRY which had been trading comfortably around the 36.70000 ratios has soared violently and hit a high of nearly 41.00000 according to a few platforms offering quotes. The USD/TRY as of this writing is near the 39.00000 ratio with lightning quick action. Traders who have a sense of adventure need to understand the USD/TRY is likely to be extremely volatile today and tomorrow. Bids and asks will be wide and fast. Day traders without enough experience are strongly urged to sit on the sidelines and not speculate on the USD/TRY until the dust literally settles.
Behavioral Sentiment During Political Storms and the USD/TRY
The USD/TRY has been within a rather consistent incremental climb higher over the long-term, but the upwards results have been comfortable. The USD/TRY was around the 32.30000 ratio at this time last year. This morning’s political actions by the ruling Turkish government will not help financial institutions feel tranquil. The immediate response in the USD/TRY was a significant jump higher. Traders who had active long positions in the currency pair hopefully were able to cash in profits during the violent rocket ride upwards in the USD/TRY.
However, it should be said that brokers may not have been able to transact the USD/TRY during the turmoil, and speculators will have to remain calm if they are not happy about price fills while trying to cash in winning positions. The USD/TRY has come off of highs seen in the aftermath of the early chaos this morning. Traders should not be lulled into a false sense of calm in the coming hours and be aware there might be additional developments from Turkey.
Erdogan and USD/TRY Speculation Near-Term
The incremental move higher which has been on full display for the USD/TRY was jolted by price velocity today which is liable to be repeated near-term as circumstances in Turkey become clear. Financial institutions will likely remain nervous with the USD/TRY and be hesitant to allow speculative positions to be placed in the near-term.
Traders who want to try and take advantage of the current situation should check with their brokers to see if they are allowed to trade the USD/TRY.
Speculators need to be careful with the bids and asks.
Using entry price orders may be a solution to avoiding some of the turmoil, but traders should understand conditions may remain volatile.
Looking for upside in the USD/TRY may feel logical if perceived support levels are seen technically in the coming hours, but be ready for plenty of reversals.
Turkish Lira Short Term Outlook:
Current Resistance: 39.99000
Current Support: 38.10000
High Target: 42.50000
Low Target: 37.50000
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