Current dynamics

During the Asian session, the USD/TRY pair is testing 34.3750, trying to develop an uptrend towards 34.5703.

As confirmed by macroeconomic statistics, analysts are increasingly making positive predictions about the recovery of the Turkish economy. The Confidence Index, published by the Central Bank of the Republic of Turkey and assessing business conditions and expectations, rose from 93.1 points in August to 98 points in October, the highest level in the last five months. In contrast, in the real sector, namely the manufacturing industry, the Confidence Index rose from 98 points to 102.2 points, and in the services sector to 114.2 points. The improvement in indicators is also reflected in inflation expectations: The regulatory agency's assessment of the Consumer Price Index peaked at 45.28% in October 2023, falling to 27.44% a year later. Macroeconomic statistics such as the current account deficit, public budget balance and unemployment rate have had a positive impact on inflation dynamics. At the same time, the improvement in the Central Bank of the Republic of Turkey’s reserves (adjusted by $221 million to $159.619 billion in the week ending November 1) and the increase in both portfolio and foreign direct investment (and the resulting change in credit assessments) along with the improving indicators suggest that the steps taken by the monetary authorities are having an impact. Standard and Poor’s raised Turkey’s long-term credit rating to BB- from B , citing economic progress and stressing that the regulator does not plan to make any adjustments due to “ambitious plans to reduce inflation, manage employee wage expectations and restore balance to the national economy.”

In contrast, American investors paid attention to data on the labor market at the end of last week: Initial Jobless Claims rose by 221K, less than the 223K estimate but more than the previous figure of 218K, while Continuing Jobless Claims rose from 1.853M to 1.892M. The dynamics were also affected by Hurricanes Helena and Milton, as well as protests by workers at major Boeing Co. plants over wage indexation.

Support and Resistance levels

The instrument is trading in an uptrend: at the moment, quotes are testing 34.3750 (Murrey level [8/8]), which it previously tried to overcome. Consolidation above this level will provide expectations for continued growth towards the target of 34.5703 (Murrey level [ 2/8], Fibonacci extension 100%). The key level for the "bears" is seen as 34.1796 (Murrey level [6/8]), reinforced by the center line of the Bollinger Bands. Its break will allow the resumption of the decline to 33.9843 (Murrey level [4/8]) and 33.7890 (Murrey level [2/8], Fibonacci extension 61.8%).

Technical indicators indicate that the uptrend is maintained: Bollinger Bands are horizontal, but the Stochastic is turning upwards from the oversold zone, and the MACD is increasing in the positive territory.

Resistance levels: 34.3750, 34.5703.

Support levels: 34.1796, 33.9843, 33.7890.

Trading tips

Long positions can be opened above 34.3750 with a target of 34.5703 and a stop loss of 34.2340. Trading time: 5-7 days.

Short positions can be opened below 34.1796 with a target of 33.9843, 33.7890 and a stop-loss of 34.3200.