EUR/TRY: A technical update

Giuseppe Bocci, CTA Independent Analyst

Just a few sessions after reaching an all-time high on Thursday the 18th, the EUR/TRY pair began a pullback, leading to a retest of the 35.60 level. This level corresponds to the resistance of the consolidation channel in which the pair was trapped for the past four months and now acts as a support.

Yesterday the rate reacted with notable strength, surging again and forming a long-bodied bullish candle with an upper shadow on the daily chart, suggesting a price rejection and a clear directional bias, with price action pushing upward.

Assuming the 35.60 support level holds, it is still too early to tell whether EUR/TRY will resume its upward trend or enter a higher trading range. The key movement to watch will be the breakout of the pivot line at 36.30, which now represents a new resistance.

It is worth noting that the pair is currently moving close to the upper boundary of a steep long-term upward trend, which does not show any clear signs of fatigue, even though the momentum indicator displays a clear divergence in both the daily and weekly charts.

The upcoming days present a rich macroeconomic agenda that can provide new clues on the pair's direction. The next Turkish inflation reading, due on August 5th, could affect the market, especially if it diverges from the projected reduction path.

On the other side, today's much-anticipated US PCE index will be released, followed on July 31st by the preliminary EU CPI. These announcements weigh on the USD/EUR exchange rate, whose movements can indirectly influence EUR/TRY as well.

Finally, to gain a broader understanding of the rate dynamics (and associated risks), it is crucial to always consider the Turkish macroeconomic scenario as well as its financial and political situation.

Daily chart

Weekly chart

Author

Giuseppe Bocci, CTA

Independent Analyst

Giuseppe Bocci is an independent trader primarily active in the U.S. stock market, international bonds, commodities, and forex. He has been trading full-time for about ten years, turning a passion into a profession.

GBP/USD remains offered below 1.3600

GBP/USD resumes its decline, reversing Tuesday’s bullish attempt and breaking below 1.3600 the figure on Wednesday. Cable’s marked pullback follows a firm advance in the Greenback as investors continue to assess latest US data as well as the geopolitical landscape.

EUR/USD remains on the back foot around 1.1650

EUR/USD comes under renewed selling interest, slipping back to the mid-1.1600s ahead of the opening bell in Asia. Spot loses momentum on the back of solid gains in the US Dollar in a context of unabated geopolitical tensions and steady caution ahead of key US data releases and Chair Warsh’s speech at the Jackson Hole Symposium on Friday. Looking ahead, the ECB will publish its Accounts on Thursday.

Gold keeps sight of $4,700 ahead of Fed Warsh’s speech

Gold is making another run to retest 15-week highs of $4,697 early Thursday. Gold traders are taking advantage of an upbeat mood-led US Dollar (USD) retreat, looking past hot US core Personal Consumption Expenditures (PCE) Price Index data for July. Renewed USD weakness offers the much-needed boost to Gold, following Wednesday’s pullback from near the $4,675 neighbourhood.

Bitcoin faces recovery test above $80K as ETF demand strengthens

Bitcoin’s (BTC) recent rally has sharply reduced leverage across the market while attracting strong institutional demand, according to Glassnode. In a report on Wednesday, the firm stated that August 19 marked the largest single-day short liquidations recorded by Glassnode’s feed since 2019, with short positions accounting for 85% of all liquidations.

60 days to pay: Nvidia is financing its own demand

The Jensen Huang-helmed Nvidia (NVDA) delivered its second-quarter earnings print with its stock roughly 11% beneath the peak it set in May and around 8% beneath where it traded in mid-August, on the day it told the market it would stand behind up to $105 billion of a single customer's rent. Then it beat everything. Revenue of $96.221 billion against a consensus near $92 billion.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.