USD/ZAR: Developments in Turkey creates upside risks – MUFG
Analysts at MUFG Bank, consider the USD/ZAR could rise in the short-term linked to the recent depreciation of the Turkish lira. They have the idea of a long position in USD/ZAR at 17.500 targeting 18.400 and a stop loss at 17.100.
Key Quotes:
“ZAR performance has become more tightly linked to negative developments in Turkey. USD/ZAR is currently testing resistance from the end of May highs at 17.665 which if broken would open the door to further near-term gains.”
“The main risk to the trade idea is that the ZAR has already moved along way over the past week as it has fallen by around 5% against the USD. It increases the risk of a short-term squeeze of long positions. One potential risk would be if the CBoT acted decisively and raised rates significantly to offer more support for the TRY.”
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
