Current trend

The USD/TRY pair is showing moderate growth, again trying to consolidate above the psychological level of 34.0000. The positions of the American currency are under pressure, which is primarily due to the high probability of a change in the monetary rate of the US Federal Reserve System at the September meeting. The current headline scenario is for a 25-basis-point reduction in borrowing costs, but macroeconomic data due this week could significantly alter that estimate. If the labor market slows down, the possibility of a –50-basis-point change in the parameter increases. Analysts expect Nonfarm Payrolls to increase in August from 114.0 thousand to 160.0 thousand, while Average Hourly Earnings are likely to adjust from 3.6% to 3.7% year-on-year and from 0.2% to 0.3% month-on-month, and the Unemployment Rate could fall from 4.3% to 4.2%. Today at 20:00 (GMT 2), investors will pay attention to the monthly economic report from the US Federal Reserve, the Beige Book, which characterizes the state of the economy in the country’s twelve federal districts and contains information on all types of industry, agriculture, corporate and consumer spending, the real estate market and other indicators at the current moment, and tomorrow investors will pay attention to the information from the Automatic Data Processing (ADP) on private sector employment.

Meanwhile, pressure on the lira remains amid the country's economic situation: in particular, Turkey's Gross Domestic Product (GDP) in the second quarter grew by only 2.5%, which was the worst performance since 2020, consumer spending increased by 1.6% after 7.0% in the previous period, and government spending amounted to about 0.7%. At the same time, inflation in August significantly decreased from 61.78% to 51.97% year-on-year and from 3.23% to 2.47% month-on-month. The Turkish government expects the Consumer Price Index to reach 40.0% by the end of the year. Late last week, the Central Bank of the Republic of Türkiye responded to the sharpest decline in the national currency in five months by taking a series of new measures to increase deposits in the national currency and strengthen liquidity. These include increasing the monthly growth targets of financial institutions to increase the share of lira in the total volume of deposits, including corporate accounts with foreign currency protection in the calculation of the overall target for the transition to deposits in national currency, and increasing the ratio for maintaining mandatory reserves in lira in blocked accounts by 5.0%.

Support and resistance

Bollinger Bands on the daily chart show moderate growth. The price range is narrowing, reflecting mixed trading in the short term. MACD indicator is trying to reverse upwards and form a new buy signal (the histogram has to consolidate above the signal line). Stochastic reversed horizontally approximately in the center of its area, indicating uncertainty in investor sentiment.

Resistance levels: 34.0800, 34.2325, 34.3000, 34.4091.

Support levels: 34.0000, 33.9022, 33.8000, 33.6722.

Trading tips

Long positions can be opened after a breakout of 34.0800 with the target of 34.2325. Stop-loss — 34.0000. Implementation time: 1-2 days.

A rebound from 34.0800 as from resistance, followed by a breakdown of 34.0000 may become a signal for opening of short positions with the target at 33.8000. Stop-loss — 34.1000.