Market News & Analysis


Top Story

Turkey's Inflation Rate Continues to Plummet

Turkey’s Inflation Rate (YoY) for October dropped to 8.55% from 9.26% in September, and from 15.01% in August.  In January of this year,  the inflation rate was 20.3%!  The drop this month was primarily due to a slowdown in food and housing prices.   The Central Bank of Turkey (TCMB) doesn’t meet again until December and a cut is widely expected.  The question will be “How Much?”.  The TCMB cut interest rates in October to 14% from 16.5% in September.  As recently as June, overnight interest rates were at 24%!  Separately, Fitch maintained its BB- rating for Turkey, one notch above Moody’s and S&P.  The rating agency also raised its outlook to stable from negative.  Fitch didn’t think geopolitical risks would hurt the Turkish Economy.

On October 4th, USD/TRY broke out of long-term symmetrical triangle dating back to August of 2018.  Price has recently pulled back and is retesting the downward sloping trendline of the triangle near 5.6760.  Below that is horizontal support at 5.6367. 

Source: Tradingview, City Index

On a 240-minute chart, USD/TRY broke out of a falling wedge on October 4th and a few days later came back to retest the trendline.  After a false break below the downward sloping trendline, price broke higher.  The target of a falling wedge is a retracement of the entire wedge.  Price retraced the entire move, and then some, to 5.9370.  From there, USD/TRY began to form ANOTHER falling wedge.  Currently, price is attempting to break out of the second falling wedge.  If price follows the same pattern as the breakout of the first falling wedge, price could retrace the entire wedge formation, heading back towards 5.9370.  Now that USD/TRY has broken above the trendline, support will be a retest of the trendline near 5.7156.  Below that, support will be at the bottom trendline of the wedge near 5.65.  If price breaks below there, a support trendline from early September comes across near 5.6175.

Source: Tradingview, City Index


From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.