Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
USD/TRY vs inflation
2021-04-30 • Updated
What's happening
Recently, a new Turkish Central Bank Governor was appointed: Sahap Kavcioglu. He will start his duties as the Turkish lira is almost as cheap as ever - only recently, USD/TRY ceded from the once-again-reached all-time highs of 8.5.
The inflation is very high in Turkey - it was %16.2 in March. That'll be the main focus of the newly appointed governor's speech today. He will advise how the Turkish Central Bank will manage inflation with the interest rate, and that'll shed light on the possible future of USD/TRY.
Essentially, one of the core factors of the instability in the monetary policy in Turkey is that its President Recep Tayyip Erdogan believes that higher interest rates lead to more inflation than before - that goes against the traditional view that hawkish moves limit inflationary dynamics in the economy.
How to use that
Scenario 1
Sahap Kavcioglu goes hawkish; also, his plan makes economic sense in the eyes of international observers; the Turkish Central Bank is expected to gain credibility and the Turkish lira starts rising in value again: USD/TRY will go down so you sell.
Scenario 2
Sahap Kavcioglu fails to share a formidable plan to fight off inflation and continues with the dovish line preferred by the Turkish President; USD/TRY is likely to go up as the lira will lose value: in this scenario, the all-time high resistance of 8.50 may be broken os you buy USD/TRY.
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Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
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Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...