Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

USD/TRY lurches higher as traders question the central bank’s independence, 10.00 next?

Article By: ,  Head of Market Research
October 18, 2021 1:23 PM

Perhaps for those used to trading the latest NFT or meme stock, the chart of USD/TRY may not look to unusual…but for FX traders, the ongoing collapse in the currency of a country in the top 20 of GDP is a truly astounding development.

What are Emerging Market economies?

Last week, my colleague Joe Perry identified the pair’s fresh record high on the back of geopolitical tensions and surging inflation, but the catalyst for the latest swoon in the lira is even more alarming. In a late-night decree on Thursday, Turkey’s President Recep Tayyip Erdogan dismissed several more of the central bank’s deputy governors, including the only one who opposed last month’s surprising interest rate cut.

In other words, traders’ fears that the nominally independent central bank is becoming hopelessly politicized are being realized, causing a widespread loss of confidence in the lira. According to central bank data, foreign investors held just $6B in government bonds at the halfway point of the year, down more than 90% from the $61.5B in Turkish bonds that foreign investors held as recently as 2013.

 

Trade USD/TRY now:  Login or open a new account!

 

Turning our attention to the chart, USD/TRY is working on its seventh consecutive daily gain after blasting through the 9.00 level last week. With prices at a fresh record high, there are no levels of previous resistance nearby, though the 161.8% Fibonacci extension of the 3-month pullback that started this time last year looms up near 9.60 as a logical next target for bulls. Beyond that, the psychologically-significant 10.00 level may come into play next.

 

Source: StoneX, TradingView

It is notable that the 14-day RSI indicator is above 80, at an area that has previous marked short-term peaks in the USD/TRY exchange rate. That said, the country’s economic and monetary policy outlook hasn’t been this precarious before, so rates could certainly continue to surge regardless of an overbought reading on a technical indicator.

The next hurdle for the beleaguered currency is another CBRT monetary policy meeting on Thursday. Based on last week’s actions and the recent price action, investors a bracing for another interest rate cut, further deterioration in the value of the lira, and continued inflation in the country.

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

 

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2025