The USDTRY made an impressive wave 3 up to 1.74 and is now in wave 4 down to 1.45, which is a 50% retracement. Part of that move is the expected turn in EURUSD, which makes a wave 4 up to adding to the overall temp Dollar weakness. The end of wave 4 should come within a week. A new basic impulse may come from the elections in USA next week as Dems rather bring stronger Dollar times and Reps a weakening bias. In wave 5 up, we likely will see the USD trading up to the big handle 2.00 (Goldman claims the fair value at 2.04).
I rather say the real inflation in Turkey is in the upper 20's and in a weakening economic environment, that's the least the currency should devalue if their is no intrinsic strength. That is a yearly component, which needs to be aggregated on a 3 year average as Turkey enjoyed an artificial strength of its currency due to huge capital inflows which will partly reverse (it has already) - this is just an intuitive approach, but, on the other hand, all other approaches economists use with their pathetic models do not work anyway. It's more a matter of common sense but the technical picture does support that approach.
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