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Friday, October 16, 2009

USDTRY update

The weekly chart on the left hand shows another penetration of the recent strong support. As the carry trade gets blown away with further agressive rate cuts the chances for a strong rebound are rising sharply. The Dollar shoud basically make a retracement trade the next weeks as markets in general will enter a correction. The USDTRY will be driven above the current resistance at 1.52 and test the 1.60 area which represents a 38% bounce but even 1.65 are likely. The problem is as the bigger picture shows for the Dollar we will see it drop to new lows against some major currencies in 2010 as for the EUR it needs to test the 1.60 level and make a new high even but I doubt the same will be true for the Turkisk Lira which is again 10% overvalued and the current market levels are far away from any reality speaking about the stocks. The next big move is to the 1.60-5 zone for the next 4 weeks from there we will have to take a fresh look as Turkeys stimulus packages have all run out and the next months should rather produce ugly numbers.

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