Kyrgyzstani Som (KGS) in the times of political instability
USD is in a strong uptrend. The price is being held on an artificial resistance level at 69.8250 (Red line).
We may see an Ascending Triangle which is a strong bullish pattern. The price shall beak out in the direction of the bullish trend around October 2020 (Subject to the National Bank of the Kyrgyz Republic interventions adjustment).
Multiple swings of the price have been at the same resistance level since May 2016, which leads us to a stronger eventual breakout.
A strong eventual breakout is confirmed by a period of low volatility as shown by a Bollinger Bands' squeeze (Two arrows). Periods of low volatility eventually end up by a price breakout in the direction of a trend.
The price has to break out of the Ascending Triangle in October 2020. It either breaks out from the triangle upwards (Natural way) or keeps going sideways slowly going out of a bullish trend line downwards (NBKR way). Keeping the price on that resistance level is going to cost NBKR a lot.
In October 2020 there will be major Parliamentarian elections in Kyrgyzstan, several months after the elections have the potential of being unstable, so NBKR will continue to maintain the support line on the same level, however, starting from 2021 it has to release the tension.
I think NBKR will continue interventions not to keep the price at the 69.8250 resistance level, but rather at lowest levels possible, which means the following price range:
- 70 to 74 in 2021;
- 75 to 79 in 2022.
If we see political unrest after the 2020 elections, NBKR may continue to hold the line even at cost of spending all sovereign reserves to give some time for the regime to finish its business in the country.
We may see an Ascending Triangle which is a strong bullish pattern. The price shall beak out in the direction of the bullish trend around October 2020 (Subject to the National Bank of the Kyrgyz Republic interventions adjustment).
Multiple swings of the price have been at the same resistance level since May 2016, which leads us to a stronger eventual breakout.
A strong eventual breakout is confirmed by a period of low volatility as shown by a Bollinger Bands' squeeze (Two arrows). Periods of low volatility eventually end up by a price breakout in the direction of a trend.
The price has to break out of the Ascending Triangle in October 2020. It either breaks out from the triangle upwards (Natural way) or keeps going sideways slowly going out of a bullish trend line downwards (NBKR way). Keeping the price on that resistance level is going to cost NBKR a lot.
In October 2020 there will be major Parliamentarian elections in Kyrgyzstan, several months after the elections have the potential of being unstable, so NBKR will continue to maintain the support line on the same level, however, starting from 2021 it has to release the tension.
I think NBKR will continue interventions not to keep the price at the 69.8250 resistance level, but rather at lowest levels possible, which means the following price range:
- 70 to 74 in 2021;
- 75 to 79 in 2022.
If we see political unrest after the 2020 elections, NBKR may continue to hold the line even at cost of spending all sovereign reserves to give some time for the regime to finish its business in the country.