This week has seen the USD/Turkish Lira exchange rate drop from a high of 18.25 TL per Dollar to a close at 11 TL per Dollar. In my previous idea published in January 2021. The concepts I laid out in that idea are still valid. The curve I drew still holds intact. RSI is still rising in the parallel channel. The recent spike has seen RSI reach even higher value than ever before. I still hold that this trend will continue until 2026 where the exchange rate will be 18 TL for the Dollar; and I'm talking about the normal stable every day rate, not a temporary spike like in the past month.
Another thing to notice is the volatility.
The previous spike in January 2017 reached a high that is 30% above my curve.
The spike in September 2018 reached a high 71% above the curve,
and lastly, the December 2021 spike reached a high 104% above the curve.
As we go further in this trend, the spikes will be more volatile and we could see the rate triple in a matter of weeks, only to come back down the following week. This instability severely disturbs daily transactions both domestic and international which will push foreign investors away from Turkey. Already many investors are prepared to slowly pull out their capital as they say this instability occur right at the time of closing the books at the end of the year. Turks are already pricing their goods in Dollar and Euro having little confidence in the value of the TL. These factors will only worsen the situation in the coming years, and their effect is not seen immediately, but over months and years. Without a fundamental policy change, this trend will continue. Trust in the Turkish Central Bank is dropping as hard as the currency is.
Throughout 2020, The Turkish government has been the biggest buyer of gold in the world, but they have been also the biggest seller of gold in the same year. The Central Bank is confused as is actually trading gold like an uncertain irresponsible child. The responsible thing to do is to peg the currency to either the Dollar, the Euro, Gold or even better, Bitcoin. It will cause a shock, but it will also bring security, stability and prosperity in less than a decade.
dude I don't think TRY can't handle itself in next two month,18 TL in 2026!!! that's not make any sense, you didn't mention many things, economy crisis is more than before in Europe, we will see TRY up to 20 in next months very easily, we will see price just continue a head to the top 18 TL with small candles or a full body candle then hit new HH up to 20 in next months, if quarantine will start in Turkey then economy crisis will be more than before....
TechNerdOmar
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@rTrader_official, I hear you dude but what you are doing is mere speculation. It is more complicated than that. I have a curve that’s been holding for the past 10 years. The base of the curve is at 18 TL by 2026. So price will be at least 18 TL when it’s stable. What happened recently is temporary instability.
rTrader_official
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@TechNerdOmar, dude stable analysis just work when world economy is normal not in crisis, soon or later Turkey will join quarantine like other countries, it was just a instability because of Turkey is on economy crisis,Technically bearish full body on weekly or monthly chart will recover soon with small bullish candles, you can see so many instance in EUR/USD or other currencies it was just a instability because of Turkey is on economy crisis, Technically Bearish full body on weekly or monthly chart will recover soon with small bullish candles, you can see so many instance in other currencies
TechNerdOmar
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@rTrader_official, I’m trying hard to comprehend a single statement.
rTrader_official
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@TechNerdOmar, of course you can't understand :D USD/TRY 10% growth in a day and you still waiting TRY hit the top 18 in 2026, man you are in sleep
TechNerdOmar
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@rTrader_official, OK. I'd say let's just wait and see. But you really haven't made a prediction or a statement that I can hold you to. Clarify your statements before you post again please.
JoeChampion
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Awesome work, thanks for sharing! merry christmas!
MJ-Account
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Thank you Omar for sharing your thoughts. It's truly appreciated! I think pegging to Gold is the only proven approach in my opinion that could work in the near future since it worked in the past. The USD is becoming a liability, it is holding its ground because it is the world reserve currency and countries are forced to used it for import and exports of Oil, Gas and other commodities. Most countries holding US treasury bonds are not happy right now. The Fed is artificially keeping the interest rate low and therefore hurting all the countries who trusted the US in the past with their money. In addition to that, the Fed is following MMT and printing money to pay bills. Which is absolutely crazy! This is a complex subject that many economists don't agree on. For the Bitcoin, I remain skeptical whether it can become the world currency since it's backed by nothing but the trust that people put into it. I like it as a digital asset to speculate on but i am not yet sold on the idea of using Bitcoin as a currency despite the fact that BTC is scarce. There could be a correction coming to bitcoin up to 70% based on historical data. Would any strong economy based on exports like Turkey want to hold BTC as a reserve when it corrects itself ? Trust me, I would love to see bitcoin used as a world currency but It has to be pegged to something like Gold or a Basket of Gold and other scarce assets that have some intrinsic value. I am more comfortable with this proposition. It's just my opinion and my apologies for the long comment.
TechNerdOmar
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@MJ-Account, Your long comment is appreciated. I agree with you that the volatility of Bitcoin makes it hard to adopt. But it is almost on par with the volatility of Turkey's own currency. Regardless, a basket of gold and 15% or less Bitcoin makes more sense. You are absolutely right about the USD, but countries who are not satisfied with the Fed's policies can do little to get unstuck from the world's reserve currency. The Bretton Woods agreement and the US military domination of the world's maritime trade ensure that the USD remains the world's reserve currency. Read Sea Power by James Stavridis. In recent events, you can see how the US is reacting aggressively to Russia and China merely talking about ditching the USD in how they settle trades between them. And bear in mind these are two countries with neighbouring borders that have the power of doing that. So if Russia and China are having trouble ditching the USD, imagine Turkey.
If you read Confessions of an Economic Hitman and its sequel book by John Perkins, you realize how hard it is for third-world countries to get out of US debt. And all this debt is denominated in USD, so the demand on the Dollar remains strong. The move you mentioned by the Fed allows the US to devalue the national debt while maintaining foregin debt because, in simple words, the newly printed Dollars remain inside the US. This move allows the US to indirectly *tax* the entire world.
Another difficulty facing Turkey pegging their currency to gold is the power struggle. The self-proclaimed Sultan/Head of Central Bank would lose power. It is important to realize that a central bank printing money is a form of taxing the people as Dominic Frisby points out in his book "Daylight Roberry". Declaring a gold standard or any sort of peg means that no more unbacked printing is allowed and thus no more indirect taxation and no more manipulating the interest rates, and on top of all, it means complete transparency regarding the amount of TL in circulation and the amount of gold in the hazine. With so much corruption, the rulling party in Turkey would never disclose any of this. Sad but true.
Regarding Bitcoin replacing the gold standard, I recommend the Bitcoin Standard by the economist Seifiddin Ammous.
MJ-Account
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@TechNerdOmar, Thank you so much for your reply brother