Turkish Rate Decision-min

Turkish Rate Decision

In Trade Plans by CathyLeave a Comment

  1. What Does The Data Mean To The Market?
  2. Historic Deviations And Outcome
  3. Trade Plan
  4. Tradable Pairs

1.
What Does The Data Mean To The Market?

The Central Bank of the Republic of Turkey’s (CBRT) Monetary Policy Committee votes on setting the overnight interest rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the TRY (Turkish Lira), while a lower than expected rate is negative/bearish.

2.
Historic Deviations And Outcome

September 23 2021 –

Today we got the type of trade I live for, a surprise cut to the Turkish interest rate.

With only one out of twenty-three economists predicting a change to the rate, the forecast was to remain at 19%. Last time we saw a shock move of more than 0.5% we saw 900 pips immediately after.

Today, I’m delighted to say we saw the same again a shock cut to 18 % and over a 1000 pips banked.

Check out the price action here (Click the image to see the full chart):

Turkish-Rate-Decision-chart1-min
March 18 2021 –

Today we saw a +1.0 positive deviation from the forecast, which gave a nice move of 750 pips in the first minute, then great continuation afterwards, too!

Check out the price action here (Click the image to see the full chart):

December 24 2020 –

Today we saw a +0.5 positive deviation from the forecast, which gave 475 pips in one minute. Brilliant.

Check out the price action here (Click the image to see the full chart):

3.
Trade Plan

I will use forecasts of:

Benchmark Rate 17.00

With some political interference from Turkeys President Erdogan dismissing three of the monetary policymakers at Turkeys Central Bank, it is strongly believed this was a deliberate move to ensure another rate cut today to boost credits and exports. Although such interference is widely frowned upon, I’m interested in how much they will cut by how the market will react as the Lira is already at an all-time low.

We have varying estimates for a cut today between 17.0% and 17.5%, but I’ll take the lower end forecasts, and I’ll take a buy or sell on 1.0 on either side of this.

  • If it remains at 18%, I’ll take a buy
  • If they cut to 16%, I’ll take a sell

If this hits, I’ll be looking to bank somewhere in the region of 800 – 1000 pips, but I’ll not hang around as I expect some volatility under the circumstances.

4.
Tradable Pairs

  • EURTRY
  • USDTRY

Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Another shock to the markets today was when the highly anticipated cut to the Turkish interest didn’t happen; the markets quickly revalued the Turkish Lira’s value.

We saw a whopping 2000 pips in a few seconds: what a lovely move, a great trade.

See the video here:

https://youtu.be/u0RuBKpydfk

Hi, I’m James, born in 1979 and grew up with a strong interest in IT and business. My first career was in IT support, which lasted 12 years before selling my company in 2009. I decided to move abroad and do something new! Forex caught my eye. I did the typical rookie thing of opening a real account, depositing far too much of my savings, and lost a small fortune. Although this experience was very negative at the time, it taught me some tough lessons that I still benefit from today. News events caught my eye; the patterns in the charts they created were repetitive and often predictable. I knew that if I could understand them more, I could make accurate predictions about how they would move. So I spent much time developing my trading method around thousands of hours of research and data. Now many years of trading around news events have earned me a good income, one that I’m sure others can benefit from.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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