Collecting Rollover while the TRY RangesThe CBRT has raised rates from 8.5% in June 2023 to currently standing at 50%. There was a recent CBRT meeting where rates where held at 50%. There has been a roll coaster for inflation YoY which was below 20% in 2020, rose as high as 36% in 2021, pushed up to 85.50% in 2022, dropped in 2023 to around 38% at its lowest, then pushed higher to standing at 69.8% currently. It is projected that inflation will push above the 70% lvl this year and eventually cap out and start pushing lower. The Lira is being hit hard and has lost over 80% of its value over five years due to the unorthodox method the President implemented.
But with this said, there are things going for the TRY, which is a nice carry trade (I'm in it to win it...corny (yeah I know)), with around an 18%-27% annualized gain (fluctuates), this could be some serious gains (and price has been ranging, so that is good). With the FED potentially go to lower rates in September and with the CBRT having rates at 50%, this could cause the TRY to either keep ranging or eventually push lower. But the CBRT might have to raise rates higher in order to fight inflation that is almost 20% higher than its interest rate. This makes the 30 lvl seem that much more plausible to be hit. Additionally, price is trading towards the 32 lvl and has attempted to trade below the 30 lvl a couple of times. So another hit to the 30 lvl support could potentially push it to my price target of around 27 (mean while I'll be able to collect some rollover). A standard lot holding this pair could bring in around $49 a day (depending on the rate for that day) which is a decent amount. The margin requirement for this pair, at least with my broker is 1:4, which means this pair is highly volatile and risky.
This pair can move thousands of pips in a matter of seconds and the spreads are sometimes outrageous. But, around a 1.2 micro lot would be less than $375 in margin, each pip would be a $0.01 move, and rollover per day earned would be around $0.56 a day.
The is a good chance that price will stay were it is at and push lower. The 33-35 lvl is the cap, but for price to push as high as 35, there would have to some strong catalysts to make that happen. I think this is all a self-fulling prophecy with all waiting to see when the FED will make its move. For now, the plan is to keep building in this pair, collect rollover, and wait until at least the 30 lvl is hit to make another decision on whether I want to see it play through to the 27 lvl.
