To my surprise, for about one month, euro was falling when traded with Turkish lira. In theory that means that Europe is currently, in short term, in worse position than Turkey. * Of course, I had to consider multiple factors, one of which is an ongoing war in Ukraine. After the mild shock, I checked the longer-term outlook of this currency pair and quickly noticed that on long term there is an uptrend.[1] After doing some quick technical analysis, I figured that we are now on big support line. If the price will break below the current at 19,997 there could be a further downfall to another big support at around 19,801. [2] However, the current support line holds the price under control well, as it has been around this value for the past few days. *
I moved on to the fundamental analysis and checked the current situation in both economic areas. Turkey is fighting an enormous inflation, as well as damages from earthquakes. On the other hand, Europe is financially helping Ukraine in the war despite it has one of the highest inflation for the past few decades. I remembered that ECB promised another rate hikes, which would strengthen the currency. I also saw that currently there are G20 meetings, which usually have impact on all currencies, however I can expect or predict that the most it will be on the USD and EUR, as they are two of the strongest currencies. [3] Taking all the things into account – interest rate hikes, earthquakes, war etc., I have decided to open a position of EURTRY long. As always, I have doublechecked my predictions with indicators on Investing, and once again they confirmed my suspicion. Short term for EURTRY is short, as it is in falling trend for the past few days. * However, long-term outlook seems to be long. I didn’t hesitate and went to open the EURTRY long. However, I will keep my eye on it as TRY is rather volatile currency.
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* Past performance is no guarantee of future results.
[1,2,3] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.
Link to 5 year chart: https://www.investing.com/currencies/eur-try