2019-11-11 • Updated
The wave of ups and downs in the Forex market did not bypass the exotic currencies in 2018. Let’s look at how analysts predict the performance of those ones, which suffered the most during 2018 - the Brazilian real and Turkish lira.
Brazilian Real (The BRL)
The election of Jair Messias Bolsonaro as a new president of Brazil was warmly welcomed by the market. His speeches raised hope to deal with corruption and long-lasted uncertainties in the country. As a result, GDP growth expectations for 2019 started to increase. For example, the World Bank sees the GDP for Brazil to increase by 2.5% and the International Monetary Fund (IMF) expects the economic growth of Brazil to advance by 2.4%. This is a significant level compared to the forecasts for 2018 when GDP growth was projected to increase only by 1.2%.
For now, the main focus for investors and traders remain on the fiscal reforms by the new government. In particular, Mr. Bolsonaro promised lower deficits, shrinking public debts and lower interest rates. If the new government, which will be inaugurated on February 1, succeed with the reforms, the Brazilian currency will be supported.
If we look at the monthly chart of USD/BRL, we can see that the pair has been trading sideways since the last June. If the fiscal reforms are conducted, the pair will fall to the support at 3.69. If this level is broken, the next support is placed at 3.4289. On the other hand, if the government fails to bring the positive momentum to the BRL, bulls will push the pair above the resistance at 3.9461. The next resistance is placed at 4.2159. From the technical side, the downtrend for the pair has already started, which is confirmed by Parabolic SAR. This means that the BRL may continue to strengthen.
Turkish lira (the TRY)
According to analysts, the Turkish lira will depreciate against the USD. There are several risks which may trigger this situation. At first, the macroeconomic situation of the country is still unstable due to the negative balance sheet. This fact may result in the government to apply different mechanisms in supporting the economy, including the quantitative easing program. Such a move will make the TRY weaker. For now, it has been held at 24%. Analysts anticipate a rate cut to at least 15% by the end of 2019.
In addition, let’s not forget about the geo-politics tensions and the risk-off sentiment in the global market due to the US policy and trade uncertainties. These factors may also pull the Turkish lira down.
On the monthly chart, Parabolic SAR shows an uptrend for the pair. If the lira continues to weaken the pair will rise to the resistance at 5.6990. If the Turkish government provides measures to support the TRY, the pair will fall towards the support at 5.1220. The next support is placed at 3.7130
Conclusion
Despite all the negative factors which keep affecting the performance of the TRY and the BRL, the further movements of the currencies depend on the governments’ measures of both of the countries. That is why we need to follow the news more attentively for more accurate forecasts.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
