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Alert - 10:55 (CET) - Dollar advanced 29% against Turkish Lira this month
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If the investors are worried about the effects of the global credit quake, withdrawing capital from EM countries to seek safe haven refuges, it would be expected that the Dollar would punish the Turkish Lira. As a consequence, the greenback has climbed 29% this month against this currency, being a perfect mirror image of the equities uncertainties.
The UsdTry is trading at 1.6328, ranging from 1.6125 and 1.6670. The current price is over yesterday's close at 1.5910. In the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are over the 200-day EMA.
The traders are watching the resistance from a few hours ago at 1.6670. If it's broken, they will target an extension to 1.7242 (June 2006 high) and 1.7500. If the waters calm down, with a possibility of profit taking, the supports will be watched at 1.5037 (October 21st low), 1.3897 (October 14th low) and 1.2637 (October low).
Last week, the pair fluctuated between 1.3668 and 1.5386. As the Bush administration is planning a second fiscal stimulus and the fact that Turkey has a financial sector with strong credit restrictions allowed the greenback to climb against the Lira.
Checking the hourly graphics again, the current price is over the 100.00% (1.7207) Fibonacci retracement lines. The volatility per hour could reach 800 pips and the 60-minute Relative Strenght Index (RSI) is at 74 points, after being even more overbought.
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