close icon

USDTRY Drop Accelerates as Elliott Wave Predicted

The Turkish Lira hit its highest level against the U.S. dollar in six months. The country economic and legal reforms announced last year coupled with tighter monetary policy appear to be giving the desired effect. USDTRY is down 19.3% from its November 2020 high after being in an uptrend since mid-2008.

Most analyst, however, are surprised with how quickly the pair reacted to the political and monetary decisions. Elliott Wave analysis, on the other hand, actually helped us predict USDTRY’s decline. On August 30, 2020, we wrote that a bearish reversal should be expected as the pair was “set to complete a 12-year impulse pattern.” Then, on November 20th, with the reversal already in place, we posted the chart below as a short-term update.

USDTRY unfolds as Elliott Wave analysis predicted

Three months ago, USDTRY was trading around 7.6000. The decline from 8.58 looked like a complete five-wave impulse, labeled i-ii-iii-iv-v. Since every impulse is followed by a three-wave correction, we thought “a rally up to ~8.0000 makes sense in the short-term” before the downtrend can resume.

Not the Time to Bet Against USDTRY Bears

The pair reached 8.04 a few days later and has been in a downward spiral since. Today, it fell as low as 6.9129 and the bears seem firmly in control. Take a look at the updated chart below.

USDTRY bears remain in control as downtrend accelerates

Wave 2 developed as a simple a-b-c zigzag, where wave b was a triangle and wave c – a truncation. The following weakness must be part of wave 3. It seems USDTRY is now falling within wave iii of 3, whose length cannot be predicted. However, since waves i and iv cannot overlap, the bears remain in charge as long as 7.2400 holds. Besides, the big picture outlook suggest they might just be getting started.

Turkish Lira can keep falling towards the 5.0000 mark against the dollar

The 12-year uptrend from the bottom in 2008 seems to be over at 8.58. This means the current drop must be part of the corresponding three-wave retracement. Corrections usually erase the entire fifth wave. In the case of USDTRY, this translates into a decline to the 5.0000 mark or lower. If this analysis is correct, this is not the time to bet against the Lira.

Similar Elliott Wave setups occur in the stock, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Elliott Wave Support Can Send USDZAR 15% Higher

It’s been a bad year for USDZAR bulls. The pair has been declining ever since it reached a high of 19.34 in early-April 2020. As of this writing, it is barely holding above 14.30, down 26% in a little over twelve months. Does this mean now is a good time to join the bears? We…

Read More »

Ahead of EURUSD ‘s Disappointing Start to 2021

Overall, 2020 was a good year for EURUSD bulls. Despite the March crash during the coronavirus-related volatility, the pair ended the year up almost 9%. With more stimulus already in the pipeline at the start of 2021, it made sense to expect further devaluation of the dollar against the Euro. Alas, common sense doesn’t always…

Read More »

USDJPY Gains 450 Pips and Counting in Two Months

2020 wasn’t a good year for USDJPY bulls. Starting from 108.63 in January, the pair closed at 103.32 on December 31st, down 4.9% in twelve months. But what the dollar lost against the yen in the entire 2020 it is now close to recouping in less than three months. USDJPY is approaching 108.50 as of…

Read More »

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

USDTRY Heads South After Central Bank Decision

Turkey finally took a decisive step towards taming the double-digit inflation, which has been destroying the Lira’s value for years. The country’s central bank lifted the benchmark interest rate to 15%, up 475 basis points from its previous standing. USDTRY fell as low as 7.5031 earlier today, on track for a second consecutive week of…

Read More »

GBPNZD Can Slide to Sub-1.9000 In Coming Weeks

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out on Sunday! GBPNZD exceeded 2.0270 in mid-August, but the bulls could not keep the positive momentum. A month later, the pair fell to 1.9055, losing 6% in the process. And just when it…

Read More »

Ahead of EURUSD ‘s 280-pip Drop in September

EURUSD had been on a tear since mid-March when it bottomed out at 1.0636. Nearly six months later, on the first day of September, the pair exceeded the 1.2000 mark. The bulls seemed firmly in control and the Fed’s money printing suggested further losses ahead for the dollar. However, years of experience had taught us…

Read More »

More analyses