The EUR sank to its lowest against the USD in more than a year on Friday as a plunging TRY sparked broad risk aversion, with investors worried about a contagion effect on European banks.
Trump said he had authorized higher tariffs on imports from Turkey, imposing duties of 20% on aluminium and 50% on steel.
Those duties are double the level that Trump imposed in March on steel and aluminium imports from a range of countries. The White house said he had authorized the move under Section 232 of U.S. trade law, which allows for tariffs on national security grounds.
While Turkey and the United States are at odds over a host of issues, the most pressing disagreement has been over the detention of U.S. citizens in Turkey, notably Christian pastor Andrew Brunson who is on trial on terrorism charges. A delegation of Turkish officials held talks with counterparts in Washington this week but there was no breakthrough.
Waves from the crisis spread abroad, with investors selling off shares in European banks which have large exposure to the Turkish economy.
The lira sell-off has deepened concern particularly about whether over-indebted companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Erdogan.
This is how MyFXspot.com trades now:
EUR/USD
Trading strategy: Buy
Open: 1.1280
Target: -
Stop-loss: 1.1190
Recommended size: 1.67 mini lots per $10,000 in your account
Short analysis: Bear sentiment increases as the pair sets a new trend low after breaking 1.1500/10 support and the 50% Fibo of the 2017-18 rally. RSIs are biased down with no divergence. But the pair looks a little oversold now and a recovery move is likely soon. We have placed a bid at 1.1280.
GBP/USD
Trading strategy: Await signal
Open: -
Target: -
Stop-loss: -
Recommended size: -
Short analysis: GBP/USD bears registered a weekly close well below the major 1.2934 Fibo, a 50% retrace of the 1.1491 to 1.4377 (2016 to 2018) rise, substantially weakening the market structure and unmask a plethora of downside levels on the way to 1.2593 the 61.8% Fib of the same rise and 1.2589 the June 21 2017 low. We are looking to fade recovery attempts.
USD/JPY
Trading strategy: Sell
Open: 111.40
Target: -
Stop-loss: 112.40
Recommended size: 1.66 mini lots per $10,000 in your account
Short analysis: USD/JPY is on the verge of signaling a reversal of the uptrend since March with a break and close below the 55-DMA, 50% of the May-July rise and the July low at 110.75/65/58. These have been breached intraday, but need a close below them to trigger a sell. We keep our sell offer at 111.40.
USD/CAD
Trading strategy: Await signal
Open: -
Target: -
Stop-loss: -
Recommended size: -
Short analysis: USD/CAD powers higher on broad USD strength related to TRY selloff. Pair breaks above 55/21-DMA near 1.3100 eyes resistance by daily cloud top at 1.3177. above the daily cloud top (1.3177) July 19/20 double top by 1.3290 comes into sharper focus. We stand aside now.
AUD/USD
Trading strategy: Sell
Open: 0.7380
Target: -
Stop-loss: 0.7460
Recommended size: 1.88 mini lots per $10,000 in your account
Short analysis: Bear sentiment increases as the pair breaks below the bear pennant base and 61.8% Fibo of the 2016-18 rally and goes on to set new trend lows. RSIs are biased down with room to run. The slide has legs. An offer now sits at 0.7380 and the target will be the 0.7110/60 zone at a minimum once the short is established.
EUR/GBP
Trading strategy: Short
Open: 0.9010
Target: 0.8910
Stop-loss: 0.8970 (lowered from 0.9060)
Recommended size: 3.11 mini lots per $10,000 in your account
Short analysis: Pair's slide extends through the 23.6% Fibo of 0.8621-0.9030 and the 10-DMA. Daily RSI is biased down and has room to run after diverging on the recent new high. Bear sentiment is rising. The stop is lowered to 0.8970 and some profit is locked-in. The target remains 0.8910 for now.
Trading ideas by MyFXspot.com