- The US dollar initially tried to rally, we have since seen this asset pull back a bit, but that makes a certain amount of sense considering that we are essentially “swimming upstream.”
- As this is the case, even if we are in the midst of some type of trend change, it’s not necessarily going to be a straight shot to the upside.
After all, the Philippines has seen extraordinary growth over the last year, well over 6%, while the United States is getting ready to see interest rate cuts coming out of the Federal Reserve. That being said, there are a lot of concerns about the global markets and the global economies, and that can have a major influence on some of these emerging markets as well. This is one of the situations where the Philippines may be outperforming now, but down the road it’s very likely that we will see people running toward the US dollar due to the fact that the Treasury market will suddenly become a place where people throw money again.
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Technical Analysis
It’s worth noting that the daily candlestick is looking a lot like a shooting star, and of course we had not been able to reach the 57 PHP level. Just above that 57 level, we have the 200-Day EMA, and the 50-Day EMA racing toward the 200-Day EMA, trying to cross inform the so-called “death cross.” That is an indicator that is typically late, so don’t read too much into it but I recognize that there is a lot of noise above.
That being said, the massive candlestick that we saw during the trading session on Monday does suggest that perhaps there is a certain amount of concern out there, and it’s likely that we could continue to go higher. It’s also worth noting that the Relative Strength Index has crossed into the normal range again, which had been in a major oversold condition. In other words, we may be in the middle of a bottoming pattern, but it’s a little early to call that.
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