Potential signal:
- On a move above the 58 PHP level, I’d be a buyer of this pair, aiming for the 59 level again.
- I would put a stop loss just below the 200-Day EMA.
- I’ve noticed that the Philippine peso seems to be a bit of a now performer.
- That being said, a lot of this will have to do with news coming out of Japan that the central bank is not looking to raise interest rates in volatile market conditions.
- This has people looking to step out on the risk spectrum a bit, and of course the Philippines is considered to be a much riskier investment region than the United States.
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Technical Analysis
For what it is worth, the market looks as if it is trying to reach down toward the 57 PHP level. That’s an area that has been important more than once, and a certain amount of “market memory” should be found there. Between here and there, we also have the 200-Day EMA, which is an area that a lot of people will pay close attention to as well, as it is a major technical indicator used by trend traders. At this point, the market could very well bounce, but if it does, the market is likely to go looking to the 58 level first, followed by the 50-Day EMA, sitting right around the 50.40 level.
Ultimately, this has a lot to do with Asia and North America as well, as the risk spectrum will be quite wildly different in both areas. Quite frankly, a lot of people are starting to worry about the possibility of a recession in the United States, and that of course has a major influence on the US dollar in general. If we are going to in fact see a massive recession, then we could see the USD/PHP market turn right back around and rally. On the other hand, if the market were to break down below that crucial 57 level, we could see the US dollar really start to fall, perhaps reaching the 55.50 PHP level before you know it. In that type of mood, you probably have the US dollar losing strength against almost everything around the world.
The US dollar does tend to move in one direction overall, and therefore it’s likely that we will continue to see that being the case, especially in exotic currency such as the Philippine peso.
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