- The US dollar initially tried to rally a bit against the Philippine peso during the trading session on Wednesday, but you can see we continue to soften.
- You have to ask the question as to whether or not the continuation of consolidation is the next move, or do we break down?
- Over the last two or three months we've been bouncing around roughly 59 above and 57.75 below.
- What I find interesting about the 57.50 level below is that between here and there we have the 57.75 level, which has offered support, but we also have the 200 day EMA.
The Next Couple of Days
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So, I think we need to watch how this plays out over the next couple of days. While I don't necessarily like the idea of shorting the US dollar, it is worth noting that the Philippine peso is a much smaller currency pair, and therefore it will take a lot less to get things going in one direction or the other. On a bounce at this point, I think I'd be a buyer for short term range bound trade, but I don't know that we're going anywhere longer term, at least not yet. If we did break above the 59.15 level, then we could see the US dollar really take off against the Philippine peso.
But right now, it looks like we are happy with sideways action. If we break down below the 57.50 level that I mentioned previously, I think we drop another leg lower initially targeting 57 and then eventually going down to 56.50. In general, this is a market that I think continues to be very noisy, but I also recognize that there is a little bit of support just below, so I'm not really willing to jump in right away.
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