Potential signal:
- I am a buyer of this pair if we can break above Monday’s session high of PHP 58.35.
- I would have a stop loss at the PHP 58 level, with a potential target near the PHP 59 level.
The US dollar went back and forth during Monday’s trading session as we continue to see a lot of bullish behavior. All things being equal, this is a market that I think is going to be a big move or, and the fact that we formed the wild looking candlestick that we did for Monday tells me how confused the market is right now.
Technical Analysis
Note that the US Dollar has reversed at the 50-day EMA, but if we were to break above the top of the candlestick for Monday’s session, I think that almost certainly opens up the possibility for the pair to go to the PHP 59 level. Below, we have the PHP level of 57.75, which has offered a little support of late, and you might even squint and see a little “double bottom” in that region. Below, we also have the 200 Day EMA, which of course offers plenty of technical support anyway.
As we are between the 50-day EMA and the 200-day EMA indicator, the reality is that the market in these regions is usually very volatile and volatile. The candlestick range is quite impressive, but you also have to remember that just a few weeks ago we broke down from the PHP 59 level. In other words, if we want to turn things around, it may take a lot of effort. You’ll also need to pay close attention to the US dollar against most emerging market currencies, as they all tend to move in the same direction. For what it’s worth, most of Asia is starting to slow down, which has a big impact on the Philippines as well.
At this point, I think we’re in the process of trying to form some sort of bottom pattern, but these tend to be very noisy moves, so you have to be careful with your position size and make sure you’re not overexposed.
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