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USD/PHP Forecast: US Dollar Rallies Against Philippine Peso

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • Dear my daily analysis of exotic currency pairs, the USD/PHP currency pair has caught my attention as it shows just how strong the US dollar is trying to become.
  • We rallied rather significantly to break above the 56.20 PHP level, and now it looks like we are trying to do everything we can to rally rather significantly and go looking to the upside.

USD/PHP Forecast Today - 02/10: Dollar Rallies (Chart)

Keep in mind that the Philippine peso has benefited from the idea that the Philippine economy sees much more growth than the United States, and of course we have the Federal Reserve cutting interest rates drastically. This of course is very negative for the US dollar in general, so therefore I think you’ve got a situation where we continue to see a lot of US dollar weakness.

While this has been a very negative turn of events, the reality is that the pair is heavily influenced by global growth, and therefore I think you’ve got a situation where traders will have to continue to look at this through the prism of whether or not the market is likely to rush into exotic locales such as the Philippines, or if they are going to step away and put more of their money into the US Treasury markets.

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Technical Analysis

The technical analysis for this pair is still rather negative, and we are pressuring a major potential resistance barrier. I think that barrier centers around the 56.50 PHP level, where we also have the 50 Day EMA approaching. If we were to break above that level, then it would be very bullish for the US dollar, and in this environment, I would imagine that we probably have a lot of the emerging markets base currencies getting crushed. Keep in mind that the market participants continue to look at this through the prism of whether or not they are willing to put risk on, so I would be very cautious about putting too much money into this pair.

On the other hand, if we serve falling again that would be more or less a “risk on” scenario, and it would suggest that perhaps a lot of riskier assets would continue to gain in value, not just the Philippine peso itself.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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