USD/PHP Forecast Today 01/08: Strong Peso Momentum (Video)

(MENAFN- Daily Forex)

• The U.S. dollar has fallen a bit against the Philippine peso during the trading session on Wednesday as we wait for the Federal Reserve decision.
• Quite frankly, this is a market that will more likely than not get a lot of volatility thrown into it due to the announcement as it is such a small currency pair.
  

U.S. dollar currently is sitting at the 50 day EMA and has been in an uptrend against the Philippine peso and I don't know that's going to change anytime soon. The market will continue to look at this through the prism of risk on risk off. And although Philippines has an interest rate of 6.5%, most traders probably won't look at the, let's just call it 1% differential, depending on what the Federal Reserve does, as something worth taking the risk on owning the peso over the greenback.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money

This uptrend has been brutal. When you look at this chart from a longer term perspective, it's easy to see that the area above is within reach. The 59 level is also an area that has been important. So when I look at this chart, I think of the area between 59 and 60 as a massive zone of resistance. But that doesn't mean that you should start shorting the market. The momentum is most certainly to the upside. And if we do start to see a global slowdown, the Philippines will not be a place money runs to.

Be cautious if you can trade this pair

This is a pair that you should only be buying the US dollar in, because the economic situation does not favor a lot of risk taking, especially in a very small Asian economy like the Philippines. Because of this, I think you've got a situation where it's a one way trade, and if we fall enough, you could make quite a bit of profit from the swing higher. If the pair breaks above the 60 PHP level, that could send this chart to the stratosphere, as the Philippine central bank will only have so much firepower to turn the around.

Ready to trade our daily Forex analysis? We've made this forex brokers list for you to check out.

MENAFN01082024000131011023ID1108507506