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MENAFN- Daily Forex)
During my daily analysis of exotic currency pairs, the USD/PHP currency pair continues to pop up on my radar. This is because this is one of the few places that the US dollar is getting absolutely crushed. Because of this, it tells me that perhaps we had gotten far too ahead of ourselves, as we had rallied from 55.50 PHP all the way up to the 59 PHP level in just a few weeks.
That being said, the market is likely to continue to have to work off some of that excess froth. The question at this point in time is going to be whether or not the market can find some type of floor or are we going to have a complete“round-trip.”
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Pretty much on any timeline and on in the realm of reality, the market is likely to continue to see questions as to whether or not the momentum can keep up in either direction. While we shot straight up in the air previously, the sharp pullback makes a certain amount of sense. Because of this, I'm not overly worried about the US dollar, especially as I look around the world and see how strong it is. However, that doesn't necessarily mean that I'm willing to jump in and start buying.
We are currently halfway between the 50 Day EMA and the 200 Day EMA indicators, and generally this is an area where you see quite a bit of action. If we can recapture the 50 Day EMA, then I suspect that buyers will come in and try to pick up the greenback, which could be driven by the Non-Farm Payroll announcement coming out on Friday. With this being the case, I think the market is likely to continue to see a lot of back and forth, but if we were to break down below the 200 Day EMA, then the 57 PHP level is going to be a major floor, and if we can break down below there, then the market is likely to go looking to make that“round-trip” that I suggested earlier. While the greenback is strong elsewhere, this is an interesting pair to watch.
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