Created on January 07, 2025

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Potential signal:

• I am a buyer of this pair if we can break above the high of the session on Monday, at the 58.35 PHP level.
• I would have a stop loss at the 58 PHP level, with a potential target near the 59 PHP level.

The US dollar has gone back and forth during the course of the trading session on Monday, as we continue to see a lot of noisy behavior. All things being equal, this is a market that I think is going to be a huge move or, and the fact that we have formed the wild -looking candlestick that we did for Monday tells me just how confused the market is at the moment.

Technical Analysis

Keep in mind that the US dollar did get turned around at the 50 Day EMA, but if we were to break above the top of the candlestick for the Monday session, I think that almost certainly opens up the possibility of this pair going to the 59 PHP level. Underneath, we have the 57.75 PHP level, which has offered a bit of support as of late, and you could even squint and see a little bit of a “double bottom” in that region. Underneath there, we also have the 200 Day EMA, which of course offers a lot of technical support anyway.

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As we are between the 50 Day EMA and the 200 Day EMA indicators, the reality is that typically the market is very volatile and choppy in these regions. The range of the candlestick is rather impressive, but you also have to keep in mind that just a couple of weeks ago, we plummeted from the 59 PHP level. In other words, if we are going to turn things around, it might take quite a bit of effort. You will also have to pay close attention to the US dollar against most emerging market currencies, as they all tend to move in the same general direction. For what it is worth, most of Asia is starting to slow down, that has a major influence on the Philippines as well.

At this point, I think we are in the process of trying to form some type of bottoming pattern, but these tend to be very noisy moves, so therefore you do need to be cautious with your position sizing, and make sure that you are not overexposed.

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