Philippine Peso, USD/PHP, Malaysian Ringgit, USD/MYR – Talking Points
- US Dollar extended losses against the Philippine Peso and Malaysian Ringgit
- USD/PHP could be attempting a reversal of the dominant uptrend from 2013
- USD/MYR slipping under rising support from 2014, more losses may be ahead
Trade all the major global economic data live as it populates in the economic calendar and follow live coverage for key events listed in the DailyFX Webinars. We’d love to have you along.
Philippine PesoTechnical Outlook
As anticipated, the Philippine Peso continued its advance against the US Dollar since the middle of last week. This further pushed USD/PHP under the long-term rising trend line from 2013 – pictured on the weekly chart below. The fundamental backdrop behind this move has been rising hopes of a US-China trade deal, which have fueled capital flows into Emerging Market and ASEAN nations.
Such a catalyst could be key to sustaining what could be a reversal of the dominant uptrend that has prevailed for over six years. Yet, there is still potential for an upside reversal. USD/PHP has been slowly descending within a falling channel – blue area below. A test of the floor could spark a rise to the ceiling and the rising trend line. Otherwise, resuming declines opens the door to testing lows from the previous 2 years.
For more ASEAN content, check out my Singapore Dollar and Indonesian Rupiah technical outlook!
USD/PHP Weekly Chart
Zooming in on the USD/PHP daily chart, prices have formed a potential bottom at 50.40 which sits just under the 78.6 percent Fibonacci extension. A daily closer lower exposes 49.98. For a near-term reversal, keep an eye on the falling trend line from late September – pink line below. A daily close above it could open the door to testing highs from October 25 (51.29 – 51.34).
USD/PHP Daily Chart
Malaysian Ringgit Technical Outlook
Like the Philippine Peso, the Malaysian Ringgit is also focusing on a key trendline break versus the US Dollar. Looking at the USD/MYR weekly chart, the currency pair is on the verge of taking out a rising support channel from 2014. Further downside closes could signify a reversal to come of the dominant uptrend that has prevailed for over 5 years.
USD/MYR Weekly Chart
Looking at the USD/MYR daily chart, the Malaysian Ringgit closed under a near-term rising support line from March. This followed persistent consolidation for the past roughly two months. Prices have also found a bottom at 4.1290 with near-term resistance at 4.1448. A daily close under the former could open the door for revisiting July lows where support could stand at 4.1070.
In the medium-term, a descending channel could keep the downtrend from late August intact. I have marked this psychological barrier as the pink parallel falling trend lines on the chart below. Closing above this channel could pave the way for a retest of the key range between 4.1950 – 4.2000.
USD/MYR Daily Chart
FX Trading Resources
— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter