US Dollar Index and EUR/PHP 4-1-2011

e
First of all, I want to congratulate the Philippine Composite Index ^PSE/^PSI for Yahoo! and $PSEI for some institions for breaking out of the 5 month downtrend channel last Tuesday (March 29th). Breaking out of that 4000 level was one big thing, see you in 4200 resistance with light correction, and hopefull to our 52week high of 4400. :)

And as for currency traders, I have attached above the Monthly Chart of US Dollar index, eversince the ASIA or EMEA became competitors of the U.S., its currency was on a very long term downtrend channel. In our charts, the downtrend line was since 1985 to current, which indicates the very strong downtrend line. This US Dollar index is widely used in Currency trading, especially the #1 competitor, EURO $. Other affected currencies are GBP, JPY, AUD.
But for Philippine Peso, it doesnt affect much.

So lets dig in into the short term projection, US DOllar index is now cliff hanging into its immediate support 76, failure to hold means another set of lost of value for USD and gaining momentum of EUR. Placing my bets, 80% I think, we will sustain that level and bounce into near 80. Which my estimate for EUR/PHP is around 57-58 in few months. Currently, EUR/PHP conversion is 61.5. Failure to hold down into the 76 support means instant downward mementum to 70 (in my current computation, that's an instant jump to 65 pesos per Euro).On my part, I am still expecting the USD Currency to appreciate to near 90 or 100 in 3-5 years, which is around 46-50 in EUR/PHP Conversion (my estimate is based from USD/PHP MUST be around 40). That's a cheap weakening of EUR in long term, which is really benificial for Louis Vuitton lovers to buy their bags fresh from Euro Zone. Short term, the EUR is still involved into going up as EURO equities are in BUll Market, So wait for the appreciation of USD and depreciation of EUR before diving into its currency -if you can wait for the years time (long term).



Charts belong to their respective owners, is used for presentation use only.
Currency is the hardest tradable entity around the world for me, as it takes a lot of measurement, GDP variation, Country vs Country currency basis, Current Equity status of each country, so exact value might not be as accurate as possible.