Trade Recommendation: EUR/PHP
The Euro/Philippine Peso pair started its uptrend in October 2002 when it took out resistance of 52. The price action triggered the rounding bottom reversal pattern on the monthly chart, which sparked a long bull run that saw the pair ascend to as high as 76.652 in December 2004. In two years, the Euro gained over 47% against the Philippine Peso.
At this point, the pair was in extreme overbought territory on the monthly chart. Trend followers took the chance to lock in gains. As sellers dominate the market, EUR/PHP dropped to 58.322 in February 2008. Bulls entered the buying scene and lifted the pair to 72.835 in July 2008.
With a lower high in place, the market became increasingly bearish. It snapped the 62 support in March 2010, which ignited a bear run that plunged the pair to as low as 46.42 in March 2015. Fortunately for buyers at this level, EUR/PHP has been rallying. It has even launched another uptrend.
Technical analysis show that the Euro/Philippine Peso pair has taken out resistance of 62 in January 2018 and triggered the large double bottom reversal pattern on the monthly chart. It went as high as 65.558 in February 2018, but it flashed overbought readings. The pair needs to correct and create a base above 62 to keep its uptrend sustainable.
The strategy is to buy on dips as close to 62 as possible. With recent price action, bulls are likely to hold on to support and crawl to our target of 72. The process may take more than a year.
Monthly Chart of EUR/PHP
Summary of Strategy
Buy: Buy on dips as close to 62 as possible.
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