PHP: Higher, Bucking Broader USD Trend, Monday Saw Largest Daily Net Equity Inflow Since 2021
USD/PHP has backed away from late July highs. Spot sits in the 54.70/75 region currently, +0.30% firmer in PHP terms so far today. This is impressive given broadly stronger USD trends elsewhere. Recent highs in spot USD/PHP come in around the 54.90 region, which is also close to the 20-day EMA. Mid July lows in the pair were back near 54.30.
- One factor potentially boosting the PHP today is carry over from yesterday's chunky +$270.1mn net equity inflow. This was the largest daily inflow going back to late 2021.
- Local equities are higher today, the PCOMP +0.50% and tracking higher for the first time in 4 sessions. Late yesterday the BSP stated July inflation likely eased further to between 4.1% to 4.9% (from the June pace of 5.4%). Note this data prints on August 4, this Friday (market consensus is +4.9% y/y).
- Local banks and builders have risen today in the equity space, seen benefiting from a further pull back in inflation pressures.
- The July PMI for the Philippines also printed earlier, rising to 51.9 from 50.9 in June. We remain comfortably below 2022 highs for the headline index, but no further deterioration will be welcome from a growth outlook perspective.
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Historical bullets
USDCAD TECHS: Corrective Cycle Still In Play
- RES 4: 1.3427 High Jun 7
- RES 3: 1.3382 50-day EMA
- RES 2: 1.3355 High Jun 15
- RES 1: 1.3280/86 20-day EMA / High Jun 29
- PRICE: 1.3235 @ 16:15 BST Jun 30
- SUP 1: 1.3190/3117 Low Jun 28 / 27 and key support
- SUP 2: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 3: 1.2992 50.0% retracement of the Jun - Oct 2022 bull rally
- SUP 4: 1.2954 Low Sep 13 2022
Demand for buying on dips helped USDCAD recover from an intraday pullback on Friday, prompting the pair to hold the week’s gains. Nonetheless, the latest recovery is considered corrective and the trend outlook remains bearish. Moving average studies are in a bear-mode position, highlighting a downtrend. A resumption of weakness would open 1.2992, a Fibonacci retracement. On the upside, firm resistance is seen at 1.3280, the 20-day EMA. Clearance of this level would expose the 50-day EMA, at 1.3382.
AUDUSD TECHS: Bearish Extension
- RES 4: 0.6921 High Feb 20
- RES 3: 0.6857/6900 High Jun 20 / 16 and key resistance
- RES 2: 0.6701/6806 20-day EMA / High Jun 27
- RES 1: 0.6665 Low Jun 30
- PRICE: 0.6659 @ 15:53 BST Jun 30
- SUP 1: 0.6596 Low June 29
- SUP 2: 0.6579 Low Jun 5
- SUP 3: 0.6562 76.4% retracement of the May 31 - Jun 16 rally
- SUP 4: 0.6485 Low Jun 1
Despite a modest bounce Friday, the overarching outlook for AUDUSD remains soft following recent weakness and the extension of the reversal that started Jun 16. The downleg has resulted in a break of the 20- and 50-day EMAs, suggesting scope for a deeper retracement. 0.6627, 61.8% of the May 31 - Jun 16 rally, has also been cleared and this opens 0.6562 next, the 76.4% retracement point. Key resistance is 0.6900, the Jun 16 high. Initial firm resistance is at 0.6701, the 20-day EMA.
EURJPY TECHS: Maintains A Bullish Tone
- RES 4: 159.92 2.236 proj of the May 11 - 29 - 31 price swing
- RES 3: 159.09 2.0% 10-dma envelope
- RES 2: 158.72 2.00 proj of the May 11 - 29 - 31 price swing
- RES 1: 158.00 High Jun 28
- PRICE: 157.77 @ 16:13 BST Jun 30
- SUP 1: 155.06/154.05 Low Jun 23 / 20 and key short-term support
- SUP 2: 154.26 20-day EMA
- SUP 3: 153.09 Low Jun 16
- SUP 4: 151.61 Low Jun 15
EURJPY maintains a bullish tone and the cross is holding on to its latest gains. This week’s price action reinforces a bullish theme and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting positive market sentiment. The focus is on 158.72, a Fibonacci projection. Initial key support is at 155.06, the Jun 23 low.
