News / Foreign Exchange
We haven’t touched on the peso for a while as the trend has continued downwards without pausing, until recently.
Since late December 2007, the peso has traveled sideways in a pause of its appreciation against the US dollar. It is now forming what seems to be a descending triangle pattern which gives us a support around 40.50. Should the triangle continue the downtrend, which we do expect to happen, the short-term downside target for the dollar would now be pegged at 39.26.
There are some who expect that the peso will retest the 41.50-42.00 level before continuing the downtrend. We think they’re attributing this to what the MACD is telling them. The MACD is in a rally mode, however, as the latest data shows that the fast line is ready to cross below the slow line once again and continue the bearishness for the dollar. So will the rally to the 42.00 peso level happen? It could but it will meet some resistance near the 41.00 peso level first as the 50-day moving average is already at that level.
In conclusion, things still look bearish for the dollar. There could be some rally in the dollar but I don’t know if it could be sustained. 
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