Philippine Peso: USD/PHP bearish bias but risk of snapback – OCBC

FXStreet Insights Team FXStreet

OCBC’s Christopher Wong describes USD/PHP as bearish but oversold after a sharp gap lower on softer yields and Oil. With inflation still above target and growth slowing, Bangko Sentral ng Pilipinas (BSP) faces a difficult decision, where a firmer policy response could support PHP. However, a BSP disappointment or adverse external shift could trigger a corrective snapback in USD/PHP.

Oversold PHP faces BSP test

"USDPHP. Bearish but looking oversold. USDPHP gapped sharply lower yesterday in response to softer yields, oil prices."

"This week’s focus shifts to BSP, which may face a tougher balancing act. Inflation is still too high (last print at 6.8%, outside BSP’s 2-4% target range), but growth has also slowed."

"Consensus is leaning toward a 25bp hike, but a larger 50bp move should not be ruled out given the risk that BSP risks falling behind the curve."

"A scenario of firmer policy response, alongside softer oil prices can help PHP recover some lost ground. Elsewhere, watch FOMC for any hawkish surprises that may upset momentum."

"Momentum is bearish while RSI looks oversold. Risk of snapback should BSP disappoints or external environment turns. Support at 60.10 (38.2% fibo retracement of 2026 low to high). Resistance at 60.72 (23.6% fibo), 61 levels (50 DMA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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