USDMYR Technical Analysis

The US Dollar appears to be initiating a bearish move against the Ringgit on Wednesday and is now trading at 4.7330. The downward movement takes place amid the release of Consumer Confidence data for the month of October, which brought a lower-than-expected reading (102.5 real against 106.5 forecast), which tends to be negative for the USD in mid-term. Consumer Confidence measures the expectations of families regarding the economic scenario in the short and medium term. Considering that household spending represents approximately two-thirds of GDP, when households are less confident about the economic future, this tends to be reflected in GDP. From a technical point of view, USDMYR is in an important resistance region and if the price manages to break below 4.7190, it could signify a more important bearish entry and start a larger bearish move. If we add to that the fact that the Federal Reserve (FED) is considering slowing the pace of interest rate hikes, the USDMYR could make an important retracement down over the next few days.