USDMYR Technical Analysis

The US Dollar gained some strength against the Ringgit on Wednesday and is now trading at 4.3945. The upward movement comes with the release of inflation data from the Philippines, which came in higher than expected (6.5% real against 6% forecast), which casts doubt on the macroeconomic scenario of Southeast Asia as a whole. Another important element that caused the USD to appreciate is that investors are beginning to wonder when the Federal Reserve (FED) will change monetary policy on interest rates. Considering that the next FED meeting is on the 14th, the market is already starting to move in an attempt to anticipate the next moves by the US central bank. From a technical point of view, considering the previous downward movement (USDMYR is down 8.1% since November 7th) and that the Relative Strength Index (RSI) indicator was showing an oversold scenario, it is possible that a bullish pullback is on the way. The daily chart’s candlestick also shows ignition of buying force through an engulfing pattern, as USDMYR is trading above yesterday’s high. It is possible that the USDMYR will move up to 4.5100 in the coming days, where it should find resistance.