The US dollar has been moving sideways against the Malaysian Ringgit since April 26, earlier this week. This consolidation comes after the price managed to break below 4.1050 on Monday, reaching its lowest level on Tuesday, 4.0930. This lateralization is normal after the wide downward movement on the past few days. As the 4.1050 level was an important support, as long as the price remains below that level, sellers are still in control of the situation. Over the next week, traders should pay attention to the 4.1050 level, whose upward breakout may show a more important buying force entry. The break below 4.0930 could be interpreted as a continuation of the selling pressure and the next target should be at around 4.0750.
This week the FED decided to keep the interest rate unchanged (at 0.25%) and the FOMC report brought a glimpse over the next steps in the monetary policy and where the interest rates are headed to. The Fed’s position was to use the full range of its tools at its disposal to leverage the US economy. This means more stimulus and money printing, which could mean the continuation of the downward trend in the US Dollar against the MYR. From a macroeconomic point of view, the scenario remains unchanged. Investors should pay attention to Malaysia Money Supply due later today. Next week, the eyes should turn to the US unemployment rate.
