After several days of hesitation, the US Dollar finally managed to break above the resistance at the 4.1700 level against the Ringgit and is now trading at 4.1800. This price movement marks what could be a new USDMYR price zone, as the next resistance point is now at 4.2200. From a macroeconomic point of view, today we had Initial Jobless Claims coming from the US, which showed numbers worse than expected (373k real result against 350k forecast). Although this news at first may suggest that the US dollar should fall, this devaluation movement of Ringgit against the Dollar can be explained by the growing market concern with the delta variant of the Covid-19, already found in local transmissions in Malaysia. From a technical point of view, the US dollar may continue to rise against Ringgit up to the 4.2200 level in the coming days.
The Dollar made a major bullish move against the Chinese Yuan this Thursday following the release of US Initial Jobless Claims data. Although the data was more negative than expected (373k real result against 350k forecast), the devaluation of the dollar in recent months needs to be offset by a sharper retraction. Within a cyclical view, it is understood that after a long downward movement (as is the case in the US dollar), eventually an upward movement will emerge, even if the fundamentals do not indicate that direction. To a great extent, the need to pull back after a long directional move is due to institutional traders who positioned themselves months ago and now need to take profits. From a technical point of view, if the price breaks above the 6.5000 level, it could go up to the 6.5850 level in 2 or 3 weeks.
