USDMYR Technical Analysis

On a day of low volatility, the US Dollar continues to rise against the Ringgit on Tuesday and is now trading at 4.6480. The Non-Farm Payroll (NFP) data brought a higher-than-expected reading (263k real against 250k forecast), reiterating the scenario of strong economic recovery in the US. The NFP measures US job creation over the past month excluding the agricultural sector and is the most important indicator of the health of the US economy. The unemployment rate data was also higher than expected (3.5% real against 3.7% forecast) and was favourable to the USD. The 3.5% reading is the lowest in the historical series and is another sign of how the US job market is doing. As both data came out positive, this opens the door for the Federal Reserve (FED) to raise interest rates in the short and medium term to contain inflation, which makes investors maintain good expectations of US fixed income bonds, so investors tend to sell other assets to buy US Dollars. From a technical point of view, USDMYR’s all-time high is in the 4.7000 region, where the price is likely to encounter strong resistance.