USDMYR Technical Analysis

After falling 0.75% against the Ringgit, the US Dollar rebounded and is now trading in positive territory for the day at 4.5400. The upward movement comes after the release of Core Retail Sales data for the USD for the month of October, which came in higher than expected (1.3% real against 0.4% forecast). As Core Retail Sales measures the change in the total value of sales at the retail level in the US, excluding automobiles it is an important indicator of consumer spending and is also considered as a pace indicator for the US economy. When this indicator is higher than expected, it means that consumption is heated, which can lead to inflation in the medium term. As one of the most adopted measures to control inflation is the interest rate, this could make the Federal Reserve (FED) to ponder a more restrictive monetary policy for the USD, which is why the USDMYR rose a little today. From a technical point of view, the USDMYR has made an important drop in the last few days and a bullish retracement is also expected as a natural reaction of the market. It is possible that USDMYR will rise as high as 4.6000 over the next few days before resuming downward movement.