USDMYR Technical Analysis

The US dollar was undecided against the Ringgit on Monday and is now trading at 4.6030. The sentiment of indecision is caused by the United States – Memorial Day holiday, which kept banks closed in the US. Investors are also awaiting the release of the US CB Consumer Confidence for the month of May which is expected to be released later on Tuesday. Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. If the reading comes in higher than expected, investors may think that consumption is heating up in the US, which could lead to a scenario of higher inflation. If inflation rises, the Federal Reserve (FED) may end up raising USD interest rates. So if tomorrow’s reading comes in much higher than expected, USDMYR may continue to rise. From a technical point of view, the Relative Strength Index indicator (RSI) is at 76.51, which indicates the exhaustion of the buying force of the last few days. A downward move could happen if the price breaks below 4.5850, which may cause USDMYR to drop as low as 4.5250 in a few days.