USDMYR Technical Analysis

The US Dollar remains steadfast in its bullish move against the Ringgit on Tuesday and is now trading at 4.6010, the highest price since January 1998. The recent bullish move comes after widespread panic caused by the fall in European equities as well as GBP. The sense of fear is amplified by the constant threats that Russia could resort to nuclear weapons to maintain its position in the war against Ukraine. Also, the constant flow of weapons sent from the US to Ukraine could end up dragging the US into the conflict against Russia. Another important element is the fear of energy rationing due to the cut in the supply of Russian gas to Europe. The effects of this cut should become more intense soon with the arrival of winter on the European continent. From a technical point of view, USDMYR is approaching the historical resistance region of 1998 when the price reached 4.7750. As there is no major resistance between the current price (4.6010) and the all-time high (4.7750), USDMYR is likely to move higher. An alternative scenario is more possible if the Federal Reserve (FED) changes its tone to a more dovish stance, which is unlikely at the moment.