Kenanga Research & Investment

Author: kiasutrader   |   Latest post: Wed, 27 Jan 2021, 11:05 AM


Ringgit Outlook - May take a breather as risk aversion returns

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Fundamental Overview

▪ MYR continued its bullish momentum and rallied to a level last seen in January 2020 before the pandemic hit. The appreciation was mainly driven by positive news on COVID-19 vaccine development led by Pfizer & Biontech and Moderna. Higher Brent crude oil price following OPEC+ technical meeting also boosted the local note.

▪ MYR uptrend may sustain on the back of positive vaccine news. Nevertheless, downside risk remains amid rising COVID-19 infections and domestic political uncertainty. The parliament is set to vote for the Supply Bill 2021 this week.

Technical Analysis

▪ Looking at the EMA technical indicator, MYR is expected to depreciate marginally by 0.19% to 4.100 this week, highlighting a potential bullish comeback for the USD.

▪ From a technical perspective, the safe-haven dollar is expected to see some upward momentum as risk aversion grows, with an immediate resistance observed at (R1) 4.109 level. Inversely, a break below the (S1) 4.081 support level is needed to validate the bearish reversal pattern for the USD.

Source: Kenanga Research - 23 Nov 2020

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