▪ MYR strengthened against a weakening US dollar last week as there is an improvement in global risk sentiment despite rising COVID-19 cases globally. Furthermore, steady rise in Brent crude oil price and improved sentiment on the local equities market has helped to further support the ringgit.
▪ MYR is expected to sustain its bullish momentum if crude oil markets continue to improve and there is a positive outcome over the EU recovery fund at the EU summit over the weekend. However, the local note could be partially weighed down by the return of risk aversion due to the COVID-19 uncertainty.
▪ EMA technical calculations indicates that MYR to depreciate slightly by 0.05% to 4.267 this week, pointing to a potential bullish comeback for the USD.
▪ Technical wise, USD is expected to gainsome upward momentum this week, with an immediate resistance to test at (R1) 4.269 level. Meanwhile, a break below the (S1) 4.261 support level is needed to validate the bearish reversal pattern for the USD.
Source: Kenanga Research - 20 Jul 2020
Created by kiasutrader | Aug 26, 2024