▪ MYR retreated last week after a 7-week rally against the USD, as Malaysia's economy suffers a record GDP contraction of 17.1% in 2Q20. Despite stable oil prices and COVID-19 vaccine optimism, ringgit weakened against the firmer US dollar due to a rise in US bond yields and gloomy China data.
▪ MYR is expected to face another week of sell-off if there is any pro dollar outcome over the postponed Sino-US trade talks and US stimulus debate. However, MYR downside may be partially capped by the underwhelming US retail sales and industrial production data.
▪ EMA technical indicator indicates that MYR to further depreciate by 0.03% to 4.194 this week, highlighting an extended bullish momentum for the USD.
▪ The short-term technical outlook sees an upside bias for USD but within a tight range with an immediate resistance level at (R1) 4.196, a break of which will test the (R2) 4.199 level. However, a breach below the (S1) 4.191 support level is needed to validate the MYR comeback towards the (S2) 4.188 and bey
Source: Kenanga Research - 17 Aug 2020
Created by kiasutrader | Aug 26, 2024