Fundamental Overview

▪ MYR gained for the second straight week, it closed higher at 4.164 level against the dollar last week, highest since March 6th before COVID-19 pandemic hit. The US Fed policy shift, rising Brent crude price, and a second successive month of growth rebound in Malaysia's export numbers, which beat market expectations drove ringgit strength.

▪ MYR is expected to extend its rally against the USD this week as oil price edge up on global stimulus measures while dollar weakness to persist given the US Fed's new monetary policy framework suggested that its interest rate would stay near zero for a longer period. A slew of US economic data releases this week may provide support to the USD as most estimates pointed towards a progressive recovery.

Technical Analysis

▪ Looking at the EMA technical indicator, MYR underlying bullish trend seems incapable of continuing its development, prompting MYR to depreciate by 0.10% to 4.168 this week.

▪ From a technical perspective, the local note may not sustain its uptrend this week, in which a breakout of the (R1) 4.172 mark could be the start of a reversal pattern. However, a breach below the (S1) 4.160 support level is possible to invalidate the dollar bullish setup

Source: Kenanga Research - 1 Sept 2020