Fundamental Overview

▪ MYR surged to its strongest level in over six months, trading below the 4.15 threshold on continued dollar weakness following the Jackson Hole symposium and rising risk appetite amid the release of strong manufacturing PMI data from China. The upside was partially capped by profit-taking activities.

▪ MYR may trade sideways ahead of the BNM’s monetary policy decision on Thursday. House expects BNM to stay pat on rate decision. The downside would however be limited by continued hunt for higher-yielding bonds and the expected release of favourable China’s August economic data.

Technical Analysis

▪ 5-day EMA signals a potential bullish comeback for USD this week, with the local note predicted to depreciate by 0.06% against the greenback from its closing price of 4.148 last Friday.

▪ The short-term technical outlook indicates that the dollar may test the pair’s upside border at (R1) 4.160 and then resume moving upwards to reach (R2) 4.172 level. However, a tilt below the (S1) 4.139 support level would invalidate the probable bullish USD scenario.

Source: Kenanga Research - 7 Sept 2020