Fundamental Overview

▪ MYR weakened to above 4.15 level versus the USD as Brent crude oil price fell below USD40.0/barrel for the first time since mid-June and a sudden spike in local COVID-19 infections. However, improving economic data and upbeat BNM comments has helped to limit further MYR depreciation.

▪ Lingering concerns over global oil demand could drag crude oil prices lower, potentially pushing MYR to trade lower this week. Nevertheless, further USD weakness ahead of Fed’s policy meeting and rising global COVID-19 cases could offset MYR downward pressure.

Technical Analysis

▪ 5-day EMA signals an extended week of potential bullish for USD this week, with MYR expected to depreciate by 0.18% to 4.159 against the greenback from its closing price of 4.152 last Friday

▪ The short-term technical outlook shows that the USD may test the pair’s upside at (R1) 4.164 and potentially hit (R2) 4.177 level. Conversely, a potential downside could tilt the pair towards (S1) 4.145 and (S2) 4.139 support level.

Source: Kenanga Research - 14 Sept 2020