▪ MYR jumped and closed higher on Friday last week in an apparent reaction to higher Brent crude oil price which broke through the USD62.0/bbl mark. Also, risk-on mood in Asia market on the back of a softer USD, amid tepid US inflation data, Fed’s dovish statement and US stimulus hopes, has helped to boost the local note to trade higher.
▪ MYR may extend its gains against the USD this week as the greenback may continue to track a bearish trend amid US stimulus expectations and ongoing vaccine progress. A weaker USD and higher commodity prices are likely to improve investors' risk appetite and boost riskier assets. Locally, a further loosening of COVID-19 restrictions is expected to provide additional support for the ringgit.
▪ In contrast to MYR’s bullish fundamental outlook, based on the EMA indicator, the ringgit is expected to depreciate slightly by 0.12% to 4.046 this week, highlighting a potential correction in the oil markets.
▪ The dollar may see some upward momentum this week and breach the (R1) 4.058 level if there is a shift in market sentiment. Conversely, a break below the (S1) 4.033 support level is needed to confirm MYR extended bullish bias.
Source: Kenanga Research - 15 Feb 2021
Created by kiasutrader | Aug 26, 2024