Fundamental Overview

▪ MYR snapped its three-week losing streak and ended last week's trading session in the green against all major currencies. Despite rising domestic COVID-19 cases, the local note gained against the weakening USD mainly due to a better-than-expected exports reading which surged by 63.0% YoY and a steadier Brent crude oil price which is approaching the USD70.0/barrel threshold.

▪ The sudden announcement of a full-scale Movement Control Order (MCO) last Friday may cause some short-term local market volatility, with the MYR expected to whipsaw against the USD, potentially breaching the 4.15 level. However, moving closer to the end of this week, the local note is seen to trade in a range of 4.13 to 4.14 on expectation of a stable crude oil prices and the weak dollar narrative.

Technical Analysis

▪ Based on the 5-day EMA technical indicator, MYR may weaken this week and depreciate by 0.13% to 4.139.

▪ Technical-wise, MYR is expected to trend lower against the USD, with the pair's immediate resistance awaits at (R1) 4.142, followed by (R2) 4.150. Conversely, the pair may test the (S1) 4.129 level, and a sustained dive below (S2) 4.124 should confirm MYR’s short-term uptrend.

Source: Kenanga Research - 31 May 2021