Fundamental Overview

▪ MYR plunged for the third straight week to a level last seen on 4 th November 2020. The poor performance was mainly due to increased demand for USD amid rising concerns over the spread of the highly infectious Delta variant across the world. The local note was also pressured by a weak June manufacturing PMI reading of 39.9 and the announcement of the enhanced movement control order in Klang Valley.

▪ MYR may remain subdued this week and is expected to hover around the 4.16 level as the USD index may continue to trade above the 92.0 level amid global risk-off market sentiment. Looking beyond the worsening COVID-19 situation on deck, the direction of the MYR may be influenced by the release of the FOMC minutes and BNM’s monetary policy committee meeting outcome

Technical Analysis

▪ According to our 5-day EMA indicator, MYR is projected to reverse its weakness last week with a slight gain of 0.14% against the greenback to 4.157 this week.

▪ From a technical perspective, the safe-haven dollar may face some downward pressure this week, with an immediate support observed at (S1) 4.152 level. Inversely, a break above the (R1) 4.168 resistance level is needed to confirm the continuation of USD uptrend.

Source: Kenanga Research - 5 Jul 2021