▪ Despite Malaysia's accelerated vaccine roll-out and falling US 10-year Treasury yield, MYR depreciated against the USD to its lowest level since mid-August 2020 as domestic COVID-19 cases continue to set new daily records. In addition, the ringgit also closed lower against most major currencies as investors turned cautious amid renewed domestic political uncertainty.
▪ The local note is expected to remain volatile this week on the back of Malaysia’s worsening COVID-19 situation, uncertain political climate and lack of pro ringgit catalysts. Nevertheless, rising crude oil prices may continue to provide support to petrocurrencies, and should help to limit further ringgit downside.
▪ In spite of the current risk-off environment, if the USDMYR pair dive towards the 5-day EMA of 4.175, it is possible that we will see a MYR bullish reversal below the 4.170 level.
▪ From a technical point of view, should there be any ringgit buying interest, the local note is expected to reverse its bearish position and trade around the (S2) 4.142 – (S1) 4.167 level. Inversely, a break above the (R1) 4.204 level is needed to confirm MYR extended bearish bias.
Source: Kenanga Research - 12 Jul 2021
Created by kiasutrader | Aug 26, 2024
Created by kiasutrader | Aug 26, 2024