▪ Despite falling Brent crude oil price and Malaysia’s new record high of 20,889 COVID-19 cases reported last Friday, MYR still ended last week's trading session in the green against all major currencies. The local note strengthened slightly against the USD last week, even as the USD index continued to climb higher. The appreciation of the ringgit was probably due to the favourable MY-US bond yield spread and the country's swift vaccination campaign.
▪ MYR is expected to trade range-bound between 4.21 – 4.23 with a downside bias against the USD as Malaysia's daily COVID-19 cases are expected to continue to set new record. To add, the ringgit may face further pressure due to the stronger dollar dynamics following US strong jobs data. However, a stronger-than-expected 2Q21 GDP reading and news on loosening the SOPs may turn the tide for the ringgit.
▪ According to our 5-day EMA indicator, MYR is projected to reverse its uptrend last week with a slight depreciation of 0.03% against the greenback to 4.220 this week.
▪ This indicates a bearish pattern for the MYR this week. From here, the strong USD trend could push the USDMYR pair towards the (R2) 4.228 level if the (R1) 4.224 resistance level is breached. Conversely, a rally towards the (S1) 4.216 level will invalidate the USD bullish pattern.
Source: Kenanga Research - 9 Aug 2021
Created by kiasutrader | Aug 26, 2024
Created by kiasutrader | Aug 26, 2024