Fundamental Overview

▪ MYR extended its bullish momentum and strengthened to an 11- week high against the USD, mainly due to stabilising Brent crude oil price amid global growth optimism. The local note also benefited from falling USD index (DXY) following a weak US jobs report. Even though domestic COVID-19 infections remained high, averaging at more than 20.0k a day for the past week, the ringgit uptrend remained intact as almost 50.0% of Malaysia’s population has been fully vaccinated.

▪ MYR is expected to trade range-bound between 4.14 – 4.16 with an upside bias against the USD as the DXY is seen to hover near the 92.0 level amid a big downside miss for US non-farm payrolls in August. Additionally, little to no impact is expected from BNM 5th policy meeting as the central bank is likely to maintain status quo on interest rate. The direction of the ringgit will also be influenced by Malaysia’s key economic indicators for this week.

Technical Analysis

▪ However, EMA signals that MYR may reverse last week’s bullish trend, trading slightly lower against the greenback by 0.32%.

▪ The short-term USDMYR pair technical analysis indicates a bullish USD trend, probably due to its safe-haven pull factor, with an immediate resistance seen at (R1) 4.154. Otherwise, a downward reversal may drive the pair towards the (S2) 4.138 level, should the pair tilt below the (S1) 4.142 support level.

Source: Kenanga Research - 6 Sept 2021