Maintain short positions. The FCPO failed to break past the MYR4,300 resistance level, retracing by MYR74.00 to settle at MYR4,217. The commodity initially opened weaker with a gap-down, at MYR4,256. It then staged a quick rebound to test the intraday high of MYR4,334. However, profit-taking near the MYR4,300 level capped any increase, whereby the commodity reversed direction to touch the day’s low of MYR4,202 before closing. The FCPO may consolidate sideways above the MYR4,160 support level before another attempt emerges to test the immediate resistance again. Meanwhile, if the current negative momentum is extended, breaching the support level may trigger more downside risks. Since the stop-loss remains intact, we are maintaining a negative trading bias.

Traders should stick to short positions, initiated at MYR4,308 or the closing level of 28 Jul. To mitigate trading risks, the stop-loss is set at MYR4,300.

The immediate support remains at MYR4,160, the low of 4 Aug, followed by MYR4,074, the low of 22 Jul. Conversely, the nearest resistance is at MYR4,300, followed by MYR4,366, or the low of 30 Jul.

Source: RHB Securities Research - 6 Aug 2021