Occasional bullish attempts in USD/MYR are likely to meet a tough resistance in the 4.2000 level, according to Quek Ser Lean at UOB Group’s Global Economics & Markets Research.
Key Quotes
“Last Monday (23 Aug, spot at 4.2280), we highlighted that ‘shorter-term downward momentum is beginning to build’. We added, ‘a break of the trend-line support would not be surprising but for this week, the next support at 4.2090 is likely out of reach’.”
“While our view for the trend-line support to break was correct, we did not anticipate the manner by which USD/MYR accelerated lower and took out several strong support levels with ease. Note that on a weekly basis, USD/MYR lost -1.13%, its biggest 1-week decline in a year.”
“Currently, USD/MYR is holding above a major support at 4.1660. While shorter-term conditions are deeply oversold, a break of this support would not be surprising. In view of the oversold conditions, the next support at 4.1450 may not come into the picture this week. The key resistance is at 4.2000 now. On a shorter-term note, 4.1880 is already a strong resistance level.”
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