Malaysian Ringgit: External pressure but scope for reversal – OCBC
Christopher Wong at OCBC writes that the Malaysian Ringgit weakened during Thursday’s Asian session on a firmer US Dollar and higher US Treasury yields after the FOMC, with USD/MYR briefly trading above 4.10 in an orderly move.
Christopher Wong of OCBC reported that the Malaysian Ringgit (MYR) experienced a weakening trend during Thursday's Asian session, primarily due to the US Dollar's strengthening and higher US Treasury yields following the Federal Open Market Committee (FOMC) meeting. The USD/MYR pair briefly breached the 4.10 mark in an orderly manner before stabilizing.
The weakening was short-lived, as the Dollar and yields retreated, and oil prices dipped. OCBC anticipates that MYR trading will remain cautious if US yields and the Dollar continue to rise, but they also note the potential for a reversal in recent weakness as post-Fed moves settle and domestic fundamentals remain supportive. The daily chart still exhibits bullish momentum, although the Relative Strength Index (RSI) has approached overbought territory.
Failure to follow through with upward price action could result in USD/MYR retesting the earlier post-holiday gap. Key support levels are identified at 4.0870 and 4.0730, while resistance is positioned at 4.10 and 4.12.
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