USD/MYR Forecast Today 31/7: Ringgit Gains (Video)
(MENAFN- Daily Forex)
The Malaysian Ringgit continues to get stronger by the day as it looks like traders are starting to bet on the idea of the federal Reserve perhaps cutting rates. Now that we have broken through the 4.63 level, it's very likely that we will see a little bit of continuation. In fact, you can even see a three black crows pattern on the daily chart and that typically means that any bounce will more likely than not get sold into.
That's not to say that it has to, it's just saying that it would make a lot of sense if this
market fell towards the original Fibonacci swing which is closer to the 4.58 level. Rallies at this point will have to deal with the 4.64 level as resistance and then again, at the 4.66 level.
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That being said, the interest rate in Malaysia is 3% for its over overnight policy. And as a result, it looks like they are staying pat and traders are banking on the Federal Reserve, perhaps starting to hit at cuts. This brings up an interesting situation because on Wednesday, the Federal Reserve has a meeting and a press conference and if they sound overly hawkish, the Malaysian ring it will get hit with basically a sledgehammer, a lot of short covering in this pair would come into play.
On the other hand, if Jerome Powell does sound somewhat dovish, then I think you just see a continuation of the move. Keep in mind, this is an exotic pair, and it only moves for the most part during certain times of the day. And you have to search for a broker that offers it. Nonetheless, once you do find one, then you have to watch the spread. The spread can be sizable, but for a swing trading opportunity, we may be setting up here in the dollar against the ring. Just make sure to watch the next 24 hours. They should tell the tale.
Ready to trade our daily Forex forecast? Here's a list of some of the top forex brokers in Malaysia to check out.
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