USD/MYR Forecast Today - 21/08: USD Falls Vs MYR (Chart)
Date
8/21/2024 3:03:29 PM
(MENAFN- Daily Forex)
This is a pair that is obviously pretty far out there on the risk appetite spectrum, as the Malaysian ringgit is in exactly the first place people go looking to for investment, at least not unless they are somewhat comfortable expanding their reach.
The size of the candlestick during the trading session on Tuesday isn't much to look at, but what is worth noting is that on Monday we broke below the crucial 4.4 level, which has a certain amount of psychology attached to it. We are well below the 61.8% Fibonacci retracement level, so that in and of itself typically means that we are going to go much lower. Because of this, I typically look for a“round-trip” to play itself out, meaning that we could drop down to the 4.22 region. Because of this, I think the short term rally to show signs of exhaustion will more likely than not set up selling opportunities.
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All that being said, we are a little overextended to the downside, and it is like the US dollar has fallen off of a cliff against the ringgit. Ultimately, short-term rallies will continue to face all lot of resistance extending all the way up to the 4.5 level, which obviously is a large, round, psychologically significant figure, and an area that we've seen some action at previously's All About the Greenback
At this point, I don't really care about the Malaysian ringgit itself, I think it has more to do with the overall attitude and strength or weakness of the greenback. The entire world is watching the Federal Reserve, and what they may do next. Everybody expects the Federal Reserve to cut interest rates in September, but the question now is whether or not the Federal Reserve is going to cut aggressively, and some people were even out there calling for 75 basis points. I don't think that's going to happen anytime soon, because quite frankly if you were to see that, it would be a sign that the Federal Reserve is panicking, and it could throw the markets into disarray.
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