USD/MYR Forecast Today - 29/08: USD Falls Vs MYR (Chart)

2024-08-29 02:56:37

(MENAFN- Daily Forex)

We have seen the US dollar just simply drop like a stone against the Malaysian ringgit.
At this point in time, I would say that we are oversold, but quite frankly, we have been oversold for over 2 weeks.
When you look at the Relative Strength Index, the market is well below the“oversold” condition, and therefore I think a lot of people will be looking to pick up“cheap US dollars”, and while I do think that it is probably only a matter of time before we get a massive bounce, the reality is that you need to be very cautious with this currency pair.

That being said there is a lot of growth in Malaysia, and I think that's probably what's going on here. The GDP in Malaysia is running near the 5 1⁄2% range for most of the year, and I think it will continue to attract a certain amount of money. That being said, if the global economy starts to struggle going forward, it's likely that we could see the US dollar strengthening against quite a few currencies. That being said, Malaysia could end up being an outlier even in that environment, and therefore I think the market could be a bit sluggish.

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The technical analysis for this market is obviously oversold, but it is also absolutely miserable. If the US dollar does turn around, this might be one of the last places you see it strengthen. While the interest rate differential is not drastic, and it probably doesn't influence the trading of this pair very often, but the possibility of the global economy shifting is a very real one, so I think what I might do with this pair is weak to see if the US dollar starts to strengthen, and perhaps look for a buying opportunity here. At this point, we just don't have it, despite the fact that we are so deeply oversold.

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