USD/MYR Analysis Today - 12/09: Drop After Recent Surge

(MENAFN- Daily Forex) The USD/MYR continues to deliver a speculative playground for day traders who like the combination of potential swift moves and light transaction volumes, which create fast and hard to predict short-term wagers.

• Forex trading is rarely a one way street. Shifts in momentum can strike quickly and hurt day traders without any warning.
• Mid and long-term trends in currency pairs are always littered with stories about brief swings in value that can harm speculators if they are unprepared.
• As of this writing the USD/MYR exchange rate is near the 4.3345. This price ratio has seen a rather intriguing test the past week.
• Limited moves downward continue to demonstrate the mid-term bearish trajectory the USD/MYR has achieved.

However, while the 4.3300 to 4.3200 realm has seen attempts at lower values in the USD/MYR the past week, the currency pair also experienced a fast and wicked move upwards which touched the 4.3712 vicinity on Monday. This occurred after last Friday's U.S jobs report was published that came in weaker than anticipated and Malaysian and Asian financial institutions returned to their office early on Monday.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money USD/MYR Lows Followed by Highs and then a Return to Lower Depths

After seeing a flurry of nervous buying activity on Monday, the USD/MYR then resumed its selling momentum. The price action in the currency pair largely correlated to the broad Forex market. It must be remembered that because the USD/MYR has limited trading volume due to the size of commercial transactions within the currency pair, and the knowledge Malaysian financial institutions are mostly closed while U.S economic reports are published a lot of the time, the reaction in the USD/MYR sometimes seems to feel like it has been delayed.

The ability of the USD/MYR to resume downwards momentum is not surprising. The currency pair has demonstrated a solid bearish cycle since the middle of April. At some point the USD/MYR is likely to see its move lower slow, but for the time being financial institutions have certainly been showing an ability to take the currency pair lower. The USD/MYR is challenging values last seen in a sustained manner in February of 2023. In January of 2023 the USD/MYR traversed lower price ratios Day of Trading Coming for the USD/MYR

The European Central Bank will announce its interest rate decision this afternoon. Trading in the USD/MYR may react late to this news, meaning tomorrow's trading could turn volatile in the early hours. If the ECB lowers their Main Refinancing Rate by more than 0.25% it could cause a storm in Forex globally, this because financial institutions may take it as a sign the U.S Federal Reserve could also become more aggressive and this would produce USD/MYR selling.

• However, and this is important, if the ECB only lower their interest rate by 0.25%, some financial institutions may become discontent.
• While the ECB decision is not a direct influence on the USD/MYR it can be related because of the effect on behavioral sentiment.
• The sideways price action in the USD/MYR the past day reflects caution.
• If the ECB proves to be cautious today, the USD/MYR may see some upwards momentum develop in the near-term.
• Risk management will be crucial today and tomorrow in the USD/MYR.

USD/MYR Short Term Outlook:

Current Resistance: 4.3390

Current Support: 4.3300

High Target: 4.3550

Low Target: 4.3190

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