USD/MYR Signal Today 06/01: Poised For Breakout (Chart)
(MENAFN- Daily Forex) Potential signal:
I would be a buyer of the US dollar at 4.53 MYR. I would have a stop loss at 4.47 MYR, and would be aiming for 4.65 MYR.
Looking at emerging markets, the US dollar continues to be a bit of a thorn in the side for a lot of currencies, with the Malaysian Ringgit being no different. It's worth noting that we are trading at the 4.50 MYR level, which has been important more than once. With this being the case, I think it is a currency pair that you will have to pay close attention to, because it could kick off a bit of a“chain reaction” around Asia as it would show strengthening US dollar attitude amongst Asian traders.
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The technical analysis for this pair is rather strong, and we have been squeezing for a while, showing the idea that perhaps the market is trying to take off to the upside. If and when it does, then I think you've got a situation where the US dollar could really start to pick up significant momentum. This would make a certain amount of sense, mainly due to the fact that the US dollar is beating up on every other currency right now, so why would the Malaysian ringgit be any different?
On short-term pullbacks, there is a significant amount of support near the 4.45 MYR level, especially now that the 50 Day EMA is racing toward that area. It's probably worth noting that the Friday session has seen the US dollar break above the 200 Day EMA against the Malaysian ringgit, and now we are threatening a major resistance barrier just above. In fact, based upon the candlestick for the Friday session, I suspect it is probably only a matter of time before you start to see the US dollar really take off against this currency.
If we were to turn around and start falling, move below the 50 Day EMA could open up a move down to the 4.40 MYR level, which is an area that's been important in the past as well. That being said, I don't really see that happening, at least not without some type of major macroeconomic event to punish the US dollar. With this, I remain bullish.
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