USD/MYR Technical Analysis

The US Dollar was mostly sideways against the Ringgit on Tuesday and is now trading at 4.1870. The latest macroeconomic news from the US shows that the unemployment rate is low, but with high inflation (the highest in the last 40 years). The market has been in indecision because of the interest rate decision for the USD, which is due out on Wednesday. There is a real possibility that the Fed will increase the interest rate from 0.25% to 0.50% to contain the effects of inflation. If this indeed happens, the USDMYR could rise substantially in the coming days. If the Fed starts raising interest rates, it will also signal a major shift in the US Central Bank’s positioning from dovish to hawkish in its monetary policy. From a technical point of view, if USDMYR manages to break above 4.1950, it could move up to 4.2450 in a few days.