USDMYR Technical Analysis

The US Dollar starts the week with another bullish move against the Ringgit and is now trading at 4.7360. Last week one of the directors of the Federal Reserve (FED) said that he sees a chance of a slowdown in the pace or even a pause in the USD interest rate hike in the mid-term. This caused the USD to temporarily lose value against its counterparts. However, this week the USDMYR has already resumed its upward movement because the difference between interest rates remains attractive to buy US government bonds and therefore sell the MYR. From a technical point of view, USDMYR is at its highest price since January 1998. The Relative Strength Index (RSI) indicator is in an overbought region (90.44) and there is a Classic Divergence forming on the Daily chart. These elements point to a possible decline over the next few days and an entry could be signalled if the price manages to break below 4.7190.