The US Dollar broke above the previous level of resistance against the Ringgit, at 4.1700 and it is now traded at 4.1910. This movement happened because of the increasing fear of inflation in the US and today’s data, the Core Consumer Price Index brought a much higher than expected reading (0.4% of forecast against real 0.9). Although the FED keeps saying that this inflation is just temporary, the market is already seeing that the FED will have to step in before stated and at least withdraw some of the stimulus that are in place right now. From a technical point of view, the dollar could keep gaining ground against the Ringgit until the 4.2350, where it can find some resistance.
The Ringgit has been losing value against the Chinese Yuan in the last days and it is now traded at 1.5396. As there has been a long down trend in place, since January 2020 and the MYRCNH is approaching an important support area, it could bounce back in the next few days and go to the 1.5600 area. There are some very important macroeconomic events scheduled for this week, such as the Chinese GDP and the Industrial Production, both due on Thursday. Those numbers could bring some clue about the Chinese economy and the MYRCNH. From a technical point of view, should an upward momentum appear around the 1.5350 support zone, it will mean more power to the MYR. On the other hand, if the price breaks below the 1.5350 level, it could go to the 1.5150 level in a matter of days.
