The US Dollar rose +0.52% against the Ringgit this Monday and is now trading at 4.7900, the highest price ever. USDMYR has already accumulated an increase of 8.85% since January 2, 2023 and has now shown the breakout of historical resistance at 4.7750. This signals an important buying force on the part of the US Dollar, supported mainly by the 10-year Treasury that has reached 5%. This is the first time it has reached this level since 2007. Another element that adds weight to the appreciation of the USD against the Ringgit is the geopolitical instability caused by the war between Israel and Hamas. From a technical point of view, there are 2 important elements to be highlighted:
1 – USDMYR has broken above the all-time high (at 4.7750) and there is no price history above this level. It can be said that USDMYR has entered a price level it has never been at before. Therefore, there will be few technical analysis parameters to determine regions of resistance for the simple fact that there are no resistances above 4.7750 yet. Ways of analysing the market will end up relying on indicators (such as the Relative Strength Index – RSI – which measures the market’s overbought/oversold level), Fibonacci projections of previous movements and round numbers (such as: what will happen to the USDMYR when it touches the 5.0000 level?).
2 – The fact that the price broke resistance on the daily and entered unknown territory also shows that there is enough buying force to do so and investors should analyse technical indicators with double attention. If the current movement is one of ignition of the buying force, the price could rise a lot before starting to fall. Investors should pay special attention to macroeconomic data coming from the USA and Malaysia in the coming days as that’s what will determine the next main moves.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.