The Dollar has been gaining value against the Ringgit for the last 10 days, without any important retracement and it is now traded at 4.2300. This type of movement (with no retracement) tends to last little time in the market and the greater the slope of the bullish movement, more prone it is to make a strong retracement down. There is also the fact that the USDMYR already touched the resistance level at 4.2350 and showed an initial signal of exhaustion. From a technical point of view, a major pullback is expected as the buyers seems to be running out of steam. If a major retracement does take place, it could drive the price all the way down to the 4.1750 level, where more buying pressure is likely to hit the market.
After a long period of down trend since the last year, the US dollar had been moving sideways against the Chinese Yuan and it has now been traded at 6.4675. This sideways lateralization happens amid uncertainties involving the inflation scenario in the US and the increasing number in the Delta variant of the COVID-19 around the world. The tension between US and China has also been in the radar and the VIX (the index that measures the fear in the market) has jumped this week. Any signal of an increase in the interest rate, or a cut in the financial stimulus in the US, could bring some bullish momentum to the US dollar against the Chinese Yuan.
