After 7 months of almost non-stop bullish movements, the US Dollar started a strong bearish move on Thursday and is now trading at 4.7120. The downward move comes after touching the resistance region at 4.7400 and with expectations that the Federal Reserve (FED) will slow the pace of interest rate hikes through the end of the year. The release of New Home Sales data came in a little higher than expected (603k real versus 585k forecast), but it wasn’t enough to maintain the structure of the USDMYR’s bullish move.
The downward movement can also be explained by the appearance of a Classic Bearish Divergence on the daily chart and the reading of the Relative Strength Index (RSI) indicator above 90, signalling an extreme overbought situation. As the price managed to pass below 4.7190, it is possible that USDMYR will maintain a bearish movement over the next few days until it touches the 4.6290 region, where it may find temporary support.
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© 2019 High Leverage FX - All Rights Reserved.