The US Dollar rose against the Ringgit on Friday, reaching its highest price since January 1998 at 4.7460. Shortly after the sellers entered the market, causing a pullback and now the USDMYR is trading at 4.7425. The downward movement followed the decision of Bank Negara Malaysia (BNM) to increase the MYR interest rate from 2.50% to 2.75%. The BNM has maintained a slow but steady pace of interest rate hikes over the past few meetings to contain inflation. Due to the predictability of the interest rate increase, this has caused the USDMYR to rise over the last few months, as the pace at which the US Federal Reserve (FED) has been much more aggressive than the interest rate increases for MYR. From a technical point of view, USDMYR is testing the resistance region on the Daily chart. So far the candlestick formation seems to signal the formation of a double top on the daily chart. If the price manages to break below 4.7250 it could pave the way for a longer downward move. On the other hand, USDMYR’s all-time high is at 4.7750, which still leaves room for more bullish movement over the next few days.
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© 2019 High Leverage FX - All Rights Reserved.