USDMYR Technical Analysis

The US Dollar was down 1.45% against the Ringgit on Thursday and is now trading at 4.4430. The downward movement comes after the release of the US ADP Non-Farm Employment change, commonly known as the ADP. The ADP measures the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. The release, two days ahead of government data, is a good predictor of the government’s non-farm payroll report. Therefore, as this number was lower than expected (127k real against 200k forecast), the market interpreted that the Non-Farm Payrolls (NFP) data to be released on Friday, will likely come lower than expected as well and this tends to be negative for the USD. From a technical point of view, USDMYR has accumulated a huge bullish move since December 2020 and a bearish retracement is seen as natural, as when buyers take profits, they end up causing selling pressure in the market. However, USDMYR is sitting in an important support region on the daily chart (4.4430). The definition of a breakdown from this support may be clear only on Friday with the release of the NFP data.