USDMYR Technical Analysis

The USDMYR has moved little in recent days, mostly holding a sentiment of indecision, and is now trading at 4.4140. The feeling of indecision happens due to the market’s concern regarding the next steps to be taken by the Federal Reserve (FED) regarding the monetary policy for the US economy. The market is predicting a rise to 4.5% in the USD interest rate (the interest rate is now at 4%). The fear, however, happens due to the press conference that will take place shortly after the announcement of the decision on the interest rate. This press conference may give important hints on how the FED will behave during 2023, whether with a more hawkish or dovish stance. The interest rate is important because it determines how bonds will be remunerated. If the rate gets too high, investors can choose to sell risky assets (such as stocks and other currencies) and buy USD to buy US bonds, after all, it makes no sense to take additional risks if the US Treasury is paying a good return with (almost) no risk. Therefore, it is possible that the market will maintain a sideways behaviour, reflecting investors’ expectations regarding the future interest rate for the USD in 2023. From a technical point of view, the USDMYR is in a support region and a retracement to the house of 4.4700 could happen over the next few days.