USDMYR Technical Analysis

The US Dollar dropped against the Ringgit on Monday and is now trading at 4.3730. The downward movement is due to good numbers coming from Malaysia, which has shown a good economic recovery from the COVID crisis, with a falling unemployment rate in recent months. Inflation in Malaysia has also been high (the last reading was 4% in the month of November), but it is still lower than inflation in the US, which last read 7.1% in November. All these numbers point to a favourable economic situation in Malaysia, which should encourage the entry of foreign capital into the country, causing the USDMYR to fall over the next few months. From a technical point of view, if USDMYR breaks down from the 4.3650 level, it may drop as low as 4.2400 before finding some more important support.