USDMYR Technical Analysis

The US Dollar fell against the Ringgit on Tuesday and is now trading at 4.4700. The recent downward movement comes a day before the interest rate decision for the USD. The market is quite divided as to what the Federal Reserve (FED) will do tomorrow. One possibility is an increase in interest rates, since inflation is high and the unemployment rate is low. One of the problems with this stance is that it can add even more pressure on the banking sector and a crisis of confidence in banks tends to be worse than inflation. On the other hand, if the FED does not raise the interest rate, this gives the banks a breather, but it could significantly worsen the inflation scenario in the coming months. Reconciling these two factors is one of the biggest challenges for the FED at this moment. From a technical point of view, USDMYR is still sideways and a break below 4.4630 could pave the way for a drop to 4.3650 in a few days.