USDMYR Technical Analysis

The US Dollar appreciated +0.04% against the Ringgit this Wednesday and is now trading at 4.6770. Despite the upward movement, USDMYR shows an important entry of selling force, as the price touched the resistance region on the daily chart and today’s candle leaves a shadow to the upside, characterizing a possible fake breakout of the resistance on the daily chart. The movement comes after the release of Consumer Price Index (CPI) data for the US, which came in higher than expected (3.7% real against 3.6% forecast). Today’s CPI reading was higher than last month’s reading (3.2%) and this reaffirms the market’s view that the US is entering an inflationary scenario again. From a technical point of view, if the price manages to break below 4.6700, it is possible that USDMYR could fall to the 4.6320 region in a few days. On the other hand, a breakout above the 4.6850 region could pave the way for USDMYR to rise towards the 4.7400 in a few weeks. Investors should pay attention to the Producer Price Index (PPI) data for the USD tomorrow, as well as Retail Sales, as together these indicators can help understand the macroeconomic outlook in the US in general.