The US Dollar showed another day of bullish movement and finally touched resistance on the daily chart at 4.5000. The candlestick formation on the daily chart shows a bit of sell-force rejection, with an important shadow to the upside. The US ISM Non-Manufacturing PMI data released yesterday brought a reading well above expectations, which may force the Federal Reserve (FED) to act more incisively to contain the advance of inflation in the US. This is because the PMI measures the confidence of purchasing managers in the country’s economic future. When this number comes above 50, it usually means that most purchasing managers are optimistic about the economic outlook for the next 3-6 months. Yesterday’s PMI reading is important because it differs from the PMI readings of other countries, which have mostly been close to or below 50. In general, a reading of 56.9 like the US yesterday’s shows that the US economy is heated. As unemployment is low, this may make the FED decide to raise the interest rate to slow down the economy a little and thus contain inflation. From a technical standpoint, as this is the first time the USDMYR has touched the 4.5000 region since 2017, a more significant bearish pullback is likely to start in the coming days. If the price manages to break below 4.4800, it could show more important selling force.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.