OCBC strategists Sim Moh Siong and Christopher Wong report that USD/MYR is consolidating near recent highs after earlier in the week, supported by broader USD strength and tender risk sentiment. Geopolitical headlines regarding Iran and energy markets are considered to be the key drivers. They warned that further escalation could trigger risk outflows, weakening high-beta Asian currencies including the MYR, with resistance and support levels clearly in sight.
High beta MYR susceptible to risk-free flows
“USD/MYR. Consolidating near recent highs. USD/MYR consolidated this week after rising earlier in the week. The combination of USD strength and weak risk sentiment weighed on Asian currencies, including MYR.”
“For now, geopolitical headlines dominate and developments remain fluid. If tensions continue to escalate and trigger broad risk-off conditions, leading to further equity sell-offs, emerging market outflows and a rush for USD liquidity, high-beta Asian currencies, including the MYR, may weaken temporarily regardless of oil and commodity dynamics.”
“USD/MYR last seen at 3.9450. The bullish trend on the daily chart remained unchanged while RSI growth was moderate. Bilateral trades likely.”
“Resistance at 3.95, 3.9630 (23.6% fibo retracement from October high to February low) and 3.9865 (50 DMA). Support at 3.9180 (21 DMA), 3.88.”
(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)
