The European Club Med countries’ debts issues and Chinese government rein on credits last week extended the current atmosphere of risk aversion, which boosted the US Dollar and Yen. This week, the Fed raising the discount rates from 50 to 75 bps which imply of loosening monetary policy in US boosted the US Dollar.
The Ringgit against the US Dollar was not affected by the risk aversion sentiment of last week, but this week Fed moved has a slight reaction on the USDMYR.
The MYR has been moving downward within the downtrend line, from a high of 3.4541 to a low on 17th February at 3.3830. USDMYR was supported at 50 % retracement of swing low at 3.3276 to swing high at 3.4541.
From the support, it reacted upward and met resistance of the downtrend line and 60 EMA at 3.4217 .A doji and then a bearish harami candles were formed.
Given that the blue lag has crossed the 85 level from above and the BB Macd dots were tagging the top blue line and testing the zero line, USDMYR is expected to drift downward testing support at 3.830 tis coming week.
