Since early April, USDMYR has been trotting along the descending channel A-B, and on Tuesday the upper resistance line was penetrated. The penetration occurred with a golden cross of 20 and 89 EMA. Price manage to penetrate the 200 EMA on Thursday as US dollar strengthened upon investor’s sentiment for risk aversion with stock markets plunged downward. Friday with an expected favorable employment figure in US pushed the pair above 365 EMA.
The penetration of the upper resistance line met the target price at 3.2714 and by the end of the week the pair reached the 61.8% fibo retracement.
Putting the last three days ‘ uptrend, we are witnessing a natural correction following an aggressive downward `trend of the pair since last February.
This coincided with the greenback’s impressive rally through the first four sessions of the week – representing the best run for the benchmark since the sharp reversal back in mid-December. But on the last day of the week, the greenback on a daily basis, the dollar’s performance was disappointing. If we were to ignore the events of the rest of the week, the currency suffered its biggest net loss in two months.
With USDMYR currently at overbought position I expected the pair to test support at 3.25. The next support is at 3.20. Any break above 3.30 is expected to meet resistance level at 3.34
