US Dollar Index formed an inside bar pattern on Wednesday that was followed by two consecutive daily loss. Analysts see this week greenback weak performance more of congestion rather than an exhaustion point. It is believed that the last day of the week greenback performances impressive considering the losses were relatively modest as e compare it to the positive performance of the equities market (the S&P 500 rallied 1.7 percent). These two are generally on opposite ends of the risk spectrum; so a negative correlation is a normal state of being.
For the week, Bursa Malaysia as represented by FBM KLCI was on the bullish mood with a slight fall on Tuesday. Bursa performance was creditable in we compare with equity market performance in New York and the rest of the world(MSCI World Index). Since the second week of August, global equity market has been on the downtrend while the Bursa Malaysia registered an uptrend.
The ringgit performance this week was move in-line with USD Index rather than the Bursa Malaysia. Compare to SGD, ringgit strength in the last three days was weaker than SGD.
USD index failed to penetrate above 83.45 cluster resistance (38.2% retracement of 88.70 to 80.08 at 83.37). With a short term top formed, some sideway move should be seen in near term.
USD/MYR last week was more at consolidation phase with the open and close for the week at almost same level. The short term bias is still bearish and immediate support at previous low at 3.124. The next support is at 3.115. On the upside, resistance is at 3.152 and 3.163
