USD/MYR Analysis: Higer Elevation Could Bring Out Speculative Selling – 07 November 2024

In early trading this morning the USD/MYR touched highs not seen since the middle of August, this as the 4.4200 ratio was approached, but a slight reversal lower was sparked a bit later.

The USD/MYR has dealt with risk events galore like all other Forex pairs the past handful of weeks, climaxing with the U.S election on Tuesday and yesterday’s clear victory for Donald Trump. To make the week extra memorable, the U.S Federal Reserve will take center stage later today and announce its Federal Funds Rate decision which is expected to include a rate cut of 0.25. The USD/MYR is near 4.4035 as of this writing.

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The USD/MYR has experienced a sharp bullish streak like almost all major Forex pairs since the end of September. The USD/MYR was trading near the 4.1000 level on the 30th of September. However the climb upwards has been based on risk adverse trading taking hold of financial institutions, and this morning’s high in the currency pair shows behavioral sentiment is still nervous and likely contemplating what the mid-term holds.

U.S Federal Reserve and Near-Term Speculation

The USD/MYR looks overbought, but because nervous trading remains prevalent in the marketplace, speculators who are attracted to betting against the strong bullish trend which has emerged may find they are standing in front of an incoming train. The USD/MYR performed well via its bearish move lower until the end of September, but this morning’s apex values suggest more choppiness could be seen in the near-term.

Yes, the U.S Federal Reserve is expected to cut their interest rate today, but financial institutions now have to deal with President-elect Donal Trump who has been given a clear mandate for change. The question financial institutions are asking is what those changes may be. It is not known exactly, except to say Asian commerce with the U.S is certainly going to be effected particularly via tough business negotiations with China. While Malaysia is outside of that immediate circle, it is still close enough to feel possible repercussions.

USD/MYR Outlook and Potential Volatility

Outlook in the USD/MYR will be nervous for a little while longer. Yet the USD/MYR still appears to be reaching overbought territory particularly with the possibility of the Federal Reserve trying to remain dovish over the mid-term. But the Fed has to speak later today and what it will say is not known, because the U.S central bank now has a new force coming in the White House that they will have to deal with too.

Day traders need to remain cautious, speculative conditions may stay volatile today and tomorrow.
Traders tempted to sell the USD/MYR should be cautious, because the trend higher may stay durable if financial institutions remain nervous about the outlook for Malaysia and the new President-elect.

USD/MYR Short Term Outlook:

Current Resistance: 4.4060

Current Support: 4.4000

High Target: 4.4320

Low Target: 4.3750

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.