The Malaysian Ringgit remains near important support levels and it has shown the ability sustain its bearish trend. The past couple of hours have seen a small bullish reversal take place as the USD/MYR forex pair has been bought. However, speculators who perceive risk appetite will remain stable and perhaps even gain additional momentum may want to use this reversal upwards to position themselves with selling positions.
Developing news in Malaysia about former Prime Minister Najib Razak being found guilty on corruption charges has made headlines today. Its impact on the USD/MYR may be hard to translate, but the Malaysian Ringgit is certainly near important support levels and if values near 4.2450 begin to be tested again, the USD/MYR could find itself traversing interesting values lower.
The 10th of June was the last time the USD/MYR traded below its current values. The 4.2400 level is seen as a critical support level, and it would take stronger selling to achieve this lower target. However, the combination of firm risk appetite in global equities, a guilty verdict via the corruption trial of the former Prime Minister, and a Malaysian government which is perceived to be transparent may increase investor confidence and help the bearish trend of the USD/MYR.
The current value range of 4.2485 to 4.2510 may prove to be a capable selling opportunity for short term speculators. Stop loss limit orders are always important. However, some traders may feel the strong bearish trend will fail and a test of higher resistance near 4.2560 to 4.2600 is possible. Traders certainly have the opportunity to try both sides for speculative positions.
The USD/MYR remains an attractive forex pair to speculate with because of its lack of volatility due to it perceived status as a solid emerging market economy. This morning’s headlines from Malaysia may have caused some over exuberance regarding selling and test of important support levels, but the trading could also highlight the potential moves which could develop over the next couple of days.
The USD/MYR has been consistently producing a bearish trend the past month. Although its trading waters have been choppy the past five days, selling of the forex pair has consistently proven short term support levels appear vulnerable.
Malaysian Ringgit Short Term Outlook:
Current Resistance: 4.2560
Current Support: 4.2450
High Target: 4.2600
Low Target: 4.2400
