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Day traders are free to believe the USD/MYR remains in overbought territory and the currency pair can move lower. The problem is picking exactly when this is going to happen. Last Friday, during the U.S banking holiday, the USD/MYR dropped to the 4.0600 vicinity, but quickly found some incremental buying entering the Forex sphere.
The USD/MYR actually remains in a lower realms from a long-term perspective and the currency pair is now trading near the 4.0740 level. A high of nearly 4.0870 was seen momentarily this past Monday, but the USD/MYR remains in sight of its lower realms. While the 4.0000 for the moment may seem like a distance away, the sentiment that this is where the currency pair will eventually find its value again is perhaps correct. However, there are obstacles in the way for the moment.
Cautious Conditions in the Broad Forex Market
The USD/MYR is correlating to the broad Forex market in which USD centric strength continues to dominate. Stronger moves by the major currencies paired against the USD have found it tough to sustain momentum. While notions that the U.S Federal Reserve may not raise its Federal Funds Rate is coming into vogue, this has not equated into a selloff of the USD in a widespread manner.
The answer for this is likely simple. There has been renewed military escalation in the past couple of days between Iran and the U.S which is working like a cautionary wind in the broad Forex market. WTI Crude Oil which was within sight of the $68.00 price range on the 6th of July is now again above $73.00. The saber rattling between Iran and the U.S are likely to make financial institutions somewhat nervous about near-term outlooks. Though for the moment the USD/MYR has not crept too far higher, and this remains a signal for bearish speculators probably.
Developing News from The Middle East and Wagering
If the news flow from the Middle East remains at the same level, but does not escalate into widened conflict in the next two days, it may seem likely financial institutions will remain rather calm.
Having said that, speculators looking for wagers higher may believe that the coming weekend could develop into heightened military escalation, if that happens the USD/MYR could certainly move higher.
Yet, if tranquility is attained or at least promised, it is possible the USD/MYR could again try to move lower and that the 4.0600 levels and other depths may be wagered upon by large players.
For the moment day traders need to be very careful and understand global conditions are anxious, so risk management should be a top priority when all Forex wagers are made the remainder of this week.
USD/MYR Short Term Outlook:
Current Resistance: 4.0765
Current Support: 4.0720
High Target: 4.0880
Low Target: 4.0590