Lower price action attained the past day in the USD/MYR has correlated to the broad Forex market. The USD/MYR is near the 3.9850 realm, and was around the 4.0350 mark when trading began on Monday. The Iranian ceasefire has helped ignite better outlooks and improved the strength of the (already strong) Malaysian Ringgit. However, in the past handful of hours, Forex has seen some headwinds start blowing via concerns about the fragility of the Iranian ceasefire are considered.
At the start of the Iranian war the USD/MYR was near the 3.8800 vicinity, which was a long-term low for the currency pair. The Malaysian Ringgit has been one of the stronger currencies, particularly among emerging market economies the past year. Financial institutions have been quite comfortable with the long-term bearish trend of the USD/MYR. However the past five weeks of trading have caused vast volatility.
Price Action of the USD/MYR and Speculation
The USD/MYR is not a widely traded currency pair. The volumes remain light and day traders considering pursuit of the USD/MYR typically need patience to wager. However, the past handful of weeks have provided unusual choppiness in the broad Forex market and the USD/MYR has seen sharp price action too. The velocity lower the past day and a half in the USD/MYR was substantial, even if the move was actually rather limited per real financial calculations.
Traders of the USD/MYR now have an interesting question facing them as the weekend approaches. Barometers such as WTI Crude Oil which saw optimistic lower values emerge the past day and a half, have suddenly started to see another escalation in value as worries about the Iranian ceasefire have started to make large traders nervous again. Will this translate into anxious Forex price action too?
Technical Trading vs. Behavioral Sentiment
The USD/MYR has been a solid bearish long-term play. The past handful of weeks have seen a push upwards, but the currency pair remains within historic lower boundaries.
Intriguingly the USD/MYR is still above pre-Iranian war values too, which may lend itself to technical wagers on lower price action.
However, because of conservative outlooks which may not be comfortable about completely optimistic outcomes regarding the Iranian war quite yet, there are reasons for USD/MYR traders to remain cautious over the near-term.
While it might be tempting to continue to look for downside price action, traders need to monitor the broad markets including equity indices and the price of oil.
If nervousness builds going into the weekend this may keep the USD/MYR within rather choppy terrain over the next day.
USD/MYR Short Term Outlook:
Current Resistance: 3.9880
Current Support: 3.9810
High Target: 4.0150
Low Target: 3.9680