Investors are waiting for the much-promised recovery in the MYR. They
came to that conclusion after seeing the USD-MYR currency pair stick at
4.20 for the past 3 months. From Chart 1, we can see that USD-MYR could
be tracing out a 3-fan uptrend formation.
Chart 1: USD-MYR's weekly chart as at Oct 24, 2017 (Source: Investing.com)
The stability in the USD-MYR exchange rate belied the strengthening of MYR. The stability of USD-MYR is due to a rebound in the US Dollar Index. That index, which is moving within an expanding triangle, has recently tested the lower line and is now recovering. See Chart 2 below.
Chart 2: US Dollar Index's weekly chart as at Oct 24, 2017 (Source: Stockchart.com)
A better indication of the strengthening of MYR is shown by the potential breakdown of the uptrend of SGD-MYR exchange rate. From the chart below, we can see that SGD-MYR is trading just below the uptrend line at 3.15.
Chart 3: SGD-MYR's weekly chart as at Oct 24, 2017 (Source: Investing.com)
If MYR continues to strengthen against SGD - especially if it goes below the 3.10 level - we may soon see a trend reversal. Weak MYR has been a boon for exporters and a loss for importers. That may soon change.
http://nexttrade.blogspot.my/2017/10/myr-where-is-promised-improvement.html
