- It’s easy to see that the US dollar is still flat on its back against the Malaysian ringgit.
- Ultimately, we are hanging around the 4.44 region, an area that previously has been supported a couple of different times.
- With that being said, the market is likely to continue being noisy, and therefore I think you have to be very cautious.
Emerging Markets
Keep in mind that emerging markets around the world are going to be especially sensitive to any type of global slowdown, so if we get some type of major “risk off move”, we could see this pair shoot straight up in the air as money flows into US Treasury markets. However, there is a huge bed going on that the Federal Reserve will cut rates, and if that ends up being the case, it does make a certain amount of sense that we would see the US dollar suffer a bit. Ultimately, I think this is a pair that is oversold, and I would anticipate some type of bounce, but we have a couple of levels to pay attention to.
Top Regulated Brokers
There is resistance above the 4.50 level, and if we can get above there, then the market could rally toward the 4.55 level, followed by the 4.60 level. In the 4.60 area, you would be meeting up with the 50-Day EMA, which of course will have a lot of technical influence as well. On the downside, if we were to break down below the 4.40 level on a daily close, it could open up another downward leg, and I believe that the 4.35 level would be targeted rather quickly.
More likely than not, we probably see a lot of consolidation in this area as we try to determine whether or not we have formed a base or if it is some type of area that we are simply building up more inertia to the downside. The next couple of days could be crucial, and I suspect that we will have to watch what happens with the US dollar around the world. For what it is worth, the PPI numbers during the early trading on Tuesday in the United States were lower than anticipated.
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