- I'm watching this pair closely because we are hovering right around a major technical area that I think you should be watching yourself.
- The US dollar is hanging around the 4.50 Malaysian ringgit level, but it is also sitting right there with the 200-day EMA.
It's also worth noting that the 50-day EMA is rising as well, getting ready to fire off the so-called Golden Cross. This is a market that's a little bit out there as far as being exotic, but it is one worth watching because it's another way to play Asia. While everybody is focusing on the Japanese yen, they're missing the big picture. As things stand right now, it looks a lot like the Chinese mainland might be heading for a pretty significant slowdown. And this does have a knock-on effect in other places like Malaysia, Indonesia, Singapore, et cetera.
Top Regulated Brokers
USD Against Minor Asian Currencies
So, with all of this, I've been watching the US dollar against a lot of these smaller Asian currencies. And this one is particularly intriguing because it's at such an obvious spot. You could also pay attention to this big barrier here at about 4.8 and draw a Fibonacci retracement level. And you can see that we're right around that 61.8 Fibonacci ratio as well. So, if we can break that, at basically 4.53, my general observation over the years has been that once you break the 61.8% Fibonacci retracement level, you normally get a round trip. This would make sense in the current environment with the Federal Reserve unlikely to cut rates anytime soon. Inflation in the United States is pretty strong.
Now, PPI did come out flat during the trading session on Tuesday, but CPI is what really will matter, and that'll be Wednesday. If that comes out hotter than expected, that could be the trigger for this pair to go higher. I'm not looking to short this pair right now. I would revisit that somewhere around 4.40, but right now, I'm looking to see a shot higher that I can take advantage of.
Ready to trade our daily Forex forecast? Here’s a list of some of the top forex brokers in Malaysia to check out.