MYR: Due for a rebound!

After a depreciation of 5-6% over the past 2 months, MYR is set to test its technical support. The SGD-MYR chart shows that the SGD is rising against the MYR in an upward channel. The recent weakness in MYR has pushed the SGD to the upper boundary of that channel. For political reason, I do not think it is acceptable for SGD to break above the level of RM2.70. I expect BNM to support the MYR in order to keep SGD-MYR within the upward channel (or not exceeding the 1 SGD = 2.70 MYR.


Chart 1: SGD-MYR's weekly chart as at Dec 15, 2014 (Source: XE Currency Converter)

Similarly, I do not expect MYR to recover lost ground against the THB. MYR is now hanging onto the support of 9400.


Chart 2: MYR-THB's weekly chart as at Dec 15, 2014 (Source: XE Currency Converter)

MYR has however strengthened against the JPY. That's because JPY has weakened substantially since August. Notwithstanding the extremely sharp drop in the value of JPY, it is good to note that MYR-JPY will be coming up against a strong resistance at 36 (or 1 MYR = 36 JPY). The weakness of the JPY will be covered in another article.


Chart 3: MYR-JPY's weekly chart as at Dec 15, 2014 (Source: XE Currency Converter)

All in all, I believe that our MYR is poised for a technical rebound. This could coincide with a temporary bottom for our market, which had been badly mauled over the past 2 months. Where will the bottom be? From the market action today, it seems likely that the 1700 psychological support may not hold. Let's hope that 1600 psychological level will stop the carnage!


Chart 4: FBMKLCI's weekly chart as at Dec 15, 2014 (Source: BTX)

Note: 

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, FBMKLCI, MYR, SGD, THB and/or JPY.