CPO, WTIC, USD Index & USD-MYR: All Looking Toppish

CPO (closed at RM3220 today) looks toppish on the weekly and daily charts. If CPO drops below RM3114, Parabolic SAR (SAR stands for 'stop-and-reversal' indicator) would move above the CPO price and signal a reversal in CPO prices. This may coincide with a strengthening of MYR.


Chart 1: CPO's weekly chart as at Jan 10, 2017 (Source: ifs.marketcenter.com)


Chart 2: CPO's daily chart as at Jan 10, 2017 (Source: ifs.marketcenter.com)

WTIC also shows signs of weakness. It is likely that WTIC may pullback towards the uptrend line, SS at USD46.


Chart 3: WTIC's daily chart as at Jan 9, 2017 (Source: Stockcharts.com)

Rising crude oil and crude palm oil prices over the past few weeks failed to support MYR. That's because USD index continued to strengthen. Despite bearish divergence in the RSI and MACD, USD index is expected to continue to trend higher since it broke above the range of 93-101.


Chart 4: USD Index's daily chart as at Jan 9, 2017 (Source: Stockcharts.com)
 
A rising USD index will likely to drag USD-MYR higher. However, we can see that USD-MYR has been well-checked by the horizontal resistance at 4.47-4.48. Recent Bank Negara counter-measures and firmer prices for CPO & crude oil could have counter-balance a rising USD index and kept the USD-MYR below 4.50. If Trump's ascendancy to the US Presidency on January 20 were to unnerve in the market, this could well lead to a correction in USD index and a pullback in USD-MYR. However, USD-MYR is unlikely go below the 4.20 mark in the near term.


Chart 5: USD-MYR's daily chart as at Jan 10, 2017 (Source: Stockcharts.com)