The tight range the past week of trading in the USD/MYR shows that financial institutions remain calm, even as rhetoric from outside influence via the U.S and China continue to be heard regarding tariffs.
The USD/MYR current price of 4.2345 reflects a comfortable equilibrium for financial institutions as they look towards their mid-term outlooks. The currency pair has been able to achieve a rather tight range the past two weeks. The ability of the USD/MYR stay within eyesight, but not challenge lows seen in early May that penetrated the 4.2000 is worth taking into consideration.
It appears USD/MYR traders are willing to maintain and even lean into a weaker USD outlook mid-term, but they also appear cautious and not overly eager to create stronger lower values until more clarity is delivered regarding tariff talks going on between China and the U.S. While the value of the Malaysian Ringgit is contemplated, long-term charts are needed to understand that current USD/MYR ratios are traversing slightly above important support levels.
Speculative Targets and a Tight Price Range
Day traders who want to wager on the USD/MYR need to understand the currency pair faces thin volumes. The USD/MYR also trades only during a certain portion of the day via financial institutions, mostly within Asian banking hours. The spread on the USD/MYR can be wide so speculators need to use entry orders and then have patience as the currency pair moves while a wager is being targeted via a price goal.
The USD/MYR is difficult to trade if too much leverage is being used, and if what appears to be a tight price range is suffering from a wide spread that flirts with targets but doesn’t actually touch the required ratios, it becomes hard to cash out of a trade quickly. Tomorrow the U.S will release its Non-Farm Employment Change numbers, but the USD/MYR will have been closed for trading by then on most platforms.
Trading Perspective and Strategy in the USD/MYR
Traders who want to trade on the outcome of the U.S economic data Friday in the USD/MYR need to make wagers beforehand in most cases, which can lead to disruptive reactions. Or a trader can wait until the USD/MYR opens on early Monday in Asia and try to look for price velocity following its opening.
- The reason why many financial institutions working in the USD/MYR may be thinking a weaker USD will emerge against the Malaysian Ringgit, could be a viewpoint the Fed may consider lowering its interest rate in July by 25 basis points.
- Also the potential of an agreement between China and the U.S may make some optimistic.
- Traders should not get overconfident however.
- The tight range of the USD/MYR is useful to speculate on, but it can also lead to a misunderstanding, because what appears to be a closely held price realm can be difficult to navigate.
USD/MYR Short Term Outlook:
Current Resistance: 4.2380
Current Support: 4.2270
High Target: 4.2520
Low Target: 4.2230
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