Extra gains in USD/MYR should meet a tough barrier at 4.6570 in the near term, suggests Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

“Last Monday (22 May, spot at 4.5330), we highlighted that ‘the sharp and swift rise in USD/MYR appears to be overdone but it could test 4.5600 first before the risk of a reversal increases’. We did not anticipate USD/MYR to lift-off and rocket to a high of 4.6360 on Friday. USD/MYR subsequently pulled back from the high and closed at 4.5970 ( 1.34% for the week).”

“The steep and swift rally appears to be overextended but with no sign of easing just yet, USD/MYR could rise further even though the chance of it breaking above 4.6570 this week is not high. On the downside, a breach of 4.5550 (minor support at 5.5720) indicates the current strong rally is ready to take a breather