Despite the USD/RM’s recent rebound from the lowest level since the managed-float system was introduced, the USD/RM currency market is still stuck within an obvious downtrend channel. We said before that the USD could rebound anytime soon as it was trading in the vicinity of the support line of the downtrend channel. Anyhow, the rebound thus far is still being viewed as a bearish rebound within a downtrend.
With reference to the same downtrend channel drawn in the daily chart many months ago, the USD is expected to continue depreciating against the RM until the channel is violated. Hence, we feel that the USD/RM outlook will remain firmly bearish as long as USD/RM continues to trade inside the downtrend channel.
It looks like the USD/RM has established a rather strong support floor at above the RM3.07/ USD level, which is the lowest point since the introduction of the managed-float system. We will see if the USD could eventually get itself out from the downtrend channel after building a new support base. If not, the USD’s downtrend will eventually extend much lower and when the RM3.07 / USD support floor which took about two months to construct is violated, it is likely to face another round of selling pressure.
From the current level, there is immediate resistance at the RM3.17/USD level, followed by the RM3.19/USD level. To the downside, look for an immediate support at the RM3.12/USD level, followed by the RM3.10/USD level and the RM3.07 / USD level.
With reference to the same downtrend channel drawn in the daily chart many months ago, the USD is expected to continue depreciating against the RM until the channel is violated. Hence, we feel that the USD/RM outlook will remain firmly bearish as long as USD/RM continues to trade inside the downtrend channel.
It looks like the USD/RM has established a rather strong support floor at above the RM3.07/ USD level, which is the lowest point since the introduction of the managed-float system. We will see if the USD could eventually get itself out from the downtrend channel after building a new support base. If not, the USD’s downtrend will eventually extend much lower and when the RM3.07 / USD support floor which took about two months to construct is violated, it is likely to face another round of selling pressure.
From the current level, there is immediate resistance at the RM3.17/USD level, followed by the RM3.19/USD level. To the downside, look for an immediate support at the RM3.12/USD level, followed by the RM3.10/USD level and the RM3.07 / USD level.
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