US Dollar Forecast: USD/MYR Reversal as USD/PHP Tests 2013 Support
USD/MYR, USD/PHP, Malaysian Ringgit, Philippine Peso - Talking Points
- US Dollar facing selling pressure versus MYR, PHP
- USD/MYR may extend declines on bearish formation
- USD/PHP attempting to fall under 2013 rising support
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USD/MYR Technical Outlook
The Malaysian Ringgit could be on the verge of extending gains versus the US Dollar, but the USD/MYR uptrend still holds looking back to the middle of March. On the daily chart below, the US Dollar has closed under a near-term rising support line from July after negative RSI divergence showed fading upside momentum. This may pave the way for a retest of September lows at 4.1630.
More worrying for the Greenback is that the currency pair could yet confirm a brewing Head and Shoulders bearish reversal pattern. The right shoulder has left behind a key range of resistance between 4.1950 and 4.2000. Taking this psychological barrier out would invalidate the candlestick formation. Otherwise, a daily close under 4.1630 may lead to a retest of what could potentially be a rising support line from March.
USD/MYR Daily Chart
The US Dollar is also facing selling pressure against the Philippine Peso, and it could pick up pace in the near-term. On the daily chart, USD/PHP continues its descent since the Bearish Engulfing candlestick pattern back in August. Since then, the pair has taken out a couple of key support areas. The first is a range between 51.59 – 51.69 which incorporates lows from May 2018.
USD/PHP Daily Chart
More interesting is that USD/PHP is once again attempting to push under a long-term rising trend line going all the way back to 2013 – see weekly chart below. This leaves prices facing the next level of support around 51.25 which if taken out, may pave the way for a retest of the July low at 50.79. Otherwise, closing above descending resistance from August would overturn the near-term downtrend – red line on the chart above.
USD/PHP Weekly Chart
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--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.