FOREX: USD/MYR Analysis

In last week’s column I wrote the following: ‘the sideways correction, as viewed right now, has some downside implications to it. A total reversal to the downside is not expected, but corrective action to around 3.4830 is reasonable and probable.’

As it turns out, support around 3.4830 held quite well, with only a couple of intraday spikes going slightly lower, with one daily close as low as 3.4821. For the last four days the market has had higher highs.

USDMYR has moved up to a relatively minor one month old down-sloping trend line. Without question this currency pair is moving into a zone of more resistance from 3.53290 to 3.5671, but there is a good chance that current momentum will carry this pair at least that high and possibly as high as 3.5980 within the next few sessions.

A failure of support around 3.4820 would bring other levels of support into focus.


Daily USD/MYR chart as at 28 May 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

NextView RSI – rising, in positive territory
Short Term Stochastic – rising
EMA5 – this very short term moving average is rising strongly
TL – the one month old, down-sloping trend line.
R1 – nearby resistance at 3.5670
R2 – 3.5980
R3 – 3.6550
S1 – zone of support from 3.4774-3.4670
S2 – 3.4350

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.