OCBC strategists Sim Moh Siong and Christopher Wong report that USD/MYR is consolidating near recent highs after an early-week run-up, supported by broader USD strength and soggy risk sentiment. Geopolitical headlines around Iran and energy markets are seen as key drivers. They warn that further escalation could trigger risk-off flows, weakening high-beta Asian FX including MYR, with clear resistance and support levels outlined.

High-beta MYR vulnerable to risk-off flows

"USD/MYR. Consolidation near recent highs. USD/MYR consolidated this week after the run-up in early week. Combination of USD strength, soggy risk sentiments weighed on Asian FX, including MYR."

"For now, geopolitical headlines dominate and developments remain fluid. If tensions continue to escalate and trigger broad risk-off conditions, leading to further equity selloffs, EM outflows and rush for USD liquidity, then high-beta Asian FX, including MYR, can weaken temporarily regardless of oil/commodity dynamics."

"USD/MYR last seen at 3.9450 levels. Bullish momentum on daily chart intact while rise in RSI moderated. 2-way trades likely."

"Resistance at 3.95, 3.9630 (23.6% fibo retracement of Oct high to Feb low) and 3.9865 (50 DMA). Support at 3.9180 (21 DMA), 3.88 levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)