200-DMA Gives Way Despite Positive Assessment Of Revised Budget 2023

Spot USD/MYR soared overnight, ripping through its 200-DMA. The key moving average successfully resisted bullish pressure in December, presaging a renewed sell-off which took the rate to multi-month lows in Jan/Feb. A return above the 200-DMA represents a notable victory for bulls, albeit the RSI has now moved into overbought territory. The pair finished the session at MYR4.4785, up 433 pips versus the previous close.

• The ringgit slumped as hawkish Fed bets and wobbly risk sentiment applied pressure to emerging Asian FX. The likes of KRW, PHP and MYR suffered the heaviest losses in the space.
• Lingering impact of the revised budget 2023 tabled by PM Anwar last Friday may have also filtered through into price action, limiting the ringgit's decline. The general assessment of the spending plan has been positive, with the new tax proposals deemed less severe than expected.
• Elsewhere, the most actively traded palm oil contract eased from a seven-week high during before staging a firm rebound into European hours. Bets on recovery in Malaysian output may have weighed on crude early doors, with the government cutting its CPO price forecast in a report released alongside the federal budget.