USD/MYR 30 minutes
USD/MYR 30 minutesIB Times UK/FXStreet

The Malaysian ringgit fell on 18 July as the shooting down of flight MH 17 on Thursday dragged down local shares and weakened the prospects of foreign flows into the country.

Reports that rebels in eastern Ukraine shot down the Malaysian flight added to the ongoing Israel-Gaza conflict, augmenting the geopolitical reasons that create a more risk-averse global market.

USD/MYR rose to as high as 3.1953 from Thursday's close of 3.1770, further distancing from 3.1653, the ringgit's strongest point in eight months touched on 9 July.

The share price of Malaysian Airlines, which hasn't recouped the losses from the disappearance of flight MH370 in March, fell more than 17% to 0.19 ringgit (19 sen) on Friday after having trended higher since hitting a record low of 0.15 ringgit on 19 May.

Shares of the carrier had been on a steady downtrend after trading as high as 2.18 ringgit in October 2011 and have dropped more than 93% to the 19 May low since then.

Bursa Malaysia, the main share index of Malaysia, was down 8.4% at 05:35 GMT, while the MSCI Asia Pacific index 50 was down 0.21% at 970.43.

The US dollar was also trading broadly higher thanks to the increased safe haven demand following the continued tensions in Ukraine and the Middle East.

The USD index, the gauge that measures the strength of the greenback versus the currencies of the six largest trading partners of the US, rose to 80.57 from Thursday's close of 80.51, holding close to the one-month high of 80.59 touched on Thursday.

USD/MYR Technical Outlook

The pair has been on a downtrend since the start of this year and has dropped more than 5.6% to the 9 July low of 3.16.

Despite the gains since then, the pair is broadly holding the downtrend, suggesting the ringgit has not yet begun a weakening trend.

On the downside, the pair has its next target at 3.1600, the 50% retracement of the May 2013 to January 2014 rally and then comes the very important 3.1350, which is a long-term trend support.

Further south, 3.1100, the 61.8% level, and 3.0700 are the two levels to watch ahead of the May 2013 low of 2.9600.

On the higher side, the pair will first target 3.20, the 38.2% retracement and then 3.22 and 3.24 ahead of the 23.6% level of 3.2600. A break of the same will confirm the reversal of the downtrend.

Further on the topside, the pair will target 3.30 ahead of a retest of the January peak of 3.3513.

USD/MYR Weekly
USD/MYR WeeklyIB Times UK/FXStreet