OCBC strategists Sim Moh Siong and Christopher Wong, as cited in both articles, highlight that recent easing in oil prices, a softer US Dollar, and a firmer RMB have contributed to a partial recovery in the Malaysian Ringgit (MYR) [1]. However, the outlook for MYR remains highly dependent on developments in the Middle East, particularly the Iran conflict, which could impact oil supply and shipping routes. The strategists note that if tensions ease and risks to oil production remain contained, the oil risk premium could unwind quickly, supporting further recovery in risk sentiment and MYR [1]. Conversely, if tensions persist, as indicated by Iran's warning to prepare for USD200/bbl oil, risk appetite may stay restrained and MYR recovery could stall [1]. Technical analysis shows immediate support for USD/MYR at 3.9150/80, with further support at 3.90 and 3.88, and resistance at 3.9550 and 3.9760 (50 DMA) [1]. Bullish momentum is fading, and RSI has fallen, suggesting a loss of upward momentum [1].
For USD/CNH, OCBC strategists report that the pair is consolidating near recent lows, with fading bullish momentum as fears of persistently high oil prices and Iran-related risks weigh on broader market sentiment, despite the International Energy Agency's (IEA) plan to release a record 400 million barrels of oil from reserves [2]. A stronger CNY fix has provided some support, but overall risk tone and Dollar direction remain crucial drivers. Technical levels for USD/CNH are noted with support at 6.85–6.8270 (Feb low) and resistance at 6.89 (21 DMA) and 6.9280 (50 DMA) [2]. The strategists emphasize that geopolitical headlines are dominating and driving two-way trades, with RMB relatively steadier compared to other oil-sensitive Asian currencies such as KRW and PHP, which may be under more pressure from oil and sentiment shocks [2].
Both articles underscore the importance of geopolitical developments, particularly in the Middle East, as key determinants for Asian FX performance. While MYR and other oil-sensitive currencies are vulnerable to oil price and sentiment shocks, RMB appears less exposed in the current environment [1][2]. The technical outlook for both USD/MYR and USD/CNH suggests fading bullish momentum and potential for two-way trading, with immediate support and resistance levels highlighted [1][2].
Forward-looking statements from OCBC strategists indicate that the duration and scale of potential oil supply disruptions will be critical for MYR's outlook, and that broader risk sentiment and Dollar direction will continue to matter for USD/CNH [1][2].
CONCLUSION
Geopolitical tensions in the Middle East and oil supply risks are steering Asian FX markets, with MYR and other oil-sensitive currencies facing heightened vulnerability, while RMB remains relatively steadier. Technical indicators suggest fading bullish momentum and potential for two-way trading in both USD/MYR and USD/CNH. The market takeaway is that further developments in the Iran conflict and oil supply disruptions will be pivotal for risk sentiment and currency performance.