The Secret Currency War Series:-  Is  Ringgit Going To Be Chewed Up By The Dogs ?

Regardless what the politicians say/reassure/guarantee, I think the global currency war may have already secretly begun. Ringgit is one of those "shining" candidates.

Before going into the chart reading details, I have to clarify here since the Ringgit is smaller in value than the USD, so whenever we see the prices rising, it means the Ringgit is actually depreciating. On the other hand when prices are falling (as like the last few months), it is appreciating. So when I say it is bullish, it actually mean the Ringgit is/will be depreciating and vice versa.



At the weekly chart , the Stochastic has already crossed above its 20's level while the MACD has a positive cross up. Both offer an initial buy signal. Prices have also managed to closed above the lower Bollinger Band and depend on this Friday's closing, we may even see it closing above the middle band which is flashing another buy signal. The middle band is effectively the 20 period moving average, a much watched moving average by many traders, hence its importance.  The D- is fast dropping and may be crossing below a rising D+ which will confirm a change in the cycle from bear to bull.  The falling ADX from above D- confirms the end of the prior bear trend.

An important chart formation here is the presence of a bullish divergence where prices have been falling to new lows while the MACD and Stochastic registering higher troughs. This is telling us whatever bears have been doing is merely a lot of BS - they in fact have exhaust their resources to push prices further down.

An important item that keeps me maintaining a bit caution is the distance of the MACD with its zero signal line. I actually would prefer to see the MACD nearer to its zero line to be blissful.

 

The Ringgit daily chart is really exciting as there is also a very nicely formed bullish divergence between a series of lower lows and higher MACD's troughs. The Stochastic has already crossed above its 50's signal line which I usually take it as a more confirming buy signal. The MACD is beautifully crossing above its zero signal line which is also a more confirming buy signal.  The most powerful confirming signal comes from a rising ADX that is crossing up above a falling D-. This is telling us a strong trend may be in formation.

Price yesterday had tested a new high but did not manage to close around there but instead went back down and close at the same level as its recent fractal high of 3.137. If it manages to close above that level, I am taking it as the final go, go, go signal.

It is because of the presence of bullish divergence at both the daily and weekly chart, I am reading this NOT as a mere correction or retracement BUT as a major terminal point for the Ringgit. It means that Ringgit will start depreciating strongly for the next few months to come.

There is another even more interesting item that may be developing at its monthly chart. I do not usually pay much attention to monthly charts as I am a short/intermediate term traders. But as in the Ringgit case, I notice the Stochastic may be turning its corner at below the so-called "oversold" zone and the MACD has also started to turn around though it is still negative. Of course I would have to wait for the last trading day at the end of the month to be able to correctly read the monthly chart. If both the indicators do really successfully turn, then the Ringgit really may be going into one of those nasty depreciating cycle.

Of course this is NOT what our politicians or bureaucrats have been telling you in the media .