The Indonesian Rupiah finds itself near important resistance levels short term, but the two last weeks of trading have produced a rather tight range. Resistance for the USD/IDR appears to be the 14260.00 level, but trading for the moment has been rather strangulated near the 14200.00 juncture. Speculators who believe risk appetite may decrease in the coming days may see an opportunity to buy the USD/IDR and seek a breakout above current short term resistance levels.
The past two weeks of trading for the USD/IDR has produced a dominant range between 14000.0 and 14200.0. Traders however will notice when technical charts are looked at that price action has shown an ability to test the waters above the 14200.0 juncture and recently touched a mark of 14260.0. This leaves the door open to further tests upward and if a speculator can take a position around the 14200.0 or below they may believe buying the USD/IDR short term carries a reasonable opportunity to profit upwards.
Recent support around the 14100.0 proved an inflection point and caused a buying reversal. Current market conditions in global equities appear fragile and if sentiment remains cautious in major stock indices, this could trigger investors into buying the US Dollar against many emerging market currencies including the Indonesian Rupiah.
The three-month trend of the Indonesian Rupiah remains strong, but the USD/IDR has not shown much ability to break down through support levels near the 14000.0 juncture. The stronger values for the Indonesian Rupiah were tested in early June and they remain clearly in sight, but questions regarding risk appetite as concerns about a ‘second wave’ of coronavirus are causing worries in the financial markets today and may continue to cause problems tomorrow.
The USD/IDR remains an attractive speculative trade because its range has not been extremely volatile in the past couple of weeks. The mid-term outlook for the Indonesian Rupiah still looks favorable and it will likely maintain its current stance, but short term vulnerability highlights the possibility of a decrease in value for the emerging market currency if a wave of poor sentiment takes hold again in forex and creates a further spark for buying the USD/IDR based on risk-averse principles.
Indonesian Rupiah Short Term Outlook:
Current Resistance: 14260.0
Current Support: 14120.0
High Target: 14300.0
Low Target: 14000.0
