USD/IDR seesaws near 6-week low, Indonesia Retail Sales in the spotlight
|- USD/IDR declines to the lowest since July 31.
- Sellers ignore domestic fundamental weakness amid an overall pullback in the USD.
- July month Indonesia Retail Sales grabs the market’s immediate attention.
Although no shift in Indonesia’s fundamental weakness has emerged off-late, the USD/IDR pair drops to multi-week low while trading near 14,030 amid Tuesday’s Asian session.
The US Dollar’s (USD) latest pullback following Friday’s downbeat Nonfarm Payrolls (NFP) could be considered as the key reason for the quote’s declines. Also adding to the Indonesian Rupiah (IDR) strength could be the trade optimism surrounding the US-China trade deal due to the nation’s export-driven economy.
While the White House Adviser Larry Kudlow has said that Chinese Deputies will visit the US ahead of the major US-China talks in October, the US President Donald Trump recently said in a rally that they will talk with China in next week.
Investors will now focus on July month Retail Sales figures from Indonesia after the earlier readings of Indonesia Consumer Price Index (CPI) and Consumer Confidence have already pushed the Bank Indonesia (BI) towards expecting only 5% growth rate for 2019. The Retail Sales previously contracted by 1.8% in June.
Technical Analysis
Unless bouncing back above August 23 low near 14,115, chances of the pair’s recovery to 50-day exponential moving average (EMA) level of 14,170 and subsequent rise to 14,350 seem less expected. As a result, sellers will wait for a downside break of 14,000 round-figure to aim for July month low 13,884.
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