USD/IDR: A breakdown of 14,000 looks unlikely – UOB

Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted that USD/IDR is unlikely to breach the key support at 14,000 for the time being.

Key Quotes

“We highlighted last Monday (11 Oct, spot at 14,210) that ‘downward momentum has increased’. We added, ‘a break of September’s low at 14,170 would not be surprising but the next major support at 14,120 is unlikely to come under threat’. We underestimated the downward momentum as USD/IDR cracked both 14,170 and 14,120 (USD/IDR dropped to 14,050 on Friday before extending its decline earlier today). Not surprisingly, the rapid drop is severely oversold but with no signs of stabilization just yet, further weakness is not ruled out.”

“That said, in view of the deeply oversold conditions, a break of the round-number support at 14,000 appears unlikely. On the upside, a breach of 14,140 would indicate that the current weakness has stabilized.”