USD/IDR: Bears await Bank Indonesia decision to extend downpour beneath 200-DMA


  • Repeated failures to cross 200-day SMA ahead of Thursday’s Bank Indonesia meeting.
  • Mixed data, global recession fears can push BI towards another no rate change decision.

Having failed to cross the 200-DMA, the USD/IDR pair remains on the back foot as it takes the rounds to 14,272 during early Wednesday. While today’s FOMC meeting can act as a major market moves, Thursday’s monetary policy decision by the Bank Indonesia (BI) will be closely observed for near-term trade direction.

Despite upside surprises by the Indonesian inflation and consumer confidence data, sluggish retail sales and GDP figures continue to favor no change in the central bank’s monetary policy offering 6.0% BI rate.

Pessimism surrounding the global trade outlook led by the US-China tussle also weighs on the Southeast Asian economy.

TD Securities holds a dovish view for the Indonesian economy while expecting no change in Thursday’s monetary policy meeting. It says:

BI is edging towards a rate cut amid low inflation and slowing activity, but will likely want to see further signs of IDR stability before pulling the trigger to begin reversing the 175bp of hikes implemented in 2018.

The country’s Finance Minister, Sri Mulyani Indrawati, recently cited fears of global growth due to trade wars to support chances favoring the easy monetary policy from the BI.

On the other hand, the US Federal Open Market Committee (FOMC) is also not expected to alter its monetary policy but may have a higher market impact as trades will have the Federal Reserve Chairman Jerome Powell’s press conference and quarterly economic forecast to follow.

Technical Analysis

Unless breaking 200-day simple moving average (SMA) level of 14,435, the quote continues to signal another visit to 14,150 and 14,000 ahead of aiming to visit the April month bottom around 13,970.

Meanwhile, 21-day SMA can limit immediate upside at 14,307 ahead of highlighting 14,435. Should buyers manage to cross the key SMA resistance, 14,550, 14,620 and 14,662 might become their favorites.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD holds onto highs despite souring mood

EUR/USD is trading above 1.22 but off the highs. US Durable Goods Orders jumped by 3.4% in January, better than expected, and jobless claims surprised with a fall to 730K. Q4 GDP upgraded to 4.1%, as expected. The dollar is down despite falling stocks and rising US yields.

EUR/USD News

XAU/USD drops further to $1770 ahead of critical support

Gold dropped further during the American session and bottomed at $1769, the lowest level since last Friday. The metal erased weekly gains and is back below $1780 as US yields keep rising.

Gold news

S&P 500: Day Ahead Outlook Inflation fears linger as doves hit turbulence

US equity markets look for direction on Thursday with mixed signals leading to steady and slightly lower trade. Inflation concerns haven't gone away as the US 10 year hits another year high at nearly 1.5%.

Read more

Crypto bull run on track amid surge in US inflation expectations

The crypto bull run has taken a breather after the gruesome drop in value at the beginning of this week. Bitcoin led the freefall, dropping from $58,000 to $45,000. Generally, all cryptocurrencies retraced and are now holding above key support levels to prepare for another upswing to new yearly highs.

Read more

US Dollar Index remains depressed below 90.00

The greenback manages to bounce off weekly lows near 89.70, although it keeps navigating a sea of red when gauged by the US Dollar Index (DXY).

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures