- USD/IDR takes offers, extends pullback from weekly top after the key data.
- Indonesia Q1 GDP matches forecast on YoY, recovers on QoQ.
- Covid worries in Asia battle absence of China, Japan.
USD/IDR stands on the slippery ground near 14,420, down 0.44% intraday, following Indonesia Q1 GDP release during early Wednesday. Although welcome prints of the first quarter (Q1) economic growth please the pair sellers of late, the coronavirus (COVID-19) woes in Asia and holidays in Japan, as well as China, test the latest downside.
Indonesia’s Q1 GDP recovered from -1.04% expected and -0.42% prior to -0.96% on QOQ. However, the YoY figures seem more upbeat while matching the -0.74% forecast compared to -2.19% prior.
It’s worth mentioning that Indonesian policymakers have been optimistic of late despite downbeat inflation figures. That said, the Asian diplomats have recently planned to cut the fiscal deficit while the Bank Indonesia (BI) stood pat in the latest meeting.
On a broader front, the virus-led pessimism keeps the rupiah pressured but an absence of Asian majors restricts the currency’s losses. However, vaccine optimism and pre-NFP cautious sentiment offer a sluggish period for the USD/IDR trader moving forward.
Against this backdrop, S&P 500 Futures print mild gains while the US dollar index (DXY) trims the previous day’s gains.
Looking forward, US ADP Employment Change and ISM Services PMI for April become the key to watch while risk catalysts shouldn’t be missed as well. However, major attention will be given to Friday’s US jobs report for clearer direction.
Read: US ISM Services PMI April Preview: Inflation readings remain key as recovery gains strength
Technical analysis
USD/IDR sellers need a clear downside break of 200-day SMA, around $14,420, to attack April’s low of $14,378.50. Meanwhile, a three-week-old resistance line near $14,520 guards the quote’s short-term upside.
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