USD/IDR: Still room for further gains – UOB

According to Quek Ser Leang at UOB Group’s Global Economics & Markets Research, USD/IDR could still edge higher, although a tough resistance is located at 14,250.

Key Quotes

“We highlighted last Monday (18 Oct, spot at 14,095) that ‘further weakness is not ruled out’. We added, ‘in view of the deeply oversold conditions, a break of the round-number support at 14,000 appears unlikely”’ While our view was not wrong as USD/IDR did not break 14,000 (low of 14,020), we did not anticipate the sharp and swift rebound from the low.”

“Daily MACD has turned back up quickly but it appears too early to expect a major reversal. That said, there is room for the rebound to extend but a break of the solid resistance at 14,250 (declining trend-line that sits close to the 55-day exponential moving average) would come as a surprise. Support is at 14,080, the low at 14,020 is not expected to come into the picture this week.”