Global risk sentiment remains fragile early today on the broad markets. The USD/IDR has traded in a rather polite range the past couple of days and from a technical view appears to be a speculative buy as the week starts. Bias should always be pushed to the side by traders, but a good sense of knowing existing potential behavior can prove profitable for short term speculators. Equity indices around the world have put in nervous results the past few trading sessions, fragile unease among investors and their financial institutions may continue to surface.
While the USD/IDR has not broken through important resistance, what is becoming evident – if your perception is that the global markets are nervous – is that a stronger technical support ratio has developed for the Indonesian Rupiah the past couple of trading sessions. Current support levels look to be around 14180.0. Why is this important? Because support levels prior to this value seem to have been near the 14100.0 and a higher support juncture indicates if the ‘new’ support level gets tested it could see a flourish of USD/IDR buyers step into the market seeking reversals that could put pressure suddenly on resistance.
The resistance levels for the USD/IDR have not actually changed the past couple of trading sessions. Again, it is important to say my speculative outlook is largely affected by perceptions of the equities and forex market. Admittedly, my inclination leans towards the safety of the US Dollar in the short term, this to protect assets from volatile asset fluctuations if downward pressure on global equities remains a potential problem early this week.
Resistance around the 14260.0 mark appears to be a target for traders. If the broad markets do stay nervous and global financial institutions begin to seek safe havens like the US Dollar, it stands to reason the Indonesian Rupiah could lose value short term. The question is when and if this is going to actually happen?
If the forex markets become volatile with growing unease due to suspicion worldwide economic health still has many hurdles to jump and future results are unknown, the logical step for many financial institutions will be to buy the USD/IDR. The Indonesian Rupiah could feel the effects of fragile sentiment and its current resistance levels become vulnerable as a search for new value targets up to and above the 14300.0 are targeted.
Indonesian Rupiah Short Term Outlook:
Current Resistance: 14260.0
Current Support: 14180.0
High Target: 14300.0
Low Target: 14120.0
