The Indonesian Rupiah has accomplished a valid strong trend and seen the USD/IDR be sold consistently since the height of the IDR’s weakness in early April. However, late last week gave traders a concise picture regarding the nature of trading. No currency trades are in a vacuum when paired with the US Dollar. When US stock indices sold off in mass last Thursday most forex pairs suffered losses against the US Dollar and the Indonesian Rupiah was not immune to a loss in value.
Yes, the overall trend of the Indonesian Rupiah remains strong and optimistic, and sellers of the USD/IDR do not have reasons to jump off of their short positions yet. However, if early outlooks on the US futures markets prove correct this morning and indices such as the S&P suffer losses it is a reasonable perspective to believe the US Dollar will find it's old friends quickly in the short term: safe haven investors.
Indonesian Rupiah speculators typically have a taste for adventure and the next two days will provide an opportunity to test their emotions. Traders should be careful with the amount of leverage they use today and tomorrow, but seriously consider a short term buy of the USD/IDR. Early resistance today appears to be 14100.0 for the Indonesian Rupiah and speculators could not be faulted for venturing into buy positions around the 14000.0 juncture if it is available.
Short term support for the Indonesian Rupiah appears to be around the 13900.0 mark which could provide traders with a nice safety net regarding risk management, provided careful leverage is used. The Indonesian Rupiah while providing plenty of strength the past few months as it has climbed back to nearly normal trading ranges. However, a short term speculative buying position of the USD/IDR by those seeking a quick opportunity should be considered. If resistance of 14100.0 is broken and the Indonesian Rupiah continues to weaken against the US Dollar traders may set their sights on the 14200.0 level. What traders need to keep in mind today is the US futures markets and early results on the indices from Wall Street. Selling in the US markets if it becomes heavy would act as a lynchpin for US Dollar buyers.
Indonesian Rupiah Short Term Outlook:
Current Resistance: 14110.0
Current Support: 13900.0
High Target: 14250.0
Low Target: 13850.0
