- USD/IDR is struggling to beat the 4-hour 50-candle moving average for the second day.
- The IDR could lose altitude in the near-term on speculation Indonesia’s central bank is set to begin a new easing cycle later this year.
USD/IDR’s corrective bounce from the April 17 low of 13,990 is struggling to beat the resistance of the 4-hour hart 50-candle moving average (MA) of 14,084. That descending average had worked as a stiff resistance yesterday.
The progressive incumbent leader Joko Widodo won a second term as Indonesia’s President last week, sending the IDR down to two-month highs.
The IDR, however, has come under pressure this week, possibly due to speculation that Indonesia’s central bank would begin a new easing cycle later this year.
Many analysts, however, believe that even after rate cuts, the Indonesian government bonds would offer attractive returns in real terms compared to their US counterparts. As a result, the downside in the IDR could be limited.
Indonesia’s central bank is seen holdings its 7-day reverse repurchase rate at 6 percent this Thursday, according to all 23 analysts polled by Reuters.
Pivot points
