Search ForexCrunch
  • USD/IDR again bounces off 14,710 but the gains capped.
  • Indonesia to ease lockdown restrictions from June 01 despite looming virus risks.
  • Indonesian President Jokowi warns of a second wave of the virus from people returning to Jakarta.
  • US-China tussle also weighs the Asian currency while the greenback bounces off a two-month low.

USD/IDR extends recovery gains from 14,710 to 14,763, up 0.36% on a day, during the pre-European session on Thursday. While the US dollar’s pullback from the lowest since late-March could be cited as a main cause for the pullback, the coronavirus (COVID-19) crisis in Indonesia and the trade/political tension between the US and China adds to the pair’s strength.

As per the official figures from the Indonesian Health Ministry, there have been 686 news COVID-19 cases that propel the total figures to 23,851. Additionally, 55 more died due to the pandemic taking the death toll to 1,473 on Wednesday.

Even so, the government is eager to reopen the economy from June 01 while President Joko Widodo warned about the second wave of the virus spread.

Other than the virus woes, US policymakers’ efforts to increase the hardships of the Dragon nation also heavy the Asian currencies.

Further, the greenback consolidates losses amid increasing hopes of the economic restart. As a result, the US dollar index (DXY) recovers from the eight-week low to 98.97 by the press time.

It should also be noted that the markets’ risk-tone remains positive with the US 10-year Treasury yields stay up around 0.69% and Indonesia’s IDX flashing 1.87% gains to 4,728 as we write.

Although the Indonesian calendar is mostly empty during the week, US data and the trade/political fight with China could offer a busy trading session ahead.

Technical analysis

A 100-day EMA level of 14,860 is in the spotlight during further upside. Though, 15,000 round-figure and the May 05 top near 15,180 could question the buyers afterward. Alternatively, multiple lows near 14,710 and an ascending trend line from May 04, at 14,680/75 now, could restrict the pair’s immediate downside.