USD/IDR refrains from further declines amid recent greenback buying

• Dialed down calls for Fed rate cut favor the greenback against the Rupiah that bears the burden of BI rate cut.
• Lack of data/events from Indonesia keeps the spotlight on the US related headlines.

USD/IDR isn’t immune to the recent US Dollar (USD) strength as it pulls back from multi-month low to 13,955 during early Monday.

The pair slipped to the lowest since February on early Friday as markets reacted to the Fed officials’ comments signaling higher rate cuts from the Fed. However, the moves couldn’t last long following the statement from the Federal Reserve Bank of New York that disowned President John Williams dovish signals and tamed the greenback bears.

Adding to the greenback strength could be the latest positive headlines surrounding the US-China trade developments.

On the other hand, the Indonesian Rupiah (IDR) bears the burden of the Bank Indonesia’s (BI) rate cut. The central bank also said that the 2019 economic growth seen at below midpoint of 5.0-5.4% outlook while keeping its pledge to pursue an accommodative macro-prudential policy to support lending growth.

While the greenback continues to recover, buyers will remain cautious ahead of the July 31 Federal Open Market Committee (FOMC) meeting. The economic calendar is quiet for Indonesia, which in turn highlights the US related news/headlines to be watched for fresh impulse.

Technical Analysis

Even if sustained trading below the key moving average (MA) portrays the USD/IDR pair’s weakness, 13,740/25 support confluence, including 38.2% Fibonacci retracement level of 2014 swing lows to 2018 swing highs and 200-week SMA, can limit the quote’s near-term declines.