- USD/IDR extends 200-DMA’s early week pullback ahead of key central bank announcement.
- Bank Indonesia is expected to keep its policy rate unchanged at 3.5%.
- The three-month-old ascending trendline holds the door for further decline.
- The bulls have several hurdles even if they manage to break through the key DMA.
USD/IDR remains down for the third day in a row, around $14,300 during Thursday’s Asian session.
In doing so, the Indonesian Rupiah (IDR) pair extends the previous 200-DMA U-turn towards an ascending support line from December 2021 ahead of the Bank of Indonesia (BI) rate.
Although BI is not expected to alter monetary policy, Finance Minister (FinMin) Sri Mulyani Indrawati’s willingness to take action to defend the national economy from the Ukraine-Russia crisis may allow USD/IDR to go forward. The bearish bias also takes cues from bearish MACD signals.
That said, a 3-month upward sloping support line near $14,300 becomes crucial as a breakout will direct the quote to another key trendline support, from November 2021 around $14,255 at the time of the hurry.
In an event that USD/IDR prices break below $14,255, a December 2021 low of $14,220 will attract market attention.
Meanwhile, recovery moves must provide a daily close above the 200-DMA level of $14,330 to resume orders.
Even so, several hurdles around $14,390 and $14,400 will challenge the USD/IDR bulls ahead of the monthly high of $14,414.
USD/IDR: daily chart
Trend: further weakness expected