July 22, 2022 04:19 GMT
The price action of spot CNH/IDR remains centred around a key pivot located slightly above the IDR2,200 mark. The rate last deals at IDR2,217, down 5 figs on the day.
- The pair formed a double bottom pattern in mid-April to mid-June, with the neckline of that structure (IDR2,207) supporting subsequent pullbacks.
- Adding to the importance of the area just above the broken neckline is the nearby 50% Fibo retracement of the Feb - May retreat (IDR2,212), which provided formidable support over the past week or so.
- The region delineated by the aforementioned levels (IDR2,212/2,207) provides a notable near-term bearish target. A break here could tip the balance to the bearish side.
- We are yet to observe the ramifications of yesterday's monetary policy decision from Bank Indonesia, which saw the Board of Governors defy pressure to raise the policy rate, while vowing to beef up rupiah stabilisation.
- Worth noting that Indonesian President Widodo's trip to Beijing next week (Jul 25-26) has been confirmed by China. Jokowi will meet with President Xi and Premier Li to discuss "bilateral relations and major regional and international issues." Beijing will be Widodo's first stop during his East Asia trip, which also includes visits to Japan and South Korea.
Fig. 1: CNH/IDR Technical Picture
Source: MNI - Market News/Bloomberg
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