The formation of an inverted hammer......>

DOLLAR-IDR: The formation of an inverted hammer candlestick on Jun 8 heralded

the recent rally in USD/IDR, which continued as the pair decoupled with the DXY

since the beginning of this month. Gains were arrested as the spot approached a

crossover of its 50-DMA and the upper 3.0% Bollinger band on Tuesday, which

entailed a pullback from Jun highs. A break below the channel floor at IDR

14,271 would bring Jun 8 low of IDR13,873 into view. Bulls need a breach of the

50-DMA at IDR14,693 to see the resumption of the uptrend, with the next topside

target coming up at IDR14,670/14,695 (channel top/upper 3.0% Bollinger band).

- Continued gains this month were driven by chatter surrounding Indonesia's

$40bn debt monetization plan, incl. BI buying $28bn of gov't bonds effectively

at no interest. However, Tuesday's announcement of an agreement between BI &

FinMin was a sigh of relief for IDR, as off'ls downplayed potential moral

hazard, insisting that this is a one-off step. Moody's and S&P further dialled

down earlier angst, noting that the scheme wouldn't affect the country's credit

rating in the short term, although they will monitor long-term effects.

- Please use the following link to access the chart: https://bit.ly/2W3hmzX