USD/IDR: Above 50-day SMA with all eyes on Indonesia inflation

• USD/IDR stays above 50-day SMA amid the overall USD strength.
• Bank Indonesia’s bearish bias, downbeat data adds to the USD/IDR pair’s weakness.
• September month Inflation data in the spotlight for now.

In addition to the overall greenback strength, pessimism surrounding Indonesia’s September month inflation numbers also propel the USD/IDR pair as it takes the bids to 14,153 on early Monday.

The US Dollar (USD) benefits from multiple factors ranging from an absence of downbeat economics to comparatively less dovish monetary policy by the US Federal Reserve, not to forget the safe-haven demand. However, developments surrounding the oppositions’ plot to impeach the United States’ (US) President Donald Trump, coupled with doubts over any breakthrough in the US-China trade talks, weigh on the greenback.

On the other hand, catalysts from Indonesia, including trade data and consumer confidence, have been downbeat off-late, which in turn pushed the Bank Indonesia (BI) to announce third rate cut of 25 basis points on September 19.

Traders now look forward to Tuesday’s monthly inflation data from Indonesia to determine the fresh direction of the pair. Forecasts suggest headline Inflation (YoY) increases to 3.54% from 3.49% whereas MoM reading could decline to 0.16% versus 0.12% prior. Further, Core Inflation (YoY) could soften to 3.17% from 3.30%.

Meanwhile, political plays surrounding the US President’s impeachment and the US-China trade war could entertain the pair traders amid a lack of major data.

Technical Analysis

In addition to 50-day simple moving average (SMA) level of 14,150, the two-week-old rising trend-line near 14,140 also questions the pair’s near-term downside, which in turn signal brighter chances of its another run-up to confront 14,245/50 resistance-area including monthly tops.