Indonesian Rupiah Outlook

Indonesian Rupiah Outlook

FOREX IDR= closed up 10.000 at 13,090.000. Volume was 4% above average (neutral) and Bollinger Bands were 13% narrower than normal.

Open High Low Close Volume___
13,060.00013,093.00013,060.00013,090.000 123

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 13,095.50 13,328.98 13,483.29
Volatility: 3 9 9
Volume: 55 115 143

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX IDR= is currently 2.9% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of IDR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on IDR= and have had this outlook for the last 26 periods.

The widening trade surplus in June on the back of a seasonal demand indicates a weak recovery of Indonesia’s economy, according to economists with the private lender Bank Danamon Indonesia.

Indonesia’s trade surplus widened to around $900 million in June from May’s revised $380 million surplus, the country’s Central Statistics Agency revealed in a press conference on Friday (15/07).

Apparel and mechanical appliances accounted for the bulk of exports due to summer demand among Indonesia’s trading partners, a trend that would end in following months, Danamon’s Anton Hendranata and Wisnu Wardana wrote in a research note.

It is a further decline raw material and capital goods imports — which growth fell 15.3 percent during the first six months of 2016 versus 14.9 percent decrease in the same period a year earlier — which should raise concerns.

“We took this as a sign that the capital-intensive infrastructure projects, which are on the top of priority list, have not rolled over,” the note said.

Central bank Bank Indonesia in a separate statement said the trade balance in the second quarter will be “positive” to support the current account balance, amid businesses and government needs to service foreign debts.

The economists expect the country’s current account deficit in the second quarter 2016 to reach $5.3 billion or 2.3 percent of the gross domestic products. That compared to $4.67 billion, or 2.14 percent of GDP in the first quarter.

HEFFX Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.

During the past 10 bars, there have been 2 white candles and 2 black candles. During the past 50 bars, there have been 22 white candles and 20 black candles for a net of 2 white candles.

HEFFX Momentum

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 19.1176. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.85. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 30 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -78. This is not a topping or bottoming area. The last signal was a buy 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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