Indonesian Rupiah (IDR) ⇨ US Dollar ($) (IDRUSD) Indonesia Upgraded To Investment Grade

Indonesian Rupiah (IDR) ⇨ US Dollar ($) (IDRUSD) Indonesia Upgraded To Investment Grade

Indonesian Rupiah (IDR) ⇨ US Dollar ($) (IDRUSD) Indonesia Upgraded To Investment Grade

S&P Global Ratings raised Indonesia’s sovereign rating to an investment grade. The rating was revised to BBB- from BB+ with a stable outlook. After the revision, Indonesia has now acquired an investment grade rating from all the three major rating agencies. The upgrade was possibly due to the waning fiscal risks emerging from realistic budgeting and reduction in subsidies, noted ANZ. Consequently, S&P is of the view that net government debt is expected to remain below 30 percent of GDP.

The rating upgrade is expected to confirm positive sentiment towards the Indonesian rupiah and IDR bonds. The IDR is likely to be the outperformer in the region and are tactically short the 3M INR/IDR NDF. A rebounding external position and higher foreign exchange reserves have eased the risk of any sharp weakening.

Portfolio flows are the wild card but we continue to expect solid demand for Indonesian bonds on the back of their reform and yield appeal.

Overall, the bias in prices is: Sideways.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 13,355.77.

The projected lower bound is: 13,250.19.

The projected closing price is: 13,302.98.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 29 white candles and 14 black candles for a net of 15 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 6 falling windows in the last 50 candles–this makes the current falling window even more bearish.

Momentum Indicators

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 42.6087. This is not an overbought or oversold reading. 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 46.70. 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 120 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 -103.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 0 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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX IDR= closed down -26.000 at 13,304.000. Volume was 18% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open              High              Low               Close              Volume
13,290.000  13,306.000  13,280.000   13,304.000   85

Technical Outlook
Short Term:                Neutral
Intermediate Term:  Bullish
Long Term:                 Bullish

Moving Averages: 10-period     50-period   200-period
Close:                       13,329.00    13,315.40    13,272.66
Volatility:                3                     3                   4
Volume:                  108                 115               112

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= gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
FOREX IDR= is currently 0.2% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of IDR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on IDR= and have had this outlook for the last 16 periods.

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S. Jack Heffernan Ph.D. 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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