Jakarta, CNBC Indonesia – The rupiah exchange rate continued its rally against the United States (US) dollar after strengthening for 6 consecutive days against last Tuesday (10/11). The news of the corona virus vaccine from Pfizer has triggered the strengthening of the Garuda currency.
According to Refinitiv data, the rupiah posted a slight gain of 0.07% at Rp.14,040 / US $, although previously it had gained 0.53% to Rp.13,975 / US $, the strongest level in the last 5 months.
Since last week, the Rupiah has now strengthened by more than 4%, but yesterday’s movement showed a risk of correction due to profit taking, which could weigh on the rupiah today, Wednesday (11/11/2020).
Moreover, what is being faced is the level of Rp. 14,000 / US $, which is the “haunted” level, aka the psychological level.
Pfizer, a pharmaceutical company from the US that collaborates with BioNTech from Germany, announced that its vaccine is effective at preventing diseases caused by the corona virus (Covid-19) by up to 90% without dangerous side effects.
“The first results from the phase three clinical trial of the vaccine indicate the ability of our vaccine to prevent Covid-19,” said Pfizer Chairman & CEO Albert Bourla in a statement yesterday. CNBC International, Monday (9/11/2020).
This announcement made the sentiment of global market players improve, and capital flows returned to Indonesia, which became the power for the rupiah to strengthen.
The results of the presidential election in the US that showed Joseph ‘Joe’ Biden’s victory over Donald Trump’s incumbent became the trigger for the beginning of a massive capital inflow.
Bank Indonesia data shows that in the period 2-5 November 2020, non-resident transactions on the domestic financial market booked a net purchase of IDR 3.81 trillion. The details, net buying on the SBN market amounted to Rp3.87 trillion and net selling on the stock market amounting to Rp 0.06 trillion.
Meanwhile, data from the Indonesia Stock Exchange shows that during the past week, foreign investors have been buying (net buy) amounting to IDR 1.2 trillion. The buying action was still going on for the last 2 days, amounting to Rp. 189 billion on Monday, and Rp. 1.73 trillion yesterday.
Technically, there has been no change in levels that can be considered considering the rupiah strengthened slightly yesterday. The rupiah, symbolized by USD / IDR, is now moving far below the 50-day moving average (50-day moving average / MA), 100-day (100-day MA) and 200-day (200-day MA), thus providing strengthening momentum.
Meanwhile, the stochastic indicator on the daily chart is in the oversold area (oversold).
|
Graph: Daily Rupiah (USD / IDR) Foto: Refinitiv- – |
Stochastic is leading indicator, or indicators that initiate price movements. When Stochastic reaches the territory overbought (above 80) or oversold (below 20), then the price of an instrument has the opportunity to reverse direction.
This means that there is a risk that the rupiah will be corrected due to profit taking (profit taking), with resistance in the range of Rp. 14,080 / US $. If this is passed, the rupiah is at risk of weakening further to Rp. 14,150 / US $.
The psychological level of Rp. 14,000 / US $ is the closest support, if the rupiah is breached it has the potential to strengthen again to test the Rp. 13,975 / US $ level before heading to Rp. 13,935 / US $ if it is also able to be passed.
Further support at Rp. 13,900 / US $, if it is able to be broken, it will open opportunities to Rp. 13,810 / US $ this week.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
– .
