INDONESIA JSX 45 INDEX and USD/IDR

2 year-long depreciation for the Indonesian Rupiah should be over with the USD/IDR reaching long-term trend resistance at 12,400 levels. In 2012, I’ve analyzed several emerging market currency weakness against the U.S. dollar. USD/IDR was one of the charts that formed major base reversal (inverted head & shoulder). Since then, the asian currency depreciated from 9,000 levels to 12,000 levels. 2 year-long uptrend on the USD/IDR is due for a pullback. 12,400 levels is a strong resistance and only a decisive break above this level would put more pressure on the Rupiah. Otherwise expect the local currency to strengthen over the next few months.

Strength on Indonesian rupiah should have a positive effect on the equities as well. JSX Liquidity 45 index found support at the lower boundary of its uptrend and now it is challenging the 200-day moving average at 746 levels. Equities should resume their uptrend as long as the trend channel remains intact. Strong support for the equity index is between 650 and 700 levels.