Our expectation of an eventual fall in the USD-IDR towards 0.8350, as expressed in the June-07 report turned out to be wrong and the pair rallied to a high of 0.9485 in Aug-07, and then again at 0.9488 in Jan-08.

USD-IDR is currently near an important Support. In January-08, the pair topped out at 0.9488, which was also near its 2007 high, as seen from the chart above. A fall has been subsequently and the pair is near its important trendline Support from May-07, which is at 0.9300. A break may not be seen immediately as there is still time remaining before the two trendline shown in the above chart converge.

If a bounce is actually seen from 0.9300, then we could see some range bound trading between 0.9300 and 0.9500 before fresh direction either side. On the other hand, a sustained break below 0.9300 would open the probability of a fall towards 0.9050 over the next few months.

In line with the larger view, the pair is currently just above an important Support at 0.9300 on the trendline shown above. We think that this could hold, keeping in view the strong Support near 0.9300. However, if this is broken a fall towards 0.9250 may be seen. Below that the 200-Day MA would provide Support near 0.9188.

If 0.9300 holds, a rally towards 0.9488 may be seen over the next few weeks.

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