USD/IDR pulls back from 3-week high ahead of Indonesia Inflation data

• USD/IDR fails to cross 100-day EMA despite rallying to 3-week high after Fed meeting.
• Indonesia Inflation is in the spotlight for now.

Following its run-up to the highest since July 10, the USD/IDR pair trades near to 14,110 as traders await July month Inflation data from Indonesia, up for publishing on early Thursday morning.

The quote soared the most since early-May after the US Dollar (USD) bulls cheered the Federal Reserve Chairman Jerome Powell’s comments against the start of easy money policy.

Market pessimism ahead of the key economic statistics, considering Indonesia’s downbeat performance and latest dovish comments from the Bank Indonesia (BI) Governor Perry Warjiyo, failed to weaken the Indonesian Rupiah (IDR) much.

As per the Reuters, which anticipates the inflation rate to remain near June level, the central bank expected a July inflation rate of 3.23% on-year, Governor Perry Warjiyo said on Friday, reiterating that low inflation gives BI room for more accommodative policy. BI's target range for this year is 2.5% – 4.5%.

Market forecasts favor 0.26% MoM figure of headline Inflation versus 0.55% previous readout, coupled with YoY data suggesting 3.27% mark against 3.28% prior. Further, the Core Inflation is expected to weaken to 3.17% from 3.25% prior announcement on a yearly format.

Technical Analysis

A 100-day exponential moving average (EMA), at 14,178 now, becomes immediate important resistance, a break of which can propel prices to July month high near 14,240. However, a sustained trading below the key EMA may please sellers with 14,000 round-figure.