Indonesia Rupiah to Rally 4.4% in Two Weeks: Technical Analysis

Bloomberg) -- Indonesia’s rupiah, Asia’s best performer this year, is set to appreciate 4.4 percent in the next two weeks, said Pak Lai Ng, a technical analyst at Forecast Pte. in Singapore, citing trading patterns. The dollar-rupiah’s 20-day moving average fell below its 200-day measure yesterday for the first time since July, indicating the rupiah will extend its rally against the greenback, Ng said. The rupiah has surged 26 percent since reaching a 10-year low of 13,150 on Nov. 21 on optimism a global recession is easing and President Susilo Bambang Yudhoyono may be re-elected later this year.

The rupiah may approach the “psychologically important level” of 10,000 a dollar, “maybe in the next one to two weeks,” Ng said.

The currency traded at 10,442 as of 8:47 a.m. in Jakarta, according to data compiled by Bloomberg. It earlier touched 10,319, the strongest level since Oct. 27. The rupiah’s 4.4 percent advance this year makes it the best performer among the 10 most-active Asian currencies outside of Japan.The 20-day moving average for the dollar-rupiah touched 10,723 today, compared with the 200-day’s 10,805, according to data compiled by Bloomberg. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Moving averages are used to identify trends and find support or resistance. Support is a level where buy orders may be clustered and resistance is where there may be sell orders.