INDONESIA: Country Wrap: Signs Economic Fatigue More Evident

• RES 4: 107.812 0.618 proj of the Mar 6 - Apr 7 - 9 price swing     
• RES 3: 107.800 Round number resistance    
• RES 2: 107.775 High Apr 7 and the bull trigger
• RES 1: 107.600/735 High Apr 30 / 22                   
• PRICE: 107.400 @ 05:56 BST May 5
• SUP 1: 107.395 Intraday low 
• SUP 2: 107.252 38.2% retracement of the Mar 6 - Apr 7 bull cycle     
• SUP 3: 107.125 Low Apr 10         
• SUP 4: 106.965 Low Apr 9 and a key support      

A bull cycle in Schatz futures remains in play and the latest pullback is considered corrective. Attention is on resistance at 107.775, the Apr 7 high and bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 107.812, a Fibonacci projection. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Initial support to watch lies at 107.370, the Apr 17 low.

Indonesian Q1 GDP was slightly weaker than expected, but well within the range of forecasts, falling 1% q/q nsa to be up 4.9% y/y down from Q4’s +5.0% y/y and the slowest since Q3 2021. With growth softening and inflation well within Bank Indonesia’s (BI) corridor, there is room to cut rates but only when it is confident of rupiah stability. President Prabowo is aiming for 8% growth.

• USDIDR is down 0.2% to 16395 today and 2.8% since the April 23 as the greenback has weakened but the BIS IDR NEER is up 0.7% since then signalling that, if sustained, the currency is moving in the right direction for BI to resume easing.
• Indonesia’s S&P Global manufacturing PMI fell sharply in April to 46.7 from 52.4, as US tariffs weigh on global trade and sentiment. Even if there is a deal to reduce the 32% US tariff on imports from Indonesia, the uncertainty since the April announcement is likely to weigh on Q2 growth. 
• Private and public consumption growth slowed to 4.9% y/y in Q1 from 5.0% and -1.4% y/y from +4.2% respectively. GFCF was also weaker at 2.1% y/y after 5.0% in Q4. 

Indonesia GDP y/y%

• Exports grew 6.8% y/y also slower than Q4 (+7.6%). Import growth fell to 4.0% y/y after 10.4%. Both fell on the quarter, not-seasonally adjusted though.
• February’s unemployment rate was relatively steady at 4.8% compared to a year ago, while the number of unemployed grew 1.1% y/y.

• RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 3: 1.3550 High Feb 24 ‘22 
• RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 1: 1.3444 High Apr 28 / 29 
• PRICE: 1.3304 @ 06:18 BST May 5
• SUP 1: 1.3257 Intraday low  
• SUP 2: 1.3225 20-day EMA
• SUP 3: 1.3041/3035 Low Apr 14 / 50-day EMA 
• SUP 4: 1.2968 Low Apr 11 

The latest pullback in GBPUSD is considered corrective. A bearish tweezer top formation on the daily candle chart last Monday/Tuesday, highlights a short-term top. Support to watch lies at 1.3225, the 20-day EMA. A break of this level would signal scope for a deeper retracement. Note that moving average studies remain in a bull-mode position, signalling a dominant underlying uptrend. Sights are on 1.3510, a Fibonacci projection.