Can U.S. Treasury bond buybacks support USD/IDR?

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US Dollar vs Rupiah drops 0.52% today

Highlights

The U.S. Treasury's increased bond buybacks reduced dollar supply, sending the U.S. dollar to a three-month low against major currencies.
Improved liquidity conditions supported a stable Indonesian Rupiah and broad gains for Asian currencies in the week.
USD/IDR trades below key short-term moving averages with dominant bearish momentum, expected to range between Rp17,598 to Rp17,775 in the next sessions.

Asian currencies rise as US Treasury buybacks tighten dollar supply

The U.S. Treasury's decision to increase bond buybacks has resulted in the U.S. dollar trading near three-month lows against major currencies, according to Investing.com. This policy action reduces the available dollar supply in global markets, benefiting Asian currencies such as the Indonesian Rupiah through improved liquidity conditions. The move has contributed to broader gains across the region and supported the more stable performance of the Rupiah during the week.

Bearish momentum grows as USD/IDR fails to recover key levels

On the hourly chart, USD/IDR trades below the MA-20 at Rp17,748 and MA-50 at Rp17,778, while remaining above the MA-200 on the daily timeframe at Rp17,366. The Ichimoku Kijun sits at Rp17,733 and is acting as immediate resistance. Momentum indicators are distinctly bearish: MACD and ADX confirm selling pressure, with RSI at 35.6 signaling a sell bias. Both CCI and Bull/Bear Power indicate oversold conditions, while Stochastic RSI is neutral. Persistent negative Bull/Bear Power and a supporting bearish signal from the Awesome Oscillator reinforce the seller dominance, with no major divergences evident.

Downside risk prevails as consolidation persists within narrow band

In the short term, USD/IDR is likely to consolidate between Rp17,598 and Rp17,775 over the next two to three sessions, reflecting typical volatility for the pair. The probability of an upward breakout is low, with downside continuation clearly favored if support near Rp17,598 fails. A move above the Kijun resistance would open the door to a firmer rebound, though for now, the baseline expectation is for stabilization within this range.

Viktoras Karapetjanc, expert at Traders Union, sees the USD/IDR pair stabilizing after modest losses, supported by recent macro developments. He believes the U.S. Treasury's bond buyback policy has triggered regional currency strength, directly aiding the Rupiah. Technicals still suggest bearish bias, but fundamental and sentiment drivers favor resilience for IDR. "If USD/IDR holds above the Rp17,598 support, I expect the Rupiah to maintain its relative outperformance in the short term," says Karapetjanc.

Earlier, analysts noted that USD/IDR faced persistent short-term downside pressure amid mixed momentum indicators and technical selling. The current analysis reinforces this outlook by highlighting sustained bearish signals, with downside risk heightened if key support at Rp17,598 is breached in the near term.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.