- USD/IDR has pulled back from highs above 13,750 reached earlier this week.
- The bullish divergence of the daily RSI is still valid.
- The weekly high is now the level to beat for the bulls.
USD/IDR is currently trading at 13,659, having hit a high of 13,757 on Feb.4.
Despite the pullback, the bullish divergence of the 14-day relative strength index (RSI) confirmed on Jan.28 is still valid.
The positive divergence will remain valid as long as the pair is holding above the recent low of 13,560 (Jan. 24 low).
That level, however, could come into play as the long upper wick attached to the weekly candle indicates the broader sentiment is still quite bearish.
Acceptance under 13,560 would open the doors to deeper support at 13,273 (January 2018 low). On the higher side, a break above 13,757 is needed to establish a higher high and confirm a bullish reversal signaled by the positive RSI divergence.