The Composite Stock Price Index rose on Tuesday after investors digested a surprise decision by Bank Indonesia

The Composite Stock Price Index rose on Tuesday after investors digested a surprise decision by Bank Indonesia to cut its benchmark interest rate in August. This rate cut implies that BI is comfortable with the Rupiah and is optimistic about inflation, so the general outlook looks pretty bright. The likelihood that this rate cut could boost consumer spending and boost general sentiment could lift the Indonesian Composite Stock Price Index in the future.

Related to forex outlook, Rupiah weaken against Dollar on Wednesday and price move close to 13360. A breakout above 13360 could open further upside towards 13375.

The market is preparing for Jackson Hole

Financial markets did not respond to Mario Draghi's speech in Germany on Wednesday with enough excitement. Investors who expect a breakthrough are forced to bite the finger after the ECB Governor is away from sensitive statements.

Draghi defended the QE program and said that non-conventional monetary policy has been successful, but the market is not getting enough detail about the ECB's exit strategy from its quantitative easing program. Although the Euro bulls have finally received support from the favorable Euro Zone PMI report, the threat that Draghi's verbal statements can intervene and weaken the Euro in Jackson Hole potentially limits the appreciation of this currency. The ECB minutes' minutes in July have expressed concerns that a stronger Euro could tackle the ECB's efforts to achieve a 2% inflation target, so Draghi's speech on Friday will be heeded.

From a technical point of view, EURUSD remains bullish on daily charts due to consistently higher highs and higher lows. Prices are firmly above 50 SMA, while MACD is pointing upwards. Daily breakouts and closures above 1.1830 may pave the way for further improvement towards 1.1900. In an alternative scenario, a decline below 1.1700 may pave the way for further depreciation to 1.1660 then 1.1600.



The Jackson Hole Symposium became the main determinant

Feelings of anticipation are felt throughout the financial markets ahead of the Jackson Hole Symposium this week which could be an opportunity for the central bank to signal a change of policy. Key financial sector officials such as Mario Draghi and Janet Yellen will be in the spotlight. The market will be paying close attention to their speeches to seek new insights into the outlook for monetary policy and interest rates.

Despite the news that Draghi will not issue a new message around the policy at this conference, it does not mean there is no possibility of verbal intervention weakening the Euro. Fed Chairman Janet Yellen will talk about financial stability and investors will dive into this speech for clues about when the Fed plans to streamline the balance sheet and raise interest rates.

If Draghi or Yellen shocks investors with new messages around policy, financial markets can experience high levels of volatility and halt the silence of the current summer.

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