USD/TWD: Consolidation bias holds near 32 – OCBC

💡 DMK Insight

USD/TWD’s 2.5% rise this month is noteworthy, but it’s lagging behind other Asian currencies like KRW, THB, and MYR. This relative underperformance could signal a few things for traders. First, it suggests that while the USD is strengthening, the Taiwanese dollar is not responding as aggressively as its regional peers. This divergence might indicate underlying economic concerns in Taiwan or a more cautious stance from the central bank compared to its neighbors. Traders should keep an eye on the broader Asian FX market for potential spillover effects; if KRW, THB, and MYR continue to rally, it could put pressure on USD/TWD to follow suit or risk further depreciation. Watch for key resistance levels in USD/TWD around recent highs. If it breaks above those, it could trigger more buying interest. Conversely, if it fails to gain traction, it might be a signal to consider shorting the pair, especially if economic indicators from Taiwan show weakness. Keep an eye on upcoming economic data releases that could influence these currencies, particularly any shifts in Taiwan’s monetary policy.