USD/TWD: Consolidation bias holds near 32 – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong note USD/TWD has risen nearly 2.5% this month but remains more contained than other Asian FX such as KRW, THB and MYR. They attribute relative resilience partly to ‘leaning against the wind’ by authorities and CBC’s focus on stability to avoid imported inflation. They expect near-term consolidation with resistance around 32.20 and layered support below 31.85.

Taiwan Dollar resilience points to consolidation

"USD/TWD continued to edge higher this month, up nearly 2.5% but the magnitude of the move remains more contained relative to other Asian FX including KRW, THB, MYR which were mostly down between 3.5 to 5% (vs. USD). We believe part of the relative resilience was due to leaning against the wind activities."

"Separately, CBC Governor Yang told lawmakers that CBC has not seen signs of imported inflation so far and that TWD must be stable to prevent imported inflation. He reiterated that monetary policy may need to turn tighter if inflation expectations rise though it is not yet time to adopt tightening measures."

"CBC projects 2026 CPI at 1.8% based on average oil price of USD85/bbl but CPI can rise to 1.9% if oil prices rise to USD100/bbl."

"USD/TWD spot last seen at the 32 levels. Bullish momentum on daily chart faded but RSI rose."

"Consolidation likely for now. Resistance at 32.20 levels (76.4% fibo retracement of 2025 high to low). Support at 31.85 (21 DMA), 31.66 (50 DMA) and 31.50/56 levels (100 DMA, 61.8% fibo)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)