- The pair is trading near 28.95 after a two-day collapse exceeding 10%, triggered by speculation that Taiwan is changing the TWD.
- Widely Asia FX rally has been the bet that regional currencies are allowed to be strengthened to win the US trade concessions.
- Technical bias turns hard; USD/TWD trading close to three years lows with 28.80 support and resistance around 29.60.
The USD/TWD cratered in 28.90 areas on Monday, deepening its historic collapse after a 5.7% collapse added to the fall of 4.4% of Friday. The Taiwan Dollar's two-day rally of over 10% has been sharp in more than three decades and triggers greater speculation that Asian economies may allow their money to appreciate to get rent to US trade negotiations.
While the Central Bank of Taiwan rejected the US intervention or coordination, Governor Yang Chin-Long was forced to hold a rare press conference, which reaffirmed that there were no exchange rate discussions in Washington. However, the markets interpret the passive stance of the central bank – along with hot money from exports – as an unofficial green light for appreciation. The move has brought TWD to the strongest level since mid -2022, boosting volatility throughout Asia FX.
This dynamic is deprived of other major currencies in the region. The US dollar dropped 0.7% against Japanese Yen and Australian dollars, with the latter holding a five -month height. The offshore Yuan Yuan hit a six -month climax at 7.1881 before the acquisitions. The sentiment in the market is rapidly moving to the belief that the peak tariffs from President Trump's administration may be behind us, which has picked up a rebound on sensitive risk of risk and EM currencies.
In the US, economic indicators remain mixed. The ISM Services PMI rose to 51.6 in April, and nonfarm payrolls were shocked at the reversal to 177,000, despite the broader uncertainty around the tariffs and the Fed policy continued to weigh the dollar. Markets still prote on rate cuts later in the year, even at a slightly slower pace than last week.
Technical analysis
From a technical stance, USD/TWD is in free fall. After breaking many support zones, the pair now hovers near three years lows. Immediate support lies at 28.80, followed by 28.60 and 28.40. The resistance is likely to appear around 29.60, 29.90, and 30.20. Momentum indicators confirm bias bias, and unless the Taiwanese authorities have walked or changing the rhetoric -changing materials, further collapse cannot be decided.
Sunny chart
