Recap:
In June we had noted a strong Resistance for USDTWD at 33.53-60, which we had expected to hold. It did indeed held and had a sharp fall over the next 9 months to a low of 32.16 earlier this month, exactly along the expected lines.
3-4 Months: Strong Support near 32.20, which is likely to hold. Bullishness Likely
After the fall in the last 9 months, USD-TWD has come to its very long-term trendline Support of 32.20, which has been tested earlier this month already, as seen in the chart above. A break below that may not be easy and a rally towards 33.00 and above may be seen in the next 3-4 months. The expected upmove would get a boost on a sustained move above 32.58-60.
However, in case there is a break below 32.20-18, then a fall towards 31.50 may be seen.
6-Weeks: Buying on dips towards 32.20-16 expected
In line with the longer-term view, we expect buyers in USD-TWD on dips towards 32.20-16, which was the recent low near the long-term trendline Support. On the upside the immediate Resistance is near 32.57-60 and a rally above that could give the upside momentum. We expect buying on dips over the next few weeks.
Note that the pair is close to breaking its trendline Support, however it is still not convincing enough. A sustained move below 32.00 would convince us of a break we would be targeting 31.50 then. However, our preferred scenario is that 32.20 holds as a Support.
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