Taiwan Dollar: Foreign inflows remain key to recovery – OCBC

Foreign equity outflows and unsettled sentiment towards global technology stocks continue to weigh on the Taiwan Dollar (TWD) despite robust exports, according to OCBC’s Christopher Wong, with these factors dominating USD/TWD moves. Cautious about the near-term outlook, Wong says a more sustained TWD recovery would require equity flows to improve. He also points to technically overbought conditions, with nearby support and resistance levels shaping price action.

Can TWD recover amid equity outflows?

"TWD remained under pressure last week as foreign equity selling continued (Week-to-date USD7.6bn) amid unsettled global technology sentiment."

"The CBC attributed the currency’s weakness to substantial foreign fund outflows and dividendrelated remittances, while reiterating its willingness to maintain orderly FX conditions. This contrasted with strong September export orders, which surged 62.4% YoY, highlighting the disconnect between Taiwan’s resilient external sector and portfolio flows."

"We remain cautious on TWD near term. While CBC smoothing may help contain excessive volatility, sustained recovery would likely require foreign equity selling to moderate."

"Bullish momentum on daily chart intact while RSI turned lower from overbought conditions. We continue to keep a lookout for signs of technical turnaround."

"Support at 32.35 (23.6% fibo), 32.13 levels (38.2% fibo retracement of 2026 low to high). Resistance at 32.70 (recent high)"

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