Taiwan Dollar On Track To Snap Winning Streak, Geopolitics & Data Take Focus

Spot USD/TWD is on track to snap an eight-day losing streak as its RSI narrowly avoided entering oversold territory.

• The rate last deals +0.056 at TWD29.100, hovering just above yesterday's low/Apr 14 low of TWD29.021/28.977, which mark the initial layer of support. A break here would open the door to a deeper sell-off towards Mar 30 low of TWD28.539. Conversely, a rebound above May 12 high of TWD29.845 is needed to reinstate the broader uptrend.
• The TAIEX is struggling to make further headway after hitting resistance from the congestion of its 50-DMA/May 5 high/38.2% recovery of the Jan 5 - May 12 sell-off around the 16,760-16,800 area. Yesterday's swing towards this resistance zone occurred on the back of particularly high turnover.
• Geopolitics remain the obvious focus for Taiwan, as the PLA said it patrolled waters and airspace around Taiwan recently to warn the U.S. against cooperation with the self-ruled island.
• Meanwhile, expansion in Taiwan's manufacturing sector ground to a halt, Markit PMI data released this morning showed. The main index eased to the breakeven 50 level as lockdowns in mainland China took their toll. Manufacturers reported the steepest fall in output in almost two years, while new orders shrank for the first time since June 2020.
• With little of note eyed later this week, focus turns to monthly CPI figures, due next Tuesday. This will be the last notable data release ahead of the June 16 CBC monetary policy meeting.