USD/TWD Testing 20-day EMA Support, September Trade Data Later

MNI (Australia) USD/TWD sits near 32.14, fresh lows back to late September. Current spot levels also mark the 20-day EMA, which has been a support point back to mid July. Note the 50-day EMA comes in around 31.90. Recent highs in the pair rest close to 32.45 (on an intra-day basis).

• Local equity sentiment is firmer, the Taiex comfortably above recent lows (+0.85% so far today). Still, offshore investor outflows remain large at -$1.5bn in October to date. Equity bellwether TSMC is higher today after reports of stronger AI related demand for the company (see this BBG link).
• A less hawkish Fed backdrop should aid tech equity sentiment all else equal, but TWD may need a turn around in equity flows to drive a test towards the 50-day EMA.
• On the data front we have September trade data out later. The market expects further improvement in y/y momentum, albeit still in negative y/y territory. The consensus is for -2.5% y/y (prior -7.3%). Imports are also expected to improve to -13.8% y/y (from -22.9%).
• South Korean September exports were slightly better than expected, while early October data showed potentially further improvement. Export growth trends for both economies will be watched closely.