Bias: bullish-to-range-bound, EUR/TWD sits above its ninety-day average and in the upper half of the three-month range.
Key drivers:
- Rate gap: ECB policy remains neutral with rates in a steady range, while Taiwan’s central bank has been cautious, limiting aggressive moves.
- Risk/commodities: Oil is at multi-week highs with volatility, hinting at higher energy costs for Europe and a potential drag on the euro, with risk appetite meandering enough to influence EUR/TWD.
- One macro factor: Eurozone inflation trending lower toward the ECB target, supporting a cautiously neutral policy stance.
Range: It is expected to drift within the three-month range, with a tendency to test the upper end as liquidity stays steady and economics remain mixed.
What could change it:
Upside risk: A surprise improvement in euro-area data or a hawkish tilt by the ECB could push EUR/TWD higher.
Downside risk: A broader risk-off move or a stronger USD could weigh on EUR/TWD.