Bias: EUR/TWD remains bullish-to-range-bound, trading above its 90-day average and in the upper half of the three-month range.
Key drivers:
- Rate gap: ECB policy remains firmer than Taiwan's, widening the rate gap and supporting the euro as investors tilt toward higher euro yields.
- Risk/commodities: Oil is near thirty-day highs and volatile; higher oil supports euro-area inflation expectations and growth signals, while the TWD remains more sensitive to shifts in global risk appetite.
- Macro factor: Eurozone inflation is easing, supporting a neutral ECB stance that keeps euro gains gradual rather than explosive.
Range: the pair is expected to drift within the three-month range, with a modest tilt toward the upper end as short-term risk appetite remains constructive.
What could change it:
- Upside risk: a stronger-than-expected euro-area data print or a clearer signal from the ECB that yields stay higher than in other regions could lift EUR/TWD further.
- Downside risk: a sharper risk-off move, or stronger Taiwan data boosting the TWD, could push the pair lower.
