Bias: The bias is bullish-to-range-bound as the USD is above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Federal Reserve's current policy suggests potential rate cuts in the near future, supporting the USD against the TWD.
• Risk/commodities: Recent oil price volatility may affect global economic conditions, indirectly influencing the USD's strength against the TWD.
• Geopolitical tensions: Recent U.S. airstrikes could create uncertainty, impacting investor confidence and affecting the USD.
Range: The USD/TWD is likely to hold in its current range, potentially testing the upper end if market conditions remain favorable.
What could change it:
• Upside risk: Positive U.S. labor market data could further strengthen the USD.
• Downside risk: Any dovish comments from Federal Reserve officials may weaken the USD's position.