Thai Baht: Double-top signals potential reversal against US Dollar – OCBC

The Thai baht (THB) has been identified by OCBC analysts, Sim Moh Siong and Christopher Wong, as potentially reversing against the US Dollar (USD) following the Bank of Thailand's (BoT) decision to keep interest rates at 1%. The central bank upgraded growth forecasts for 2026 and 2027, citing stronger exports and investment related to the AI cycle. However, inflation risks persist from oil and El Niño.

The BoT's decision to maintain the policy rate and upgrade growth forecasts suggests a cautious near-term view on the THB. The analysts maintain a slightly cautious stance on the baht, anticipating the central bank to keep the rate on hold during the December Monetary Policy Committee (MPC) meeting. The team expects a cumulative 50 basis point hike in interest rates by the first half of 2027.

A double-top pattern in USD/THB suggests key support at 33.62 and resistance near 33.85/90. If a double-top bearish reversal occurs, immediate support would be at 33.62 (21 DMA), between 33.25/30 (50, 100 DMAs). Resistance remains at the 33.85/90 levels.

External developments, such as a pullback in USD and oil prices, as well as stabilisation in gold prices, could provide some relief for the THB. However, renewed energy-price pressures remain a risk. The Australian Dollar (AUD) also weakened against the USD after hitting a key resistance confluence at the 50- and 200-day simple moving averages (SMAs), while strong US data reinforced the economy's strength and potential for higher interest rates.