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

OCBC’s Sim Moh Siong and Christopher Wong report that the Bank of Thailand (BoT) kept rates at 1% while upgrading growth forecasts and flagging inflation risks from Oil and El Niño. They expect policy to stay on hold near term, with a cumulative 50bp hike in 1H27. A double-top pattern in USD/THB points to key support at 33.62 and resistance near 33.85/90.

BoT on hold as pattern forms

"USD/THB ease slightly away from its recent highs overnight. In policy decision, BoT kept its policy rate unchanged at 1%, in line with our house view. The central bank revised its growth forecasts higher for 2026 and 2027, supported by stronger exports and investment associated with the AI cycle."

"We maintain a slight-cautious near-term view on THB. The growth upgrades are encouraging, while BoT appears comfortable keeping policy accommodative given the uneven recovery. Our economists expect BoT to keep policy rate on hold on 23 Dec MPC but will continue to monitor the tone of the statement to assess whether there has been a shift to a slightly more hawkish bias."

"Our house view remains comfortable with the view that BoT will normalise its policy rate, by hiking a cumulative 50bp in 1H27. For now, external developments remain more relevant for THB direction. A pullback in USD and oil prices, alongside stabilisation in gold, may offer some respite, although renewed energy-price pressures remain a risk."

"Daily momentum is flat while RSI eased lower. We had earlier flagged double-top pattern. A double-top bearish reversal would see immediate support coming in at 33.62 (21 DMA), 33.25/30 (50, 100 DMAs). Resistance at 33.85/90 levels (doubletop)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)