Thai Bht hits USD$ resistance level - wait to buy a Thai motorcycle?

KTMphil

KTMphil

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If you're about to transfer foreign currency money from overseas to buy a motorcycle in Thai Bht, then you might want to do some thinking.


The Thai Bht weakness is currently bouncing off a very important resistance level. Take a look at the link below for a quick understanding of why these price levels are so important


https://www.stocktrader.com/2009/05/11/support-and-resistance-rules-levels-technical-analysis/



From the 10 year historical price chart of USD$ v's the Thai Bht, you can see that the Thai Bht weakness is testing the March 1st, 2009 price level of 35.9050 (v's the USD$) & actually briefly broke through that level to 36.3320 on September 30, 2015.

Thai Bht 10 year price chart v's USD$


The fact that it didnt cause panic when it broke the previous weak price might be an indication that a resistance level is being built here, we need more time to see if this forms, if so then the Thai Bht might strengthen again and would be a good time now to buy the Thai Bht. If there's some "kind of event", whether it be a USD$ flight to quality or something bad in Thailand (say another bomb etc... hurting tourism in Thailand), then we could see the Thai Bht weaken considerably as it would break through the support level we are at now.


If the Thai Bht does weaken, then the next resistance level is around 38 v's the USD$ from 2006.


It will be very interesting to watch the Thai Bht v's USD$ over the next few weeks to see if a support level is formed ( & the Thai Bht strengthens again) or if it breaks through this support level and strengthens further.


(I used to do this stuff for work, I havnt copied this from elsewhere FYI)



Resistance level from previous low shown below:

thai bht edit by Triangle Golden 007, on Flickr
 
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OK, so where do we as average consumers get the rates quoted on the charts ? Certainly not from Thai bank TT rates.

I understand there are financial companies that will allow you to circumvent the banks exchange rates and fee structures, which ones of these are any good for smaller transaction amounts ? ie, like motorcycle purchase amounts.
 
Harrythefinn said:
OK, so where do we as average consumers get the rates quoted on the charts ? Certainly not from Thai bank TT rates.

I understand there are financial companies that will allow you to circumvent the banks exchange rates and fee structures, which ones of these are any good for smaller transaction amounts ? ie, like motorcycle purchase amounts.
Click to expand...

Harri
A few of us in Snooky use Ozforex to transfer from our Ozzy aud bank accounts to Cambo usd accounts.
If you start with the spot rate as seen on the cnbc ticker, and lets say a $5k transfer, all up including fees costs around 1.5%.
Alternatively, doing it thru your Ozzy bank, around 4% goes in fees/ poor fx rate..
 
Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

The Thai Baht didn't weaken any more v's the USD$ and didn't even test the 36.43 previous high before. If you were a chart trader, you would sell USD$ V's Thai Baht here as without an event to change the financial situation, it now doesnt look like the Thai Bht will weaken any more V's the USD$.


thai no by Triangle Golden 007, on Flickr
 
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Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

With the Federal Reserve raising U.S interest rates last week, you would have thought there might have been a shock drop in the Thai Baht V's USD$ but there wasnt one.

It could be that the markets don't see that the U.S interest rate hikes are sustainable as did the U.S equity markets with the 370 point sell off on the DJ Index after the rate hike.


This could be why the Thai Bht didn't weaken & break through the previous low. Remember we have a significant event change now with the Fed raising interest rates, so things have changed and if the mkts think its sustainable down the road then the Thai Bht could weaken. Its still bouncing below the previous weakness level & no clear sign that the Thai Baht will weaken further v's the USD$


thai bht by Triangle Golden 007, on Flickr
 
Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

Interesting times Phil
You wouldnt think the US Fed sees a need to slow down their economy with higher interest rates, or send the dollar higher than it already is, or increase their debt servicing costs on $19 trillion ?
 
Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

A friend posted this today, short term and long term interest rates over the last 3,000 years. Looks like they had to curb some inflation around 1,600 AD!


interest rates by Triangle Golden 007, on Flickr
 
Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

very interesting, thanks for the write-up
 
Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

U.S Dow Jones stock index is down 8.25% (1,500 points) since the beginning of 2016 & is the same move over the last year too coincidentally. Oil dipping below $30 a barrel and now Iran being given the ok to sell oil on the open market, so lots going on right now in the financial markets. As ive said before lots of new "events" to change the way you should think about things (dont get stubborn (emotional) and stick with what you thought before there were some significant event changes - death of all successful traders!)


The Thai Baht has been trending lower in value/ weakening vs the USD$ and may test the 36.40 previous high (in price) (1/10/2015) this week. I'll be watching for sure, if it does break/ seams (Thai baht) through the 36.40 level, then you could see some panicky usd $ short covering stops (closing out Thai bht long positions v's USD$ / game is over) going off. If it breaks resistance, the buying of usd$ (short covering close outs) V's Thai Baht could technically drive the Thai Bht " price" higher (weakening the Thai Baht further) in an accelerated fashion , often creating a short term"over-bought" - artificial high situation until all the speculators have sorted themselves out. IE it could weaken (Thai Baht) a lot and bounce back a little if it breaks the previous high (36.40), but stay weak v the USD$ above the 36.40 level. Without another event, you would then expect the Thai Baht to bounce around and weaken further very slowly.


The coming week will be an interesting for the Thai Baht.


trending by Triangle Golden 007, on Flickr
 
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Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

All the charting and trading things we initially talked about to predict price movements have happened, even with the U.S Fed. raising U.S interest rates, the market not believing that to be sustainable, then a failed weakening trend-line for the Thai Baht in Jan 2016, so a stop in the Thai Baht weakness vs the USD$ . The Thai Bht had 1 go at testing the Oct 2nd, 2015 Thai Bht high (36.37) on Jan 14, 2016, got to 36.35 and didn't break through. As we said earlier, the Thai Bht would probably gradually strengthen without an event change, after failing to break the previous resistance level vs USD$ / would strengthen after failing to break the previous high v's the USD$ and it has done (Thai Bht gradually strengthened again).


usd thai bht1 by Triangle Golden 007, on Flickr
 
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Re: Thai Bht hits support level - wait to buy a Thai motorcycle?

After the Thai Baht failed to break October 2015 highs in $ value price (Thai Baht weakening), it floundered, strengthening, very slowly ($ price weakening), and became boring to discuss.

With the weak U.S stock market and weak US$ over the past trading sessions, the Thai Baht has weakened v's USD$ and today is testing a recent resistance level of 35.75. See the graph link below for real time.

http://www.bloomberg.com/quote/USDTHB:CUR


usd thai bht may 16 by Triangle Golden 007, on Flickr



The highs of 36.35 and Oct 15 high of 36.42 are the numbers to watch. If the Thai Baht weakens further and tests these levels then we are in new territory.
 
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Thai Baht today 35.69 vs USD$ ... Right now looking weak and keeps testing the 35.75 resistance level.


 
Some really nasty payroll (job gain) numbers out of the U.S today, basically coming in at 120,000 under estimates (with previous months revised down too to add to the disappointment) , so the USD$ has weakened against all currencies. After failing to break the 35.75 Thai Baht weakness level, we could see the Thai Baht continue to strengthen slowly against the USD$, with less chance of interest rate hikes in the USA now.

Todays USD$/ Thai Baht graph with the U.S payroll numbers released


jobs baht by Triangle Golden 007, on Flickr
 
Thai Baht has been trending higher since around 10th June, 2016. Some talk about "path to interest rate hikes " from the U.S Fed has dampened the attractiveness of the USD$.

Thai Baht currently 34.89 v's the USD$, watch for the import Thai Baht resistance level of 34.76, not very far away at all. If its breaks that the level, you might see a quick Thai Baht strengthening with stops triggered of Thai Baht short positions v's USD$.


34.76 by Triangle Golden 007, on Flickr
 
Friday's afternoon trading, the Thai Baht got to the resistance level 34.75 - 34 .76 but didn't break it. It's a very important level on the charts, if we get any negative news re the USD$, you could see a material rally in the Thai Baht v's the USD$ next week, as it breaks the resistance level.


Fridays USD$- Thai Baht transaction prices, you can see the Thai Baht testing the resistance level all afternoon


thai bht resistance by Triangle Golden 007, on Flickr
 
Thai Baht currently 34.70 V's the USD$. Hitting some important chart resistance levels right now, will be interesting to watch in the next few days.
 
British pound last night, crazy moment showing down 6%, hitting 1.18 v's USD$. Computer algorithm being blamed, seems to have most stumped. Putting GBP v's Thai Baht with a 43 handle currently.


gbp111 by Triangle Golden 007, on Flickr
 
Trump now inaugurated, so the global economic revolution starts, what does this mean for the Thai Baht?



The 2 big conflicting economic signals that Trump is giving regarding what will happen to the value of the USD$:


1. The new U.S Administration, keeps banging on about the USD$ is too strong & therefore hurts their trade competitiveness, so indicating they want the USD$ to weaken. See point 2 why this is going to be a huge conflict and hard to achieve.


2. Trumps economic strategy will be to cut taxes, offer tax deals for companies to manufacturer in the U.S, this will mean more borrowing to balance the the Government spending books. This will drive up interest rates as U.S treasury investors will want a higher rate of return for the extra debt risk. As interest rates increase, this will also make investing in USD$ more attractive so conflicts with point 1 above. IE USD$ a year down the road will be a lot stronger from foreign investors seeing better interest rate returns and willing to buy USD$'s.

Trump will also borrow more (increase the deficit) to stimulate. Short term growth in the U.S, from the increased borrowing (borrow to spend makes the economy look good) will create inflation (Reaganomics all over again where we saw 17% interest rates). Interest rate hikes will be needed here to keep things getting out of control. Higher interest rates from the Fed, will again make the USD$ attractive to foreign investors, another reason the USD$ will strengthen over the next few years until this game proves to be unsustainable as U.S debt levels max out from the continued, increased, borrowing.


So what does this all mean?

Over the next say 2-3 years, we should see a steady increase in the USD$ against the Thai Baht. Looking at historic charts after the 1999/ 2000 Asia currency crisis, the level of 42 looks achievable. Obviously there is lots of event risk from other factors that could de-rail this forecast but will be interesting to watch for sure.


thai baht 42 by Triangle Golden 007, on Flickr
 
Phil...while in itself your statement has hand and feet...overall I would caution to rely on it.

In the present macroeconomic situation of high volatility and uncertainty...us inhouse issues facing the new administration...induced inflation... international issues such as China's currency interventions and possible credit crisis...Europe's oncoming elections...all make it a tough call and hard to believe it can weaken (the us$)...but not necessarily meaning a much higher dollar.

In my opinion we have seen the biggest price drop for motorcycles based on the market dynamics as we discussed earlier last year and 2015.

In the spirit of things...as our friend Lao Tzu said...those who have knowledge don't predict...
 
Totally agree making predictions is dangerous. Too much unforeseen event risk to make your predictions look stupid but i think important to do as it helps people rationalize.



Says it all -

"tough call and hard to believe it can weaken (the us$)...but not necessarily meaning a much higher dollar."



bikesncats said:
Phil...while in itself your statement has hand and feet...overall I would caution to rely on it.

In the present macroeconomic situation of high volatility and uncertainty...us inhouse issues facing the new administration...induced inflation... international issues such as China's currency interventions and possible credit crisis...Europe's oncoming elections...all make it a tough call and hard to believe it can weaken (the us$)...but not necessarily meaning a much higher dollar.

In my opinion we have seen the biggest price drop for motorcycles based on the market dynamics as we discussed earlier last year and 2015.

In the spirit of things...as our friend Lao Tzu said...those who have knowledge don't predict...
Click to expand...
 
"... important to do as it helps people rationalize"
Totally agree...and a bit of "food for thought" always helps people develop a bigger picture when undecided...
 
Article today from Bloomberg



https://www.bloomberg.com/news/arti...th-super-baht-20-years-after-currency-crashed


Two decades ago, Thailand became ground zero of the Asia financial crisis, when its government scrapped a dollar peg with the baht, a devaluation that unleashed a wave of speculative attacks on other regional currencies and shook the global economy. Now, the baht is again posing challenges for Thailand--but this time because it may be too strong.
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Near-record foreign exchange reserves and a current-account surplus have burnished the baht's appeal as a regional haven and attracted foreign capital to Thai bonds. The currency is the strongest performer in Southeast Asia in the past year. The super baht, however, is a complication for policy makers trying to nurture a recovery in an economy where exports account for about 70 percent of gross domestic product.
1000x-1.png


The jitters caused by the baht reflect Thailand's wider post-crisis task: how to shift from a low-cost manufacturer of hard disks and car parts to more advanced industries that can boost incomes further. The military government, under junta leader and Prime Minister Prayuth Chan-Ocha, is promoting Thailand 4.0 to bolster biotechnology, robotics, electric vehicles and other sectors by wooing investment and trying to improve workforce skills.
"The longer term challenge today is the competitiveness of industry," Bank of Thailand Assistant Governor Chantavarn Sucharitakul said in an interview. "Particularly small and medium-sized companies that benefited from the large depreciation of the currency in 1997, which today may have to find new business models to move to a higher value-added, more competitive space."
On the upside, Thailand's sound fiscal, monetary and prudentialoversight is trusted by investors and its debt ratios are in check after a "painful" process of reform over the past two decades across banks, companies, households and the government, Chantavarn said.
1000x-1.png


Thailand scrapped a dollar peg on July 2, 1997 as foreign reserves dwindled after attacks by speculators. The currency crashed, borrowers defaulted on dollar debt, financial institutions fell and a deep recession ensued. The nation drew $14.1 billion of international assistance to help with recovery.
After long-term financial-sector repair and reform, foreign reserves today of $184.5 billion are second only to Singapore in Southeast Asia and exceed short-term external debt more than three times, according to the Bank of Thailand. The current-account surplus was 10 percent of gross domestic product in the first quarter.
The baht has climbed 3.4 percent against the dollar in the past 12 months, the most in Asia after Taiwan's dollar and the Indian rupee. It was little changed at 33.99 against the dollar on Friday.
1000x-1.png


The International Monetary Fund, which provided aid to Thailand in 1997, now says the external position is too strong. Central bank Governor Veerathai Santiprabhob has rejected other claims that Thailand is limiting the currency's climb for an unfair trade advantage, saying it steps in only when inflows surge.
The high reserves could be partly why the monetary authority has gradually liberalized outbound foreign investment rules, according to Rahul Bajoria, a senior economist at Barclays Plc in Singapore.
"If investment projects pick up steam, we would expect demand for capital imports to rise, which may help create more even conditions for foreign exchange," said Bajoria.
Yet private-sector investment has been subdued since the generals seized power in a coup in 2014, while a run-up in household debt is weighing on consumers. Economic growth is accelerating on a nascent export recovery, tourism income and government outlays. But it remains the weakest in emerging Southeast Asia at just over 3 percent.
1000x-1.png


The current stretch of military rule is the longest since the early 1970s, in a country that has endured about a dozen coups since putting an end to absolute monarchy in 1932. A new constitution promulgated in April set the stage for a possible return to some form of democracy next year.
Amid the political uncertainty at home, Thai businesses invested a record$13 billion abroad in 2016, dwarfing inflows of $1.6 billion. Companies including Asia's biggest cement maker Siam Cement Pcl, or SCG, and renewable energy business BCPG Pcl are seeking to tap overseas markets.
1000x-1.png


The government is trying to turn the focus back on domestic opportunities. The administration has unveiled 56 major infrastructure projects worth about 2.3 trillion baht ($68 billion), Bank of Ayudhya Pcl research shows.
Thailand 4.0 is partly focused on a proposed 1.5 trillion baht investment over five years to add railways, new cities and modern industry on the eastern seaboard, a plan the government says can link with China's Belt and Road Initiative. Most of the money is expected to come from the private sector.
Read about Thailand's hopes for developing its eastern seaboard
Thailand is competing with the likes of Vietnam, Cambodia and Myanmar for foreign-direct investment, said Arthur Kwong, head of Asia-Pacific equities at BNP Paribas Asset Management Asia Ltd. in Hong Kong.
"You really need to see more stability from a top-down perspective," he said. "Thailand is no longer the only country available for FDI. There are more choices now and the attention has probably been diluted by new frontier markets."
Such competition also underscores the need for better skills. Thailand needs improved workforce education, especially with the population aging and the proportion of working age shrinking, said Ulrich Zachau, the Southeast Asia country director for the World Bank in Bangkok. "That's a big structural issue for Thailand," he said.
The lender describes Thailand's social and economic development over the past four decades as a remarkable escape from poverty.
But while financial-sector reforms, substantial foreign reserves and Bank of Thailand banking oversight may provide a backstop against a repeat of the 1997 implosion, the question is whether the next four decades will see similar progress.
Thailand recognizes the need for, and is working toward better labor force skills, technology upgrades and more research and development to escape the middle-income trap, Chantavarn from the Bank of Thailand said. "The challenge is in the execution," she said.
 
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