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NT dollar may pass 30.26 against greenback: Goldman

The New Taiwan dollar may extend its advance to more than a seven-year high of NT$30.26 against the US dollar after rising above NT$31.27 this week, said Kevin Edgeley, a technical analyst at Goldman Sachs Group yesterday.

Support at NT$31.27 was the greenback's low versus the NT dollar in May 2006, Goldman's chart showed. Support is a level where buy orders may be clustered.

"We expect the trend to continue to the 2000 low at NT$30.26," said London-based Edgeley in a research note.

The NT dollar rose to NT$30.90 versus the US dollar before closing at NT$30.929 on Wednesday -- the strongest since March 2005, Taipei Forex Inc statistics showed. Local financial markets were closed yesterday because of a public holiday. The NT$30.26 level represents the April 2000 low, based on data compiled by Bloomberg.

Daily, weekly and monthly technical indicators such as the stochastic oscillator charts and Goldman's so-called "Trend Strength Indicator" reinforce the "bearish bias" for the US currency against Taiwan's, Edgeley wrote. The NT dollar is the second-best performer among the currencies of Asia's 17 largest economies versus the US dollar this month.

The stochastic oscillator chart measures the closing price of a security relative to its highs and lows during a certain period to try to predict whether it will rise or fall.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
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