USD/THB – Highest Consumer Confidence Since Coup

Thais are feeling better about their economy. In the latest consumer confidence survey done, the University of Thai Chamber of Commerce indicated that respondents believe the THai economy will growth more than 5% in 2013. The consumer index came in at 84.8, the highest since Yingluck has taken over as head of the South East Asian state. Nonetheless, despite the steady improvement in readings, Consumer Confidence level remain below 100, which is the barometer for par, unlike other major confidence index that sets par level at 50.0. Therefore, do not be misled, overall climate in Thailand remains bearish, most likely due to the strengthening Baht and employment sentiments. Future Employment Opportunity index has similarly improved, but is deeper in the red at 75.5 compared to the headline figure. Corporations are not hiring due to rising Baht eroding topline profit, while at the same time making employees more expensive to keep.

With the 5 day Songkran Festival coming, local firms will be looking forward to higher spending during the festival. However, many Thais have indicated that they will be traveling abroad due to the stronger Baht. 18.9% of respondent indicated that they’ll travel abroad, up from last year’s 14.5%. This will actually decrease domestic consumption during the festival and add more woes to local firms that are already struggling.

Together with declining exports, these negative factors will pose risk to future consumer confidence especially if employment opportunities continue to remain in the red. Despite this, the 5% minimum growth expected this year will still continue to work in the Baht’s favor, especially if BOT maintain its interest rates at current levels.

Daily Chart

Baht has strengthened against the Greenback tremendously since the turn of the year. Price has been trading lower with no reply from USD/THB bulls. Price appears to have bounced lower from the descending trendline with recent bullish recovery back to 29.5 barely tested the swing low on Jan not to mention testing the consolidation level between 29.7 – 29.9. Stochastic reading suggest that bear cycle will continue with readings finding an interim top after pushing to 9 months high (incidentally Jun ’12 peak, the starting point of current sell off). From here out, a break below 29.1 may spur further bearish momentum, while a stall of current bear trend my occur if price manage to first trade above the descending trendline though preferably price need to retest the 29.7-29.9 band before bulls can contemplate a stronger push ahead.

Hourly Chart

Hourly Chart is mildly bearish, with price firmly below current bearish Kumo. Also, price is trading below 29.35 support that has been in place between 2nd Apr – 4th Apr. A price break lower from here may accelerate bearish momentum slightly to test the floor of the daily chart. A break above 29.30 – 29.35 may help the bulls to maintain a short-term hold. Stochastic readings are mildly pointing upwards, suggesting that price may still yet push higher though the Overhead Kumo and Kijuu Sen (red line) will continue to weigh against the bulls.

More Links:
USD/SGD Technicals – Familiar Resistance at 1.242 vs 1.24 Support
GBP/USD – Trades Near Six Week High at 1.5350
AUD/USD – Eases Back Down to Within 1.0360 and 1.04

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