The USD/THB pair is one that a lot of you probably don’t trade, but I do like it, due to the fact that it is such a strong play on emerging markets. After all, Thailand is in exactly one of the first places that money flows to, but when it does, it means that it believes in economic growth worldwide. The Thai baht is a currency that represents Asian growth and expansion. The fact that the US dollar has been so strong against it for months now tells us that the world is shunning excess risk, which of course Thailand will certainly be the epitome of. This is not only because of the emerging market nature of the economy, but also the political pressures that pop up in that country from time to time. Quite frankly, people have to be very confident in the global economy to put money to work in a place like Thailand, so at this point in time I think this chart tells us a lot.
Hammers
We formed so many hammers over the last week or so that it suggests that we are going to go much higher. If we can break above the 36 handle, I don’t see any reason why the currency pair doesn’t reach all the way to the 36.60 level, if not higher than that. After all, we have been in a nice uptrend for some time now, and as a result I have no interest in selling. Just below the hammers at the 35.50 level I see a significant amount of support as well, as it was previously resistive.
The US dollar is the world's favored currency at the moment, and as a result it only adds more pressure to the upside in this market. I believe that the trend is strong, and while this pair tends to be very slow, it makes for a nice longer-term investment. Because of that, I am bullish and willing to hang onto the trade for quite a while.
