Baht Flashes Sell Signal as Prasarn Sees Froth: Market Reversal
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At least three trading patterns show Thailand’s baht, this year’s best-performing Asian currency, is poised to fall as policy makers step up warnings that its rally to a 16-year high is stretched.
The baht’s 2 percent advance this month pushed the 14-day relative strength indicator to 28, data compiled by Bloomberg show. Iceland’s krona is the only one of 25 emerging-market currencies tracked by Bloomberg to have a lower reading and a level below 30 typically signals a reversal may occur. Trading envelope and stochastics oscillator indicators also suggest the baht’s rise has gone too far.