South Korean Won: Upside risks with key levels in focus against US Dollar – OCBC
Christopher Wong at OCBC Bank notes that USD/KRW continues to trade heavy as exporter US Dollar (USD) selling and a softer external backdrop support the Korean Won (KRW), even as foreign equity outflows cap gains.
The South Korean Won (KRW) is experiencing upside potential against the US Dollar (USD), with key support levels at 1333 and 1320, while resistance is seen at 1350 and 1357. The pair currently trades near 1339, where bullish momentum has faded on the daily chart, and the Relative Strength Index (RSI) has fallen. The external backdrop has become more supportive, with the USD, US Treasury yields, and oil easing.
This could potentially allow USD/KRW to slip lower, especially if exporter dollar supply remains strong. However, the threat of continued foreign equity outflows remains, with upcoming technology earnings set to test foreign investor sentiment. Finance Minister Lee Hyoung-il has pledged active efforts to stabilize the foreign exchange market amid uncertainty from the Middle East conflict and monetary policy decisions in major economies.
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