South Korean Won: Recovery favoured on dips – OCBC
OCBC strategists Christopher Wong and Sim Moh Siong describe South Korean Won's (KRW) initial strength and subsequent retracement as broader risk aversion resurfaced.
The Chinese Yuan has shown gradual gains against the US Dollar, with strategists Quek Ser Leang and Lee Sue Ann of UOB noting a pullback in USD/CNH. There are no clear signs of recovery, and downward momentum continues. Intraday, they expect a brief dip below support before stabilisation. Over the 1-3 week and 1-3 month horizons, a gradual decline is favored, provided the pair remains capped by strong resistance and the cloud boundary.
The USD dipped to a low of 6.6792 two days ago, and a more sustained recovery may not be expected until it tests 6.6780. Yesterday, when USD was at 6.6820, it was highlighted that downward momentum was starting to slow, but scope for USD to test 6.6780 before sustained recovery existed. The next support at 6.6720 is unlikely to be under threat, while resistance lies at 6.6845.
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