According to Christopher Wong at OCBC Bank, the USD/KRW currency pair continues to trade on the heavy side, with the Korean Won (KRW) receiving support from exporter US Dollar (USD) selling and a softer external backdrop. The pair is currently trading around 1339, with downside risks towards support levels at 1333 and 1320, while resistance is noted at 1350 and 1357. The market is closely watching upcoming technology earnings, which are seen as crucial for foreign investor sentiment and the direction of the pair [1].
Foreign investors have sold approximately USD1.2 billion of Korean equities, which has partially capped the KRW's gains despite supportive exporter flows. The external environment has become more favorable overnight, with the USD, US Treasury yields, and oil prices all easing, potentially allowing USD/KRW to move lower in the near term if exporter dollar supply continues [1].
On the policy front, South Korea's Finance Minister Lee Hyoung-il stated that the government will actively work to stabilize the foreign exchange market amid uncertainties related to the Middle East conflict and monetary policy in major economies. He also reiterated the government's commitment to advancing the internationalization of the won and reducing barriers to foreign investment [1].
Technical analysis indicates that bullish momentum in USD/KRW has faded, with the Relative Strength Index (RSI) declining and risks skewed to the downside. Key support levels are identified at 1333, which is the 2026 low, and 1320, while resistance is at 1350 and 1357 (the 21-day moving average) [1].
CONCLUSION
The South Korean Won is currently supported by exporter dollar selling and a softer external backdrop, though foreign equity outflows remain a constraint. Market participants are closely watching upcoming technology earnings and government policy actions for further direction. Technical indicators suggest downside risks for USD/KRW in the near term.