The South Korean Won (KRW) has recently demonstrated notable strength against the US Dollar (USD), with the USD/KRW exchange rate dropping from nearly 1,560 at the beginning of the month to briefly below 1,500, before rebounding. According to Christopher Wong of OCBC, this appreciation is primarily attributed to flow-driven factors, such as offshore fund repatriation and heightened official vigilance, rather than improvements in macroeconomic or risk conditions [1].
Despite a less supportive macro backdrop—including a spike in oil prices, renewed geopolitical concerns, and underperformance of the KOSPI—KRW continued to outperform. Wong notes that the inflows and repatriation of funds raised offshore, along with Korea's shift to 24-hour trading of USD/KRW, have contributed to the currency's resilience. Official vigilance remains high, further supporting the KRW [1].
From a technical perspective, bearish momentum on the daily chart persists, although the Relative Strength Index (RSI) indicates tentative signs of a turnaround from near-oversold conditions. Key support levels are identified at 1,495 (100-day moving average) and 1,490 (50% Fibonacci retracement of the 2026 low to high), while resistance is seen at 1,511 (50-day moving average) and 1,528/29 (21-day moving average, 23.6% Fibonacci retracement) [1].
Looking ahead, Wong suggests that while flow dynamics may continue to support the KRW in the near term, a sustained break below the 1,500 level would require a more benign environment for the Dollar, oil, and equities. If these broader market conditions deteriorate, the KRW's gains may moderate [1].
CONCLUSION
The South Korean Won's recent strength is primarily driven by supportive fund flows and official vigilance, rather than improvements in macroeconomic fundamentals. While technical indicators suggest ongoing bearish momentum for USD/KRW, further sustained appreciation of the KRW will depend on a stable backdrop for the Dollar, oil, and equities.