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 pair is around 1339, with risks skewed lower towards supports at 1333 and 1320, while resistance is seen at 1350 and 1357, making upcoming technology earnings crucial for sentiment.

Exporter flows and softer backdrop

"USD/KRW continued to trade heavy. Market chatters of exporter dollar selling provided some support, while importer demand and continued foreign equity outflows partially capped the currency’s gains. Foreign investors sold around USD1.2bn of Korean equities."

"On the policy front, Finance Minister Lee Hyoung-il said the government would work actively to stabilise the FX market amid uncertainty stemming from the Middle East conflict and monetary policy in major economies. He also reiterated plans to push ahead with the internationalisation of the won and lower barriers to foreign investment."

"The external backdrop has turned somewhat more supportive overnight, with the USD, US Treasury yields and oil easing. Near term, this could allow USD/KRW to extend lower, particularly if exporter dollar supply persists."

"However, continued foreign equity outflows remain a constraint, with upcoming technology earnings an important test of foreign investor sentiment."

"Pair was last at 1339 levels. Bullish momentum on daily chart faded while RSI fell. Risks skewed to the downside. Next support at 1333 (2026 low), 1320 levels. Resistance at 1350, 1357 (21 DMA)."