The South Korean won led falls among Asian currencies, with moves linked to higher oil prices, firmer US Treasury yields, a softer risk tone, and heavy foreign equity outflows.
USD/KRW was last near 1493 and is expected to remain choppy, with wider swings possible if oil stays elevated and global risk sentiment remains fragile.
Technical signals showed daily momentum turning mildly bullish while the RSI rose, with near-term risks tilted to the upside.
Resistance levels were cited at 1501 and 1510, based on a 23.6% Fibonacci retracement of the 2026 low to high.
Support was placed at 1474–1478, aligning with the 21-day moving average and a 50% Fibonacci level.
The approach described was to avoid chasing USD/KRW higher and instead sell rallies, while noting Korea’s AI and export exposure and a still-resilient semiconductor cycle as medium-term supports once geopolitical and rates pressures ease.
We have seen the South Korean Won come under renewed pressure, with the USD/KRW exchange rate currently trading near the 1495 level. This weakness is being driven by a combination of elevated oil prices, firm U.S. Treasury yields, and a fragile risk tone in global markets. These factors have encouraged heavy foreign outflows from South Korean equities.
Given the choppy conditions, we would avoid chasing the USD/KRW pair higher from here. The near-term environment can create wide swings, especially with Brent crude holding above $90 a barrel and the U.S. 10-year yield remaining firm around 4.7% on inflation concerns. Derivative traders should instead look to fade rallies for a better risk-reward profile.
A practical approach in the coming weeks would be to selectively sell USD/KRW futures contracts or buy put options on the pair as it approaches resistance levels. This strategy positions for a pullback from what we believe are overextended levels. The goal is not to time the exact top but to strategically enter short positions during periods of strength.
Our medium-term confidence is anchored by Korea’s leverage to the AI and export cycle. Recent trade data for April 2026 confirmed this, showing exports rose for the seventh consecutive month, powered by a 45% year-over-year surge in semiconductor shipments. This fundamental strength should provide a strong backstop for the Won once market sentiment stabilizes.
Looking back, we saw a similar dynamic in the second half of 2025 when global rate uncertainty pushed the USD/KRW pair higher. However, the Won eventually regained its footing as Korea’s robust export performance, particularly in high-demand memory chips, reasserted itself as the primary driver. We expect this underlying trend to repeat.
Still, near-term risks remain skewed to the upside, so careful monitoring is necessary. We are watching resistance at the 1501 and 1510 levels, which would serve as points to reassess the size and timing of our positions. Support is forming around the 1474/78 area, which could be an initial target for these short-term trades.
