South Korean Won: Gains hinge on supportive flows against US Dollar – OCBC

Christopher Wong notes that Korean Won strength remains largely flow-driven, with USD/KRW dropping below 1,500 on offshore fund repatriation and official vigilance. While bearish momentum persists, Wong expects the pullback to moderate and sees a sustained break below 1,500 as requiring a benign backdrop for the Dollar, Oil and equities.

Flow-driven strength faces key levels

"KRW continued to outperform, with USD/KRW falling from almost 1,560 at the start of the month to sub-1500 briefly yesterday before rebounding. The move looks flow-driven rather than risk or macro-driven."

"KRW strengthened despite a less friendly macro backdrop, including the oil spike, renewed geopolitical concerns and KOSPI underperformance. USD/KRW appears to have been weighed by inflows and repatriation of funds raised offshore, while official vigilance has also stayed high as Korea shifts into 24-hour trading of USD/KRW."

"For now, flow dynamics may keep KRW supported, but a sustained break below 1500 may still require the broader USD, oil and equity backdrop not to worsen further."

"Bearish momentum on daily chart remains intact while RSI shows tentative signs of turnaround from near oversold conditions."

"Support at 1495 levels (100 DMA), 1490 (50% fibo retracement of 2026 low to high). Resistance at 1511 (50 DMA), 1528/29 levels (21DMA, 23.6% fibo)."