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USD/KRW is at very close to the Credit Suisse anlayst team key objective of 1109/05, suggesting caution is warranted in chasing further Asian currency strength and that the market can see a rotation into “higher beta” EM FX, in line with the broader global value rotation. 

Key quotes

“USD/KRW has been one of our preferred expressions of USD weakness for nearly six months now and the aggressive collapse following the completion of a top in October has extended to our flagged next objective at 1109/05 – the series of lows seen from August 2018 through February 2019 and the 78.6% retracement of the 2018/2020 bull trend.” 

“The currency pair has shifted into a near-term consolidation phase as expected and in line with weekly RSI momentum in oversold territory. All this suggests some caution is warranted in chasing the market lower for now, with the recent consolidation likely to extend for a while yet.” 

“Big picture though, the broader risk stays seen lower for an eventual move below the gap support at 1098, which would expose the 1054 low of 2018.”