USD/KRW Price Analysis: South Korean won corrects further from 7-week tops on exports slump
|- USD/KRW extends rebound for the second straight day.
- USD bounce and S. Korea’s exports slump underpin.
- Focus stays on USD trades ahead of the US macro news.
USD/KRW extends its recovery mode from seven-week lows into a second straight day on Friday, as the bulls take advantage of the broad-based US dollar rebound and downbeat South Korean fundamentals.
The South Korean won came under aggressive selling after the country’s exports suffered the worst slump in 11 years due to the coronavirus pandemic impact. The Trade Ministry data showed that exports dived 24.3% YoY in April. Asia’s fourth-largest economy saw its biggest contraction since 2008 in the first quarter.
Meanwhile, a generalized comeback staged by the US dollar amid risk-off market profile also aided the ongoing recovery in the cross. The US dollar index slumped on Thursday, in light of the month-end flows and rebalancing while downbeat US economic data combined with a dovish Fed continued to keep the buck undermined.
The attention now shifts towards the US Manufacturing PMI reports from both Markit and ISM while fresh US-China trade tensions will continue to weigh on the investors’ sentiment.
At the time of writing, USD//KRW rises 0.60% to trade near 1,221.50, with the bulls looking to regain the 10-DMA at 1,224.22 on its way to 1,230. To the downside, the 5-DMA at 1,217.96 will be the immediate hurdle, a break below which the seven-week low of 1,203.75 will be back in play.
South Korean won: Additional levels to watch
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