Why is the US dollar falling against the South Korean won today? Key support levels to watch

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US Dollar vs Korean Won falls 1.27%

Highlights

The Bank of Korea has started a 24-hour won settlement trial to let foreign investors execute cross-border won trades outside regular hours.
A parallel pilot allows foreign participants to settle won transactions through Registered Foreign Institutions without local bank accounts, improving global access and potential liquidity.
USD/KRW trades below key moving averages with all major momentum indicators negative, expected to stay in the ₩1,339 to ₩1,363 range with 75% probability of further declines.

Foreign investor access expands as Bank of Korea trials 24-hour settlement

The Bank of Korea has launched a trial of its 24-hour won settlement system for foreign investors, allowing participating domestic banks to execute cross-border won transactions outside of regular banking hours, according to Bloomberg. This move, accompanied by a pilot that enables foreign investors to settle won deals through Registered Foreign Institutions without the need for local bank accounts as reported by Dig, is designed to enhance market access and flexibility for global participants. Together, these changes increase potential liquidity in the Korean won and could reshape transaction flows from overseas investors, though price action has remained under broader selling pressure.

Technical sell signals intensify as USD/KRW oversold conditions deepen

USD/KRW is trading below the MA-20 at ₩1,369, the MA-50 at ₩1,378, and the long-term MA-200 at ₩1,467. The Ichimoku Kijun level at ₩1,369 serves as immediate resistance. MACD and ADX both signal sell conditions, while RSI stands at 13.08, highlighting an extremely oversold environment. Stoch RSI and CCI readings also indicate oversold status, and Bull/Bear Power continues to favor sellers. The Awesome Oscillator aligns with these bearish momentum readings, with no significant divergence among indicators.

Downside bias prevails as risk of further declines outweighs rebound odds

In the short term, the trading range for USD/KRW is expected to fall within ₩1,339 to ₩1,363, encompassing normal volatility around current levels. There is a 25% likelihood of an upside move, while the probability of continued downside sits at 75%. The base case is for the pair to stabilize within this channel, though a break above resistance at ₩1,369 would open the path for recovery. Conversely, a drop below critical support at ₩1,339 could accelerate further declines.

Viktoras Karapetjanc, Traders Union expert, sees the Bank of Korea's 24-hour won settlement trial as a pivotal step in boosting the Korean won's global accessibility. He believes expanding cross-border access is a constructive move that could gradually underpin demand for the currency. However, the analyst notes that current bearish momentum is dominant, with technicals pointing to further downside risks in the near term. 'Regulatory progress sets the stage for future stability, but for now, bearish sentiment prevails until USD/KRW stabilizes above ₩1,369,' Karapetjanc says.

Earlier, analysts noted that USD/KRW remained under sustained downward pressure, reflecting mixed technical signals and heightened volatility. The latest decline below multiple key averages, amid ongoing initiatives to boost won liquidity and an increasingly oversold market, heightens the risk of a deeper move lower, with support at ₩1,339 serving as a key level to watch for any potential acceleration.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.