US Dollar vs South Korean Won falls over 1% as foreign capital inflows and Bank of Korea's 24-hour won settlement program spur selling

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Us dollar vs won slides 1.31% today

Highlights

USD/KRW posted a second consecutive decline as foreign capital inflows into South Korea increased and overseas investors gained new access to the won.
The Bank of Korea launched a pilot program granting 24-hour KRW settlement to foreign investors via new Registered Foreign Institutions for KRW Business accounts.
USD/KRW trades below key moving averages with a 71% probability of moving lower toward ₩1,343 to ₩1,369 over five days, with mixed momentum signals.

Foreign investor access shifts positioning amid broad selling pressure

The USD/KRW exchange rate recorded a second consecutive decline, as increased foreign capital inflows into South Korea were reported. The Bank of Korea has initiated a pilot program to enable 24-hour won settlement for foreign investors, introducing a new account type called Registered Foreign Institutions for KRW Business (RFI-Ks). This move is intended to provide more efficient and flexible access to the Korean won for overseas investors, potentially affecting capital flows and market liquidity, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees sustained downside risk for USD/KRW. He points to ongoing foreign capital inflows and the Bank of Korea’s new settlement mechanism as further weakening fundamentals for the pair. Technically, Kharitonov notes the inability to recover above ₩1,360 and continued trading below key moving averages. He highlights mixed signals from momentum indicators, which add uncertainty rather than hope for a rebound. "Persistent selling pressure and unresolved technical weakness keep USD/KRW vulnerable to further declines, so caution remains warranted here."

Viktoras Karapetjanc, expert at Traders Union, believes structural reforms by the Bank of Korea will attract stable foreign investment to South Korea. He sees the expanded 24-hour KRW access as a strategic move to boost liquidity and market depth. Karapetjanc expects the technical correction to be short-lived, seeing scope for renewed bullish sentiment if the pair moves above ₩1,360. "With enhanced access and capital flows, the USD/KRW market offers new upside opportunities and further growth cannot be ruled out."

Jainam Mehta, market strategist, takes a scenario-based approach. He notes the pair is consolidating after sharp declines, with volatility creating potential for tactical trades. Mehta observes a possible contrarian entry if support at ₩1,353 holds, but warns of further downside toward ₩1,343 if this level breaks. "A tactical long trade makes sense only with clear confirmation above ₩1,360, otherwise risk remains to the downside for USD/KRW."

Technical tug-of-war as persistent selling meets mixed momentum

USD/KRW is trading below the 20-day, 50-day, and 200-day moving averages at ₩1,360, ₩1,392, and ₩1,467 respectively, signaling continued seller pressure across all timeframes. Resistance is reinforced near the Ichimoku Kijun at ₩1,362, with immediate support at ₩1,353. Momentum indicators present a mixed picture: the MACD and ADX highlight strong selling pressure, but oscillators like RSI and CCI suggest some buying interest. The pair remains near session lows, with a 2.01% intraday volatility. Bull/Bear Power shows buyers dominating intraday momentum, yet both it and the Stochastic RSI are flagged as overbought. The Awesome Oscillator is neutral, offering little confirmation for the ongoing decline. These mixed signals highlight a tug-of-war across timeframes, as pressure after the open moves the pair toward its daily low.

Earlier, analysts noted that continued downward pressure in USD/KRW was reinforced by new measures to boost won liquidity and foreign investor access. The current technical landscape, with the pair struggling below key averages and persistent sell signals, heightens the importance of the ₩1,353 support level as a trigger point for further losses in the days ahead.

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

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