USD/KRW trades flat as range-bound trading dominates after KOSPI selloff

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US dollar slides 0.64% vs Korean won

Highlights

South Korea's KOSPI index plunged 7.57% on October 15, triggering a circuit breaker as risk aversion increased.
Concerns over AI investment profitability and higher US inflation caused a shift from the Korean won to the US dollar, increasing USD/KRW volatility.
USD/KRW remains under sustained downside pressure with seller-dominant momentum, projected to trade between ₩1,326 and ₩1,347 over the next few sessions.

KOSPI-driven risk aversion fuels won losses on inflation anxiety

On October 15, the South Korean stock market recorded a sharp selloff as the KOSPI index fell by 7.57%, prompting the activation of a circuit breaker, according to Businessinsider. This event was attributed to mounting worries over the profitability of AI investments together with increased U.S. inflation, which collectively generated a pronounced risk-off environment. The resulting negative sentiment weakened demand for the Korean won as investors moved toward the relative safety of the US dollar, amplifying volatility in the USD/KRW pair.

Sell bias intensifies as USD/KRW holds below key resistances

USD/KRW is trading below its MA-20 and MA-50 on the hourly chart and remains well under the MA-200 on the daily timeframe. The Ichimoku Kijun level at ₩1,344 establishes immediate resistance, while MACD indicates a Sell signal and ADX is Neutral. Both RSI and CCI display a Sell bias, and Bull/Bear Power reflects an oversold reading, signaling dominant selling pressure intraday. Meanwhile, Stochastic RSI and Awesome Oscillator are neutral, contributing to a mixed technical picture in the short term.

Downside risk favored as range-bound trade persists

Over the coming 2–3 sessions, USD/KRW is expected to trade within a typical volatility band of ₩1,326 to ₩1,347. The probability of a meaningful upward move is considered very low, while a further downside scenario carries a much higher likelihood. If price consolidates within this range, it would align with the prevailing trend; however, a decisive break above ₩1,344 could trigger a bullish reversal, while a move below ₩1,326 would point to deeper declines.

Viktoras Karapetjanc, macro and sentiment analyst at Traders Union, believes recent volatility in USD/KRW reflects broader risk-off sentiment triggered by the sharp KOSPI decline and ongoing inflation concerns. He sees persistent downward momentum for the won, with technicals suggesting little room for a bullish breakout while fundamentals reinforce defensive positioning. Karapetjanc expects the pair to remain under pressure unless there is a significant shift in sentiment or macro data. "A decisive break below ₩1,326 could open the door for further won weakness, but as long as risk aversion prevails, buyers will likely stay on the sidelines."

Previously it was reported that USD/KRW was consolidating amid mixed technical momentum, with direction hinging on a decisive breakout. The current analysis builds on this view by highlighting an increased downside risk, making the ₩1,326 support level critical for traders monitoring potential further declines.

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.