US Dollar vs South Korean Won edges lower as South Korea pension fund USD sales weigh on the pair

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US dollar vs won slides 1.03% today

Highlights

South Korea's national pension fund initiated significant dollar selling to hedge currency risk, increasing institutional supply of USD and supporting the won.
These hedging operations aim to stabilize the won as heightened volatility persists around elevated USD/KRW levels.
Technicals show USD/KRW trades below key averages with bearish momentum and a 1,500.49–1,521.77 range, favoring further downside risk.

Pension fund dollar sales fuel won strength amid hedging activity

South Korea's national pension fund was reported by Reuters to have conducted foreign exchange hedging operations on Monday, involving substantial dollar selling as the USD/KRW level remained elevated. This action represents direct institutional supply of US dollars on the market, increasing demand for the Korean won and helping to exert downward pressure on the currency pair. The transaction reflects efforts to stabilize the won amid volatility, as institutional participants actively manage currency risk.

Selling pressure deepens as bearish signals dominate below resistance

On the technical front, USD/KRW is positioned below both the MA-20 at ₩1,524.92 and the MA-50 at ₩1,538.47, yet remains above the daily MA-200 at ₩1,473.85. The nearest resistance is found at the Ichimoku Kijun level of ₩1,531.17, while immediate support lies at ₩1,500.49. Momentum indicators are firmly bearish: both MACD and ADX are on sell signals, with the RSI extremely low at 23.28, and Stoch RSI, CCI, and BBP all signaling strong seller dominance. The Awesome Oscillator confirms intraday downside momentum, while low volatility underscores the persistence of current selling pressure.

Further downside likely as bearish bias prevails within set range

Looking ahead, the expected price range for USD/KRW in upcoming sessions is ₩1,500.49 to ₩1,521.77, representing the typical volatility band relative to current levels. There is a 79% probability of further decline, compared with a 21% chance of a meaningful rebound. The baseline scenario calls for continued trading within this range, while an upside break would require sustained movement above the Kijun at ₩1,531.17. Heightened bearish momentum would be confirmed if the support at ₩1,500.49 fails.

Anton Kharitonov, expert at Traders Union, sees the recent move by South Korea's national pension fund as a significant fundamental catalyst for sustained downside pressure in USD/KRW. Technical momentum is strongly bearish, with key support at ₩1,500.49 now in focus. He remains cautious due to persistent institutional selling and negative momentum signals. "Base case remains bearish while price stays below the Kijun at ₩1,531.17 — further selling is likely if support at ₩1,500.49 breaks."

Earlier, analysts noted that USD/KRW maintained a bullish structure, though overbought conditions and mixed momentum signaled potential directional uncertainty. Emerging institutional selling, reinforced by the pension fund’s hedging activity and clear bearish momentum, now shifts the focus to whether support at ₩1,500.49 can withstand further downside pressure as sellers dominate the near-term outlook.

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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