US dollar to South Korean won rate holds near ₩1,485 support amid renewed Middle East tensions

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US Dollar vs Korean Won drops 0.63%

Highlights

Renewed Middle East tensions triggered risk aversion, driving the Korean won lower as investors sought safety in the US dollar.
A 9% fall in Seoul shares underscored heightened market sensitivity to geopolitical developments and contributed to volatility in USD/KRW.
USD/KRW trades below key moving averages with short-term downside momentum prevailing; price likely consolidates between ₩1,485 and ₩1,505, with increased probability of further declines.

Safe-haven flows increase as Middle East tensions drive risk aversion

Renewed Middle East tensions sparked a decline in the Korean won on Monday, as risk aversion led investors to seek safer assets such as the US dollar. According to Koreaherald, this shift in sentiment followed a 9% drop in Seoul shares, highlighting the sensitivity of the currency to broader geopolitical developments. These external shocks contributed to heightened volatility in the US Dollar vs South Korean Won exchange rate.

Bearish momentum persists as USD/KRW struggles below short-term resistance

On the hourly chart, USD/KRW is currently positioned below the MA-20 at ₩1,502 and the MA-50 at ₩1,506, while remaining above the MA-200 at ₩1,482. The Ichimoku Kijun line at ₩1,503 acts as immediate resistance, with support found near ₩1,485. Momentum indicators are mixed: the Moving Average Convergence Divergence (MACD) signals a strong sell, while the Average Directional Index (ADX) remains neutral, pointing to weak directional conviction. The Relative Strength Index (RSI) stands at 42.09, indicating a sell bias, and Bull/Bear Power shows the pair as oversold. However, both Commodity Channel Index (CCI) and Stochastic RSI are neutral, reflecting a divergence between downside momentum and broader indicator consensus.

Downside risk prevails as consolidation likely without resistance break

Over the next two to three trading days, USD/KRW is expected to consolidate in a typical volatility band between ₩1,485 and ₩1,505. The probability of a short-term upward move is very low, with further declines more likely unless there is a reversal above immediate resistance at ₩1,503. If the pair breaks below the ₩1,485 support, additional downside may open up, while a close above ₩1,503 would be required to shift momentum higher.

Anton Kharitonov, expert at Traders Union, sees USD/KRW under pressure as global risk aversion hurts the won and technical signals show persistent weakness. He notes that major moving averages and momentum indicators point to downside risks, especially with renewed Middle East tensions driving safe-haven demand for the US dollar. The analyst remains cautious unless a breakout above ₩1,503 confirms a reversal. "Until USD/KRW recaptures ₩1,503, I expect the selling bias to persist and would avoid aggressive long positions."

In a recent review, analysts highlighted that sustained foreign capital outflows and increased overseas investment had kept the Korean won under persistent pressure against the US dollar amid heightened market volatility. The current backdrop of renewed geopolitical tensions and accelerating market declines adds a fresh catalyst to this downtrend, making a break below ₩1,485 a key risk for near-term moves in USD/KRW.

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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