In our last report dated 19-June-07 , when the USDKRW was 929, we had suggested a target of 922.3 on a break below 926. The USD fell to a low of 899.50 on 31-Oct-07 . It then bounced back to 958.00, and has fallen back subsequently to the current level of 946. Reportedly the BOK said, “The current sharp fall in the Won is unlikely to continue”.
Long Term (3-4 Months): Ranged within 960.00 and 900.00
Unlike most other currencies, the Korean Won has been weak against the Dollar since November-07, when it hit a high of 899.50. KRW then fell to a low of 958.00 in Jan-08.
In the weekly chart given above, note that the USD-KRW topped at 958.00 just above its 2007 high of 952.00. Importantly BOK reportedly thinks that “the Won is weak near 958.00”.
his shows that BOK intends to keep the Won in a range of 900.00 and 960.00, this may last for of the first few months of 2008. Note the 200-Day MA at 927.13 is relatively flat (yellow line above), indicating a ranging market for the next few months.
6-Weeks: Support is at 940.00
USD-KRW rallied from a low of 899.50 (Nov-07) to a high of 958.00 earlier this month and it has started a “correction”. This correction has an important trendline Support at 940.00, a break below which could trigger a fall towards the 200-Day MA of 927.00. The interim Support is expected at 935.00. On the uspide the Resistance is at 955.00 – 958.00 which is likely to hold over the next 6-weeks
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