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USD/KRW Price Analysis: S. Korean won drops towards 3-week lows on a likely sharp GDP contraction

USD/KRW looks to retest 3-week highs above 1,240 amid risk-off.
Dollar bounce, a potential sharp GDP contraction for the South underpin.
No fresh update on N. Korean leader Kim Jong-Un’s health condition.

Dhwani Mehta FXStreet

The odds remain in favor of the USD/KRW bulls, given the bearish fundamental news from the South while the US dollar continues to draw the safe-haven bids amid coronavirus crisis-led global gloom and doom.

Adding to the bearish sentiment around the South Korean won, the latest Reuters poll showed that the economy is likely to see the sharpest GDP contraction since 2008 in the first quarter.

Key findings

“Gross domestic product (GDP) for the January-March period is expected to have contracted a seasonally adjusted 1.5% from the previous quarter, when it grew 1.3%, the median forecast from the survey of 10 economists showed.

This would be the worst contraction since a 3.3% drop in the final quarter of 2008, and the first since the Sino-US trade war hit growth in the first quarter of 2019.”

South Korean won: Coronavirus economic fallout weighs

The Asian currency remains undermined by the falling exports and battered business activity, as a result of the lockdowns due to the virus pandemic. South Korea’s exports collapsed for the first 20 days of April by nearly 27% YoY.

Further, the cross continues to find support from a lack of fresh information on the health condition of the North Korean leader Kim Jong-Un, who is supposedly not seriously ill but getting treated for some cardiovascular problem.

At the time of writing, USD//KRW adds 0.15% to trade near 1,235, heading back towards the three-week high of 1,241.23 reached a day before.

South Korean won: Levels to watch

USD/KRW

Overview
Today last price	1235.2
Today Daily Change	2.64
Today Daily Change %	0.21
Today daily open	1233.56

Trends
Daily SMA20	1221.43
Daily SMA50	1214.12
Daily SMA100	1192.92
Daily SMA200	1190.82

Levels
Previous Daily High	1241.71
Previous Daily Low	1219.25
Previous Weekly High	1230.16
Previous Weekly Low	1209.64
Previous Monthly High	1292.5
Previous Monthly Low	1176.33
Daily Fibonacci 38.2%	1233.13
Daily Fibonacci 61.8%	1227.83
Daily Pivot Point S1	1221.3
Daily Pivot Point S2	1209.04
Daily Pivot Point S3	1198.84
Daily Pivot Point R1	1243.77
Daily Pivot Point R2	1253.97
Daily Pivot Point R3	1266.23

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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