FxWirePro: South Korean Won Falls on the Back of Lower Than expected CPI Data
- USD/KRW is currently trading around 1190 levels.
- Overnight South Korea released CPI data with negative numbers.
- South Korea’s May CPI growth Y/Y decreases to 0.8 % (forecast 0.90 %) vs previous 1.0%. In addition, CPI growth M/M decreases to 0.0 % (forecast 0.20 %) vs previous 0.1 %.
- On the other side, South Korea’s April current account balance decreases to 5.14 bln $ vs previous 10.07 bln $ (revised from 10.07 bln $).
- South Korea’s May trade balance prelim decreases to 7.1 bln $ vs previous 8.80 bln $.
- Intraday bias remains bullish till the time pair holds key support at 1177 marks.
- A daily close above 1194 is required to drag the parity higher towards key resistances at 1195, 1201, 1209 (20D EMA) and 1220 (March 03, 2016 high) marks respectively.
- Alternatively, a sustained close below 1182 will tests key supports at 1172, 1162, 1153 (November 2015 low) /1142 (20D EMA)/ 1134/1127 (October 2015 low) /1121/1115 levels respectively.
- Daily chart showing the 20D EMA has crossed over 30D and 55D EMA, which signals bullish trend. In addition, a sustained close above 1194(high as on May 24, 2016) is also required to confirm the same.
We prefer to take long position in USD/KRW only above 1194, stop loss 1177 and target 1209 marks.