Won 6 August 2011

Won 6 August 2011

USD/KRW - consolidate with upside bias on oversold technicals and positioning adjustment due to stronger dollar after Japan MOF intervened yesterday. Local equities saw an outflow of funds as Kospi lost more than 2.3% yesterday and more than 4.0% this morning amid renewed worries of a global double dip. But the medium-term view of a stronger KRW remains intact thanks to firm underlying fundamentals and talk of BOK hike at the next meeting. The chart is turning higher, with slow stochastic measure rising from oversold levels and MACD bullish, suggesting further upside in the pair. The 1-month NDF traded at 1,068-1,079 and closed at 1,078 in New York overnight. Dow Jones technical analysis shows immediate resistance is at 1,078 (100-day moving average), then 1,091 (June 16 high). Support at 1,070 (55-day moving average) before 1,055 (21-day moving average).