USD/KRW fails at the 1245 high of 2016, 1175 offers solid support – Credit Suisse

USD/KRW is trading at 1213.90 after reversing back lower from the 1245 high of 2016 and analysts at Credit Suisse expect further weakness with a move below 1196 in due course.

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Key quotes

“With a major momentum divergence in place and weekly MACD momentum turning lower, we expect a move below the 200-day average at 1196 in due course. Removal of here could then see a fall back to the potential uptrend from 2018 and the 50% retracement of the 2018/2020 surge at 1175/73, which may prove resilient support. A break beneath here though would suggest the market may be undergoing a larger topping process, although only a move below the more important 61.8% retracement, July 2019 and current 2020 low at 1150/46 would confirm this.”

“Above 1245 on a sustained basis would hint at another attempt to establish a large base.”