The risk-on mix of Sino-U.S. phase-one...>

KOREAN WON: The risk-on mix of Sino-U.S. phase-one trade pact and UK election

results was a great boon to the won, triggering a sharp sell-off in USD/KRW over

the last week. The 50- and 200-DMAs gave way in the process and today the rate

had a look below the 76.4% fibo retracement of a rally from the Nov 8 low.

Momentum studies suggest that there is still room for a deeper retreat. The

50-DMA is heading towards the 200-DMA and a "death cross" would play into the

hands of already cheerful bears. It would also open up a chance for an attack at

the neckline at ~KRW1,155. Consolidation below that level would confirm the

formation of a major head & shoulders top over the last eight months.

- Keep an eye on underlying macroeconomic dynamics though. Uncertainty re: trade

war & Brexit may soon resurface, as the enthusiasm provoked by phase-one deal &

UK elex is already fading with difficulties piling up further afield. Regional

geopolitics clouds the outlook as U.S. attempts to revive talks with Pyongyang

continue to fall flat. Finally, South Korea has entered talks with Japan to

resolve their trade row, but there is no breakthrough on the horizon as of yet.

- See chart at: https://emedia.marketnews.com/marketnewsintl/USDKRW18122019.png