Barclays trade for the week ahead: Long USD/KRW

We expect the BoK to cut rates, although the consensus expectation is for policy to be unchanged (Thursday). Korea is particularly vulnerable to China’s slowdown, while BoJ likely easing in October adds new risks for the KRW given the close economic competition and currency correlation between the two countries. As a result, we see value in being long USDKRW heading into the meeting. Technically, we remain bullish USDKRW. Recent corrective weakness is seen as a healthy breather within the context of the greater rising trend. A confluence of support near 1150 provides nearby buying interest for a move back towards the 1208 range highs. We look for a break above 1208 to confirm upside traction towards our greater targets towards 1219 and then 1276, the highs of 2010

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