USD/KRW Price Analysis: South Korean Won extends two-day winning run

• USD/KRW drops to the 50-day average support on dollar selling. 
• South Korea's above-forecast industrial output data may be boding well for the won (KRW).
• The pair looks set to challenge the 2020 uptrend line.

South Korean Won is better bid for the third straight day on Wednesday and pushing the USD/KRW lower. 

At press time, the pair is trading around the 50-day average support at 1,217, which if breached would expose the support of the trendline rising from Jan. 14 and March 4 lows. At press time, the trendline support is located at 1,213. 

A violation there would imply an end of the rally from the January low of 1150 and could invite stronger selling pressure. 

On the higher, 1,240 is the level to beat for the bulls, as the pair has failed twice to keep gains above that level this month. 

As of now, a drop to the ascending trendline support looks likely, courtesy of the broad-based dollar weakness. Further, South Korea's official data released in early Asia showed factory output unexpectedly expanded at its sharpest pace in nearly 11 years in March, despite the virus-related disruption in China. 

Industrial output rose by a seasonally adjusted 4.6% in March to register its biggest expansion since 2009 and bettered expectations for a 1.3% fall tipped in a Reuters survey. 

Daily chart

Trend: Bearish

Technical levels