South Korea ETF (EWY) Price Forecast: Breakdown Risks Grow

Bearish Signals Strengthen After Peak Extension

The iShares MSCI South Korea (EWY) ETF has triggered fresh bearish signals on both the daily and weekly charts. This suggests a continued move lower toward key support levels, as sellers regained control on Thursday and extended the current correction. EWY peaked at $154.22 in February, followed by a reversal three-weeks ago that initiated the current retracement. That high represented an approximate 218% gain over 10 months, leaving the ETF in an overextended condition and vulnerable to a correction. Subsequent sharp selling drove a one-week decline to a four-week low of $121.55.

Bear Pennant Formation Signals Continuation Risk

On the weekly chart, an initial bearish trigger occurred with a break below two consecutive inside weeks on Thursday, followed by a more decisive trend continuation signal on a drop below the four-week low of $121.55. The two-week consolidation pattern formed in a relatively weak position, in the lower half of the large bearish reversal week from three weeks ago. This structure resembles a bearish pennant – more clearly defined on the daily chart – and is a typical continuation pattern within a developing downtrend.

Key Support Zone: Fibonacci Meets Moving Average

With confirmation of the bearish correction, EWY now appears on track to test support near the 38.2% Fibonacci retracement at $113.83 as an initial downside objective. Notably, the rising 100-day moving average – currently near $112.00 – aligns closely with this level. This reinforces the zone as a potential area of dynamic trend support, along with a nearby uptrend line. The 100-day average has acted as a key support indicator since being reclaimed in April 2025, and it has yet to be retested since, increasing the likelihood of an initial bullish response on first contact, if reached.

Breakdown Scenario Opens Path to Lower Targets

Moreover, this confluence of the uptrend line, longer-term moving average, and Fibonacci retracement establishes the $113.83-$112.00 price zone as a critical pivot area. A decisive breakdown below this region would significantly weaken the bullish structure and likely open the door to further downside. As marked on the chart, an initial measured move objective derived from the pennant projects towards approximately $100.30.

This target gains added significance due to its alignment with the 50% retracement at $101.36 and prior trend high from October at $100.79, forming a secondary confluence zone. If the 100-day moving average fails to hold as support, this lower region becomes a high-probability downside target.

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