- The US dollar pulled back just a bit during the course of the trading session on Wednesday, as the 88 level was tested.
- The 88 level is an area that a lot of longer-term traders will be paying close attention to, and therefore the fact that we turned around to send this market higher suggests that we are more or less at the bottom of the range that is now being confirmed.
Keep in mind that the Russian ruble has been a little bit of a pariah for several countries at the moment, as we continue to see a lot of sanctions being put in place against Russia, but it seems like the Russians have simply forgot to have their economy fall apart. In fact, Russian GDP is north of 5%, so this is part of why the Russian ruble has done better than anticipated. Quite frankly, this is a market that I think continues to see a lot of volatility, and of course the US dollar is favored in general, but at the end of the day you have to keep in mind that the Russian ruble is not necessarily going to disintegrate.
Technical Analysis
Looking at this price chart, the 88 level will continue to be supported, while the 200-Day moving average EMA above is an indicator that could offer a little bit of resistance. If we can break above there, then the 50-Day EMA is the next target, which is sitting near the 91.20 level. If we can break above there, the 94 level would be resistance and the ceiling as well. All things being equal, this is a market that has been sideways for some time, and it is worth noting that we bounce from the bottom of that potential sideways pattern.
On the other hand, if we were to break down below the 86.50 level, then it opens up a move down to the 84.50 level over the next several days. Keep in mind that this would more likely than not coincide with the US dollar falling in general, due to the fact that we have seen the US dollar moving in both directions.
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