The USD/RUB has moved to mid-term lows in early trading this morning and this comes on the heels of a warning that U.S Treasury Secretary Janet Yellen delivered to European Banks.
- U.S Treasury Secretary Janet Yellen has been in Frankfurt, Germany this week and warned European banks to restrict their dealings with Russian enterprises.
- If the banks do not comply they have been told U.S sanctions could hit their enterprises via the U.S Treasury.
- Apparently not enough fear was caused by these words from Yellen, because the Russian Ruble has gained in strength the past day and as of this morning touched a low fractionally below the 89.0000 level.
While the price after hitting this morning’s lows, which challenged marks not seen since the 1st of February, then reversed upwards, the current value of 90.1600 is within a range that saw sustained trading in the first week of March this year. The USD/RUB in many respects continues to correlate with the broad Forex market. Thus, even as U.S threatened sanctions shadow Russia and the Ruble, the facts on the ground via the value of the USD/RUB suggest plenty of trading is still being done.
Speculative Bearish Notions in the USD/RUB
While trading the USD/RUB via cash exchanges is not particularly easy, day traders can make use of their brokerage platforms to speculate on the currency pair. The incremental bearish trend in the USD/RUB since the 1st of May also correlates to the broad Forex market. For all of the talk trying to cut off the Russian Ruble from international banking, the USD/RUB continues to demonstrate it is trading according to the weaker notion financial institutions have about the USD over the mid-term due to the belief the U.S Federal Reserve will have the ability to cut the Federal Funds Rate at some point this year.
Today’s quick price action which flashed to mid-term lows shows that momentum in the USD/RUB can be volatile and provide speculators with opportunities. Traders of the USD/RUB should not bet blindly on the currency pair and use technical charts, the move higher after today’s low is a sign of health and normalcy. Reversals are part of Forex and the ability of the USD/RUB to create steady fluctuations is what most speculators will want to see in order to take advantage of their chosen direction.
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U.S Economic Data and the USD/RUB
While the U.S government tries to cause problems for the Russian Ruble, the currency pair remains capable of being speculated on by traders. Today the U.S will release its Fed FOMC Meeting Minutes, but this will likely have only a limited impact on the USD/RUB. Tomorrow’s Purchasing Managers Index reading from the U.S Manufacturing and Services sectors however could create some impetus for the USD/RUB.
- If U.S economic activity comes in weaker than anticipated tomorrow, and Friday’s Consumer Sentiment readings are worse, this could help USD/RUB bearish momentum to remain intact.
- The USD/RUB can be volatile and traders are urged to use proper risk management.
- The support level of 90.0000 is technically important in the USD/RUB and needs to be considered by traders considering speculative bets on the currency pair.
- It is advisable that traders use take profit orders to try and capture their targets before the risk of sudden reversals occur.
USD/RUB Short Term Outlook:
Current Resistance: 90.4050
Current Support: 90.1010
High Target: 90.7500
Low Target: 89.6000
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