- The US dollar pulled back slightly during the trading session on Friday, just as it did on Thursday against the Russian ruble.
- Furthermore, later in the day we did start to see buyers and it looks like we are going to continue to see a certain amount of support just below.
- This makes a lot of sense, due to the fact that the market has been very sideways for some time, and at this point in time I think it’s a situation where traders will continue to try to sort out whether or not there’s any real big move coming.
Despite the fact that most people had assumed that the Russian economy would collapse once the war in Ukraine started, the reality is that it hasn’t. In fact, there’s been times where the Russian economy was one of the best-performing in the world. The Russian ruble was one of the better performers at one point as well, although that may have just simply been people closing out shorts on their Russian ruble positions.
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Technical Analysis Suggests Further Consolidation
Looking at the technical analysis, it looks as if there is plenty of support below and that we will more likely than not stay in the same consolidation area that we have been in for some time. Underneath, it’s the 90 ruble level that I think it remains support, while the 94 ruble level above is significant resistance. What makes the 90 ruble area interesting, besides the fact that it is support, is the fact that we also have the 200-Day EMA hanging around that level. In other words, a lot of systematic and longer-term traders will be paying close attention to it.
Adding a little bit more credence to the idea of staying in the consolidation zone is the fact that the Stochastic Oscillator is starting to cross at a low reading. Yes, it is not all the way down at an oversold condition, but it tells us roughly the same thing anyway. With this, I think it is a market that will eventually try to go higher, at least in the short term. Whether or not we get a bigger type of move coming anytime soon remains to be seen.
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