- The US dollar dropped to the downside during the trading session on Wednesday, as traders have ran away from the US dollar.
- This has been across the Forex world, so it’s not a huge surprise to see that the Russian ruble has also garnered bit of strength.
- That being said, it’s probably worth noting that we are approaching a significantly supportive area in the form of 87.50 rubles.
Taking a look at the USD/RUB technical analysis, the 87.50 level is an area that a lot of people will be watching, but I also would point out the fact that the Stochastic Oscillator is likely to see a bit of a turnaround, meaning that we might be in an oversold condition. The 87 level underneath is the “floor in the market”, with the 94 rubles level above being the top.
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Ultimately, this is a market that I think we continue to see a lot of noisy behavior in, and with that being the case, it’s likely that we will continue to see a lot of back and forth. However, you can also keep in mind that the USD/RUB pair has a lot of geopolitical ramifications attached to it as well. The Americans are supposedly thinking about doing yet another round of sanctions against the Russians, but in case you haven’t noticed, it looks like India and China quite frankly don’t care. As long as that’s the case, the Russian economy will be fine.
Geopolitics
All things being equal, this is a pair that you can see a lot of noise in, especially due to the geopolitics involving the Ukraine war, the demand for crude oil, and then of course the fact that it seems like we are in the 1980s again, as the Cold War seems to be firing up. Russian naval presence in the Cuban ports of course has a significant amount of questions being asked, and at this point it seems like geopolitics will continue to be a bit of a messy set of events.
All things being equal, I think this is a market that probably rallies from here, but I don’t necessarily see a huge move. If we were to break down below the 87 rubles level, then we could drop down to the 85 rubles level. On the other hand, if we were to break above the 90 rubles level, it’s possible that we could rally toward the 93 rubles level, although it would probably take some time to get there.
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