technical analysis USDRUB

Technical analysis of USDRUB

The dollar’s uptrend against the ruble has paused in November so far amid oil’s recovery and higher uncertainty affecting the American currency. As the greenback posted losses against most currencies since the summer, USDRUB has been a prominent exception along with dollar-lira as these are some of the worst hit emerging currencies from the economic fallout of covid-19. Today’s technical analysis of USDRUB looks at the daily chart.

The clearest resistance on this chart is the latest high around ₽80.65. Low support is less clear but might be the low from early June near ₽68.50; however, this fairly distant area is unlikely to be challenged in Q4 unless there’s a dramatic shift in sentiment and fundamentals.

Technical indicators on USDRUB H4

 

Moving averages continue to print a strong buy signal, with each of the 50, 100 and 200 SMAs successively above slower lines. However, price has now moved below the 50 SMA. The next key support around the 100-day moving average is slightly below ₽75.

There is currently no sign of saturation from Bollinger Bands (50, 0, 2), but the slow stochastic (15, 5, 5) at 14 is clearly within the oversold zone. Combined with recent price action – see below – this might suggest a bounce. Bands have yet to contract during the current consolidation so volatility could remain fairly constant over the next few weeks.

Price action and Fibonacci

 

The overall uptrend since June was clearly a fundamental one. Conversely, the strong short-term upward movement from 27 October seems to have been driven more by liquidity. This makes yesterday’s doji an important signal that might suggest continuation of the main upward trend, especially considering its occurrence in oversold based on the stochastic and in the value area between the 50 and 100 SMAs.

Considering the weekly Fibonacci retracement areas, the only one to provide a clear support or resistance is the 23.6%. This was a resistance in early September, then a strong support since being broken. Given the doji and its context described above around this area yesterday, continuation downward is unfavourable. A bounce at least in the short term more clearly into the upper half of the daily Fibonacci fan looks likely.

Tomorrow’s key data: Russian unemployment

 

The most important release for dollar-ruble this week is tomorrow’s rate of unemployment for October from Russia at 16.00 GMT. The estimate at the time of writing stands at 6.4% compared with September’s figure of 6.3%.

Apart from this key figure, traders are also likely to monitor Brent (UKOIL). The ruble’s correlation with crude oil has remained generally strong in 2020 so far, so if Brent breaks clearly above $45 over the next few days we can expect some fundamental support for the Russian currency.

Technical analysis of USDRUB: summary

 

Overall the technical picture remains positive for dollar-ruble and more gains seem to be likely over the next few weeks. Fundamentals remain in view, though, with next week’s regular data on stocks of oil in the USA important for driving momentum and volatility. Traders should also not rule out the possibility of tomorrow’s unemployment data surprising markets and driving short-term movement for USDRUB.

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