USD/RUB analysis: Russian ruble could surge by 10% soon

November 30, 2023 08:00 PM PST | By Invezz
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The USD/RUB exchange rate has come under pressure in the past few weeks as the Russian ruble rallied. The pair retreated from a high of 102.54 on October 9th to a low of 89.20. It is sitting at the lowest level since July 27th. It remains over 76% above the lowest level in 2022.

Russia’s economy is doing well

The USD/RUB pair has struggled in the past few weeks, helped by the strong Russian economy and the tumbling greenback. It has also slumped, helped by the stable price of crude oil.

Economic data published this week showed that the Russian economy did well in October. According to the statistics agency, business confidence rose from 4.6 in September to a high of 6.6 in October. This is an important number because highly-confident companies invest more in an economy.

Another report showed that the Russian unemployment rate dropped to 2.9% in October from the previous 3.0%. This means that the jobless rate in the economy is lower than in the United States, which jumped to 3.9% in the previous month.

Retail sales also continued advancing in October as they rose by 12.7%, better than the median estimate of 11.2%. Industrial production rose by 5.3%, higher than the expected 5.1%.

Therefore, these numbers paint of an economy that is doing well in a challenging environment. For one, it has become the most sanctioned country in the world following its invasion of Ukraine.

Russia has succeeded by pivoting its business to Asian countries like China and India. It has also found out ways to avoid the crude oil price cap by European and the United States. The most recent data shows that the price of Russian urals stand at over $70 a barrel, higher than the price cap of $60.

Another report revealed that Russia’s foreign reserves are soaring. Its reserves rose from over $581.2 billion in September to over $587 billion in October.

The USD/RUB has also slipped because of the weak US dollar as inflation falls. The most recent data shows that most analysts expect that the Fed will start slashing interest rates in the first half of the year.

USD/RUB technical analysis

USD/RUB

USDRUB chart by TradingView

The daily chart shows that the USD to RUB exchange rate formed a double-top pattern at 102.54. In price action analysis, this pattern is one of the bearish signs. It has also moved below the neckline of this pattern at 91.42. 

The USDRUB pair has moved below the 50-day and 100-day moving averages. Notably, it has also formed a bearish flag pattern. Therefore, the pair will likely continue falling as sellers target the key support at 80. This target is about 10.32% from the current level.

The post USD/RUB analysis: Russian ruble could surge by 10% soon appeared first on Invezz


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