The ruble is on the verge of a global collapse
While global markets were waiting important news from U.S., able to determine the trends for the coming months, the ruble gently slide down.
At the start of trading on Monday, the cost of a pair USDRUB rose to 63.50. Careful trend of growth over the past two weeks. EURRUB has started the new trading week above 70.50, receiving support after a drop below 70 at some point.
It is noteworthy that oil prices remained in a fairly narrow corridor, without exerting additional pressure on the ruble. Moreover, on world markets remained moderately positive.
It is a signal that the ruble has become too heavy and sags under its own weight without external causes.
Among the important developments it is worth noting that the Bank of Russia in the end of last week cut rates by 25 points and gave the signal that the decline will continue.
Initially this caused even the strengthening of the ruble, as there was some expectation of a rate cut from 50 b. But if we talk about the prospect of a month in advance, yet for the course there are more potential risks than opportunities.
There is no smoke without fire. The fed and the ECB cut its rates in difficult times, and a sign of these difficult times is also the collapse of prices for raw materials and metals.
To risk is to classify the emotional component. Investors in rubles is almost used to the decline of the Russian currency in August. This can be self-sustaining fear: the ruble sell on fears of weakening, it is weakening, and more and more market participants are involved in the sale.
In July, while conspicuous increase in trading volumes in moments of weakness. That is, the majority of investors are ready to leave the ruble as soon as the reason. Such behavior is considered a classic sign of the end of the trend and a reversal.
On this basis, it would not be surprising if at the end of August the USD / RUB will return to the area above 65.5, while the combination of negative factors could be the surge to 67.
For EURRUB, this will mean you can roll back to 72 (at 1.10 on the EURUSD) and 72.70 (at 1.11) and a possible breakthrough in the area of 74-74.50.
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