The ruble will fall, despite a desperate struggle
The ruble sometimes can surprise. Despite the strengthening U.S. dollar, ignoring the oil and despite the heavy discussion of sanctions, the Russian currency on Friday was added. USDRUB dropped by the end of the day at 7 cents to 63.34 and EURRUB lost 18 cents to 73.23.
However, unlikely to be taken Friday’s momentum as an indicator that the ruble has lost sensitivity to sanctions. Such a hypothesis has the right to life. Since April, when the U.S. Treasury moved to block the accounts of individual companies and natural persons, non-residents actively withdraw capital from Russian assets.
More likely looks cause purchases of the ruble near important resistance level of the range of the last four months. Since April the pair USDRUB is set to decline in demand for the cheapened ruble near 64.
Ruble still faces a weakening in spite of Friday’s momentum. The upcoming elections to the U.S. Congress, apparently, forces legislators to compete about who is more promise to punish Russia for meddling in the election. It is therefore likely to further exaggeration and rhetoric on the topic.
From the technical analysis also the picture does not look optimistic for the ruble. Kickbacks down the Russian currency after reaching the field of 64 is getting smaller, indicating the decrease of interest in buying of the ruble on the downs.
Probably the milestone in this confrontation, the dollar will be the dynamics of EURUSD. Key pair the foreign exchange market approached the lower boundary of the trading the last three months. This is an important area of support, below which are many orders.
A fall below 1.15 is able to launch an avalanche of triggering stop orders and open the way for a pretty quick decline down to values close to 1.10, without meeting on the way of major technical support levels.