USD / RUB bounces away from daily lows near 73.70, watch CBR

• USD / RUB falls and bounces from the 73.70 region.
• The CBR raised the key interest rate by 25 bps to 4.50%.
• The focus is now on Governor E. Nabiullina’s press conference.

The Russian ruble regains some ground lost in past sessions and drags the USD/RUB to the region of 74.00 on Friday.

USD / RUB now look at CBR

After two consecutive daily rallies, the USD / RUB encountered moderate resistance at the 74.40 / 50 region, where the weekly highs and the key 200-day SMA converge. So far, the pair faced support near 73.70.

The downward movement in the pair comes after the Russian central bank (CBR) surprised markets and raised the key policy rate by 25 bps to 4.50% at its meeting on Friday. Previously, the market consensus pointed to a stable central bank stance (and a likely rate hike later this year).

According to the CBR, higher inflation expectations are the main reason behind the unexpected rate hike. The central bank added that the additional fiscal stimulus likely fueled pro-inflationary forces along with geopolitical events (sanctions) and improved domestic fundamentals.

Later in the session, CBR Governor E.Nabiullina will give the usual press conference. On the calendar, February retail sales and the unemployment rate will receive special attention.

Technical levels

Right now, the pair is losing 0.32% at 74.04 and a breakout of 72.53 (March 16, 2021 low) would target 70.00 (psychological level) and then 68.55 (June 23, 2020 low). On the other hand, the next barrier emerges at 74.47 (weekly high on March 19) followed by 74.83 (100-day SMA) and then 74.96 (monthly high on March 4).