- USD/RUB will end the week down 6.18%, despite Friday’s jump.
- Hostilities between Russia and Ukraine and peace talks continue, but at a slower pace.
- USD/RUB Price Forecast: The bulls broke out of the 200 DMA and pushed the pair 500 pips higher.
The USD/RUB fell and reached a new monthly low at 75.6625, but is back above the 200-day moving average (DMA), which is at 78.2997, amid a mixed sentiment trading session. At the time of writing, USD/RUB is trading at 79.7500, up 0.64% on the day.
Market players ignored geopolitical nerves related to the war between Russia and Ukraine, as evidenced by the rise in global equities. Ukrainian adviser Podolyak said that negotiations with Russia continue online constantly, but the mood changed after the Bucha events.
Meanwhile, US Treasury yields remained higher on Friday, led by the 10-year Treasury yield rising five basis points to 2.70%, which supported the dollar. The US Dollar Index, a gauge of the dollar’s value against a basket of its rivals, is back below 100, up 0.09%, at 99,844, after hitting 100,189 for the first time since May 2020.
On Friday, the Russian Central Bank surprisingly cut rates by 300 bps, from 20% to 17%, as market players expected the central bank to remain on hold.
Elsewhere on Wednesday, the Federal Reserve released its March minutes. The Fed stated that most participants were eager to raise rates by 50 bps were it not for Ukraine. The Fed agreed to cap its balance sheet by $95 billion, $60 billion in US Treasuries and $35 billion in mortgage-backed securities (MBS). Additionally, the Minutes showed that participants wanted quantitative tightening to start in May, following the May 4 meeting, where market participants, as STIRS showed, are pricing in an 88% chance of a 50 bps hike. .
On Thursday, St. Louis President James Bullard said the Fed’s official interest rate was too low, by about 300 basis points. He added that the Federal Reserve is not that far behind and expects the Federal Funds Rate (FFR) to end the year around 3.5%.
Later in the day, Chicago Fed President Charles Evans said the Fed would likely go neutral, settling for late this year or early next.
USD/RUB Price Forecast: Technical Outlook
The USD/RUB’s bullish bias was tested when the price broke below the 200-day moving average (DMA) at 78.3059. On Wednesday, it was noted that “a daily close below the 80.3254 level would further extend losses, and USD/RUB could head towards the 200-day moving average (DMA)”. On Thursday, that happened, and a close at 79.2467 was achieved, opening the door for a test of the 200 DMA.
Earlier Friday, USD/RUB broke the 200 DMA and hit a daily low at 75.9810, but higher US yields supported the dollar and lifted the pair above the 200 DMA and beyond 79.5000. .
That said, the first resistance for the USD/RUB would be 82.7882. A break of the latter would expose essential resistance levels. The next supply zone would be the 100 DMA at 83.8276, followed by the 50 DMA at 92.63305.
Technical levels
Source: Fx Street
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