USD/RUB
The dollar traded mixed against its G10 peers during the European morning Thursday. It was higher against NOK, GBP, NZD and AUD, in that order, while it was lower vs CHF and EUR. The greenback was stable vs JPY, SEK and CAD.
EUR started weakening after the disappointing French preliminary PMIs for April but recovered and gained even more after the Eurozone’s figures were announced. Even though the figures from the bloc’s largest economies, Germany and France, were disappointing and below expectations and the overall Eurozone indices for both manufacturing and services weakened, the fact that the Eurozone’s composite data managed to remain in expansionary territory for 22 consecutive months kept EUR supported. On top of that, ECB Executive Board member Peter Praet said at an event in Berlin that euro area is “seeing the beginnings of a cyclical recovery. But it is not yet a structural one.” EUR/USD rebounded from our support of 1.0660, confirming our view to wait for a break below that line to shift the bias to the downside.
UK retail sales missed expectations and rose only 0.2% mom in March, a slower pace than 0.6% mom previously. Even though the lower energy prices and slower inflation leave consumers with more money to spend, this was not reflected in the moderate rise in retail sales. Probably the uncertainty over the upcoming general elections outcome has caused consumers to wait until the risks over future policies fade out before spending. GBP/USD fell to find support near 1.4960 and bounced up again to gyrate around the 1.5000 level. As we get closer and closer to the elections, we could see Cable trading lower, below that psychological line.
USD/RUB has declined almost 30% this year following its peak in January, despite the gloomy forecasts about Russia’s economy, the low oil prices and the geopolitical turmoil. We are now seeing a stabilization period around 50, in line with the stabilization seen in oil prices. The strength of the Ruble is also attributed to tax payments as exporters sell their reserves to meet tax deadlines. Nevertheless, the central bank is expected to cut key rates further at its meeting next week even though the economy is still suffering from double-digit inflation. Therefore, the fundamental view suggests we could see USD/RUB rallying again in the near-future.
USD/RUB traded lower during the European morning Thursday, after hitting resistance at the 53.50 line. The pair has been trading within a downside channel since the 30th of January, therefore I would consider the short-term picture to be negative. I would expect today’s decline to continue and challenge again the support hurdle of 48.80 (S1), defined by the low of the 16th of April and the inside swing high of the 17th of November. The move that could trigger larger bearish extensions is a break below the 47.40 (S2) line. Something like that could prompt further declines towards the 44.00 (S3) zone. Our short-term oscillators increase the possibilities the continuation of today’s fall, at least towards 48.80 (S1). The RSI hit resistance near its 50 line and turned down, while the MACD, already negative shows signs of topping. It could move below its trigger line in the near future.
Support: 48.80 (S1), 47.40 (S2), 44.00 (S3).
Resistance: 53.30 (R1), 56.00 (R2), 58.30 (R3).
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