USD/RUB breaks solid support around 82.8000 aims towards the 80.00 mark
|- China’s March Caixin Manufacturing and Services PMIs fell below 50 for the first time since 2020, signaling its economy is slowing.
- A hawkish Fed speaking weighs on market sentiment, alongside Russo-Ukraine tussles.
- USD/RUB Price Forecast: The uptrend remains intact, but a daily close under 80.3254 might open the door towards the 200-DMA around 77.20s.
The USD/RUB slumps in the North American session amid a downbeat market mood courtesy of a worse than expected China’s Caixin Services PMI, which added to the Manufacturing PMI released last Friday, showed that both readings fell. Also, a hawkish Federal Reserve and extension of hostilities between Ukraine-Russia added a pinch of salt to the dismal sentiment. However, despite the aforementioned, the USD/RUB is trading at 80.0060.
Meanwhile, the US Dollar Index, a gauge of the greenback’s measure against a basket of its rivals, retreats from YTD highs, down 0.05%, sitting at 99.443. Contrarily, the US Treasury yields are rising.
The 10-year benchmark note sits at 2.62%, up seven basis points, as market players expect the release of March’s monetary policy minutes.
On Wednesday, Federal Reserve policymakers reiterated the need to normalize the economy. Fed’s Governor Lael Brainard spooked the markets, saying that the balance sheet reduction might begin in the May meeting, something unexpected by traders as they were looking to the July meeting. In the same tenor, Kansas City Fed Esther George said that a 50 bps move would be an option we must consider and emphasized that conditions favor going faster than before.
On the Geopolitical front, the fighting continues in Eastern Europe. Moscow said that work is ongoing when the next round of discussions with Ukraine occurs.
However, the USD/RUB held onto losses, breaking below the 82.7000 support area, unsuccessfully tested six times but gave way during Wednesday’s Asian Pacific session.
USD/RUB Price Forecast: Technical outlook
The USD/RUB upward bias remains intact, despite the strength of the fall. However, a daily close under the 80.3254 level would further extend losses, and the USD/RUB could aim toward the 200-day moving average (DMA) at 77.2027.
Upwards, the USD/RUB first resistance would be 82.7882. Breach of the latter would expose essential resistance levels. The next supply zone would be 85.00, followed by the 50-DMA at 88.7789. On the flip side, the USD/RUB first support would be 80.00. A decisive break would expose 78.0683, followed by the 200-DMA at 77.2027.
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