USD/RUB upside run out of legs near 63.60

Pablo Piovano FXStreet

The Russian currency is trading on a softer tone on Wednesday, with USD/RUB slipping back from earlier tops in the 63.55/60 band.

USD/RUB attention to oil, FOMC

The pair clinched fresh 5-week tops near 63.60 in early trade despite the persistent sell off around the US dollar.

In addition, crude oil prices are extending the recent decline and dragging the barrel of Brent crude to 5-week lows around $47.30, all adding to the offered bias around RUB.

Later in the session, the FOMC meeting is seen delivering a hawkish statement and reinforcing the scenario of higher rates by year-end.

On the Russian data front, inflation figures for the month of October and Markit’s Services PMI are due on Thursday followed by the weekly report on FX Reserves held by the CBR.

USD/RUB levels to watch

At the moment the pair is advancing 0.17% at 63.42 facing the next up barrier at 63.56 (high Nov.2) followed by 63.72 (55-day sma) and finally 64.13 (100-day sma). On the downside, a break below 61.85 (2016 low Oct.10) would expose 60.70 (low Oct.9 2015) and then 48.79 (low May 13 2015).

1. R3 64.3543
2. R2 63.9154
3. R1 63.6254
PP 63.1865
1. S1 62.8965
2. S2 62.4576
3. S3 62.1676

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Week ahead: Summer lull could be tested by geopolitics and central bank expectations

It has been a relatively monotonous week, with the US dollar desperately trying to recover from last Friday’s nonfarm payrolls-induced losses, the main equity indices trading mostly sideways amidst a quiet earnings calendar, and sovereign bond yields reminding everyone of their pivotal role in the current financial system. These market moves are partly connected to the Middle East developments.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.