By: Christopher Lewis
The Russian Ruble is a great petrocurrency play for Forex traders looking to take advantage of movements in the oil markets. While not all brokers offer this pair, the market is without a doubt one of the “cleanest” plays for the oil markets.
Most of you will know about the USD/CAD and its correlation with the oil markets, but the pair has many other things that can influence it as well. For example, the Canadians send over 80% of their exports to the United States. Because of this, when things get bad in the United States, this pair can have a perverse move to the upside as the CAD is sold off in favor of buying Treasury bonds, which of course are denominated in US dollars. The main thinking of course is that the Canadians will have a weakened customer base, and as a result will suffer economically.
However, when speaking of the Ruble, we have a much more straight forward market to deal with. The oil markets are almost the entire influence on this pair. The trade between the two countries is miniscule, and as a result you don’t have so many cross currents. The average range is pretty tight, but the pip values are higher, so a move in this pair of 50 pips can really add up in a much larger manner than many of the other pairs you typically trade.
Shooting Star and 200 day EMA
The candle for the session on Monday saw a shooting star form at the top of the most recent consolidation range. Adding to the interest of this is the fact that the Light Sweet Crude markets also produced a similar candle. (A hammer, as this pair moves inversely to oil markets.) The 200 day EMA is just above, and a move lower would makes sense as we have a downtrend, and the recent area has been holding the markets within a 75 pip range over the last 2 months or so. With this being said, if we break below the bottom of the range for Monday, we should see this pair fall, and I will be short for about 50 pips.
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