By: Christopher Lewis
The Russian Ruble is one of my favorite petro-based currencies to trade. The USD/RUB pair is highly sensitive to both oil and risk attitude. The oil markets will of course weigh heavily on this pair as Russia is such a large producer of it, and the “emerging markets” aspect allows for it to be a “risk on, risk off” pair as well. After all, BRICs is simply Brazil, Russia, India, and China.
The recent action in this pair has seen the Ruble lose ground against the Dollar, and as the oil markets have fallen overall, this isn’t a big surprise. The oil markets are absolutely vital for the Russian economy, and by extension you should keep an eye on the Light Sweet Crude and Brent markets when looking at these set ups. With this being said, the Light Sweet Crude markets formed a wicked hammer at the $95 support level to close the session on Monday, and this suggests that oil is about to bounce. If this happens – the Ruble should gain as well.
200 day EMA and 50% Fibonacci
The 30 level is a major one in this pair over the long run. The area also has several different things going on at the same time in order to make it a great place to look for a trade set up. The 200 day exponential moving average is currently just below it, and as a result there will be trend traders looking to add to their short positions in this area.
The 50% Fibonacci level is where the daily candle stopped at, and this shows that perhaps we could be looking at a continuation of the downtrend in the immediate future. This pair tends to grind overall, so a slow drop at this point wouldn’t be out of the ordinary. The pair would only be continuing the downtrend, and since it has been a bearish market long term, I prefer selling anyway.
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The fact that the markets stalled right at the 50% Fibonacci level and fell back below the 30 level has me interested in selling at this point. The short-term charts will be where I look for signals at, and I think the shooting star or bearish red candles are the kind of candles that will convince me. The hourly and four hour charts will be my guide. On signs of weakness, I am selling. Buying doesn’t interest me at all.