USD/RUB Looks Set For Major Correction Before Russia Interest Rate Decision

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US Dollar/ Russian Ruble (USD/RUB) remained almost unchanged this week ahead of the interest rate decision by the Russian central bank which is scheduled on the next Friday. The pair is expected take some major correction around the current levels before resuming the upside rallies.

Technical Analysis

The pair is being traded around 35.90 at 12:00 GMT in London. Immediate support may be seen near 35.77, the intra-week low, ahead of 35.46 that is the 23.6% fib level of the most recent rally and then the 35.00 handle which is the swing low of the previous wave and psychological level. A break and daily closing below the 35.00 handle could push the pair into deeper correction, opening doors for 34.08 that is the 50% fib level.

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On the upside, the pair is likely to face a hurdle near 36.14, the intra-week high; ahead of 36.69 that is the high of the previous wave. The pair might also form a double top pattern on the daily chart for a deeper correction towards the 31.00 support area.

Russia Unemployment

The rate of unemployment in Russia decreased to 5.4% during March as compared to 5.6% in the month before, the government report revealed on Thursday (today). Analysts had predicted an increase in the unemployment to 5.7% hence the actual outcome upbeat the expectations. The pair might resume the downside movement following the unemployment release.

Retail Sales

A separate report by the Federal State Statistics Service of Russia revealed today that the retail sales ticked down to 4.0% last month as compared to 4.1% in the same month of the year before, again up beating the median projection of 3.04% decline.

US Durable Goods

On Thursday, April 24, the Census Bureau of the US is due to release the durable goods report. Last time the durable goods orders were seen standing at 2.2%. An increase in the durable goods orders will be seen as very bullish for USD/RUR and vice versa.

Interest Rate Decision

On Friday, April 25, the Central Bank of Russia is due to announce the benchmark interest rate decision. The central bank left the interest rate unchanged at 7.0% during the last monetary policy meeting. Any increase or decrease in the rate might spur high volatility in USD/RUR.

Trade Ideas

There could be two good strategies to trade USD/RUR. If we see no change in the interest rate from the Russian central bank then selling the pair above 35.80 could yield good results with a potential target around 33.50. On the other hand, if the pair breaks the 36.69 resistance area then buying the pair with a stop place placed near 30.00 could be a good strategy. It is however suggested to keep a close on the false breakouts and place the buy order on a daily close above 36.90.

To contact the writer of this story: Usman Ahmed at usman@forexminute.com