The USD/RUB exchange rate has been in a consolidation phase in the past few weeks. The USD to RUB rate moved to a low of 62.28, where it has been recently. It has risen by more than 22% from the lowest level in July. This price has crashed by about 60% from its highest level this year.
Fed and Russian central bank divergence
The USD/RUB price has strengthened in the past few months as the divergence between the Federal Reserve and the Russian central bank. In the United States, the Fed has maintained an extremely hawkish tone in the past few months. It has raised interest rates by 225 basis this year and intends to deliver another hike this month.
The Russian central bank, on the other hand, has maintained a dovish tone in the past few days. It has lowered interest rates from 20% earlier this year to 13%. Analysts believe that the bank will continue cutting interest rates in the coming months.
The recent rebound of the USD/RUB price has been because of the strong US dollar and the deteriorating situation in Russia. The country stopped natural gas flows to Europe as it protests the ongoing sanctions. As a result, demand for the Russian ruble has fallen modestly in the coming months.
The daily chart shows that the USD to RUB exchange rate has been in a tight range in the past few weeks. A closer look shows that it has moved to the 25-day and 50-day moving averages. At the same time, the pair has formed a symmetrical triangle pattern. The Stochastic Oscillator has moved close to the overbought level.
Therefore, the USD/RUB price will likely have a breakout in the coming weeks as the Fed continues tightening. Chances are that the breakout will be bearish. If this happens, the next key level to watch will be at 55. A move above the resistance at 64 will invalidate the bearish view.