USD/RUB took a nosedive on Thursday as Iran and Russia agreed to trade in their local currencies. Consequently, the Russian ruble surged 2.72%, its biggest daily gain against the greenback in almost four months.
The US dollar to Russian ruble exchange rate also hit fresh monthly lows on Thursday. This bearish move is very critical as it also signifies a rejection from a key technical level, which I talked about in my previous forecast of the forex pair.
The dollar strength (DXY) Index was up 0.10% today after hitting fresh 5-month lows. This was due to the downtrend in the EUR/USD and GBP/USD pairs, which were down 0.31% and 0.46%, respectively, till press time.
The weakness in the greenback is due to the expectations of early rate cuts. As the Fed tightening cycle nears its end, analysts are expecting as much as 6 rate cuts in 2024. If this happens, the USD/RUB might continue its downtrend in the coming months.
However, Russia’s economic conditions are not great either. Therefore, for a better understanding of the price action, let’s perform a technical analysis on the USDRUB chart.
You can see that the forex pair is currently retesting its 200 MA on the daily chart. There is a chance of a bounce from this level as this key moving average often acts as a dynamic support for pairs. However, in case of a breakdown, the USD/RUB forecast will flip even more bearish for the coming weeks.
For a better outlook, the exchange pair needs to break above 91.45 resistance level from which it has faced a recent rejection.
