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USD/RUB On Track To Hit 12-Month Highs

USD/RUB exchange rate has been soaring since the start of 2023. During this time, the Russian ruble has lost 12% of its value in terms of US dollars. Considering the June 2022 lows, this translates into a 57% devaluation within the past nine months. Our analysis shows that the dollar is likely to keep outperforming the ruble in the coming weeks.

On Friday, USD to Ruble turned red for the first time this week. The pair remained volatile during today’s trading session as the price retraced to 80.55 after tagging the fresh 11-month high of 82.65. The next major resistance lies at the 85.6 level.

Why Is the Russian Ruble Weakening?

Since the start of the Ukraine crisis, the Russian Ruble has been in a tailspin. The sanctions by the West have quite adversely affected the Russian economy, which was already struggling. Consequently, the USD/RUB exchange rate has surged massively. Ruble has also weakened against the other major global currencies like British Pound and Euro.

Despite a fall in the dollar strength (DXY) index, the ruble has kept tumbling, which shows that there are more factors at play. Apart from the sanctions, the decreasing prices of Russia’s major exports, like Natural Gas, are the biggest contributors to the slump. Furthermore, the country’s budget deficit is also playing a key role in the devaluation of its currency.

USD/RUB Can Hit 85 Soon

The following chart shows the key levels of support and resistance on the USD to Ruble chart. The pair has been trading above the trendline since November 2022. This trendline is acting as a support as the price has bounced off repeatedly from this line. The next major resistance lies at 85.6, which is also the April 2022 high.

Our USD/RUB forecast will remain bullish and in favor of the dollar as long as the pair keeps trading above the trendline. As soon as it breaks below the trendline, I expect a major correction. However, due to the recent bounce in DXY, it is unlikely to happen in the next few days.

USD/RUB chart
USD to Ruble chart