The Russian Central Bank kept the interest rates unchanged at 4.25% in the decision announced earlier today. Consequently, the USDRUB continued its slide, which has extended into the 6th consecutive day.
The USDRUB pair has been in a downward corrective mode, boosted by slight strength in crude oil prices as well as UDS weakness. Today’s decision by the Russian Central Bank has sent the USDRUB toward’s one-month lows.
The decision to leave interest rates at 4.25% met the expectations of analysts that had been polled by Reuters, who felt that the benchmark rates would be left unchanged, but that the door would be left open for a possible rate cut down the road.
The Ruble’s rise against the USD continues to face headwinds from geopolitical risks, as Russia is an interested party in the ongoing Armenia-Azerbaijan conflict over the disputed Nagorno-Karabakh region. Russia is sympathetic to the Armenian claim to the territory, despite the international recognition of ownership of the area by Azerbaijan.
The USDRUB pair will also face a test from the outcome of the US Presidential Election. Joe Biden is seen as a hardliner when it comes to Russia, while incumbent President Donald Trump is a much-favoured candidate among the Kremlin.
The USDRUB is down 2.00% for the week as at the time of writing.
Technical Outlook for USDRUB
A look at the daily chart for the USDRUB shows that price is in a corrective phase from the uptrend move that resulted from the break of the falling wedge pattern. Price is now testing the support at 76.511. A successful breakdown of this area extends the decline of the pair to 76.400. 75.487 and 74.520 are potential downside targets for the future.
On the flip side, a bounce from the 76.511 support targets 78.195, with 79.931 also in line as a potential upside target. All eyes are now on the outcome of the US Presidential Election as a potential fundamental trigger for the USDRUB pair.