The USDRUB spiked after long-time Russian PM Dmitry Medvedev and the entire cabinet resigned Wednesday afternoon. However, he was immediately reappointed by President Vladimir Putin as Deputy Head of the Security Council.
Medvedev’s resignation followed an announcement from Putin on changing the constitution to limit the powers of his successor after his term expires in 2024. Medvedev had succeeded Putin as President between 2008 and 2012, with Putin swapping places to serve as Prime Minister. With Russia’s constitution prohibiting a sitting president from serving more than 2 terms at a go, there are speculations that the constitutional amendment are to weaken a Presidential successor while widening the powers of the prime minister; a role Putin could assume on stepping down in 2024.
The USDRUB spiked to 61.6848 but has shed off some weight to trade at 61.552 as at the time of writing. The spike coincided with a bounce off a long-term support level seen last in April 2018. With this bounce, the USDRUB is now targeting 62.640, which is the former double bottom at June 24 and 16 July 2019. However, it has to overcome the 61.657 resistance formed by the 8 June, 11 July 2018 and 24 December 2019 lows. Further resistance levels are seen at 63.323 and 63.793. Supporting this outlook is the bullish divergence which seems to be forming on the chart.
On the flip side, it must be noted that the existing trend on the USDRUB is a downtrend. Therefore, the upside targets mentioned above may just serve as rally points to initiate new selling to follow the existing downtrend. Traders following this outlook may therefore set their sights on downside targets at 60.632.
Further developments on the Russian political scene as well as in the crude oil market could be the key determinants of price action on the USDRUB in the short-term.