2023-10-17 05:48:45
Main
• The ruble has been consolidating at 97 per US dollar for several days now. A sideways trend is a common thing after a surge in volatility, but another surge is ahead. In the medium term, the ruble is more likely to strengthen than to fall again to annual lows.
• On the global foreign exchange market, the dollar rolled back, and the currencies of Europe and Asia slowed their decline. A lot depends on the situation in the Middle East, since the dollar has built-in protection against uncertainty, but the Fed factor cannot be discounted.
• Brent oil futures are very volatile, with a quick surge above $91 followed by a pullback towards $89. Gold, after a sharp rise above $1930, is falling towards $1910, and a strong correction in NG gas futures provides interesting opportunities.
In detail
Global US dollar fell by half a percent, and the US dollar index DXY: 106.3 p. was unable to return to the boundaries of the medium-term ascending trading channel. Without strong bitterness on the geopolitical front, the dollar risks falling further, especially since the idea of stopping the Fed’s tight monetary policy plays against it. These are promising factors for the stabilization and recovery of European and Asian currencies, and the currencies of developing economies may then perk up.
On the commodity market Brent oil futures lost over 2% after rising by 6% overnight. The Iranian factor is in focus, but the risk of the country being drawn into the Israeli conflict has not yet materialized, which means the risk premium in the contract has decreased slightly. However, the uncertainty is very high, and at any moment another shake-up and movement of the barrel to the highs of the year may occur. Gold has dropped by a percentage point from its high, but this is a little after +5% over the last six sessions – the medium-term negative sentiment is expectedly broken, the ounce is already looking towards $2000. And NG gas is on correction approaching around $3/Mmbtu, this is an interesting area for selection with a target of $3.7 by the end of the year. The main thing is not to forget about your feet.
Stock market The US bought back, and stock indices returned to the values before Friday’s sales – this is a positive signal with the same outlook. In Asia, the rebound from yesterday’s sell-off is an additional factor for a positive opening in European equity markets. And the Moscow Exchange ruble index, despite the risks of currency correction, is already reaching the upper limit of the consolidation range.
Russian ruble finished yesterday’s session neutral. This is not the first day of consolidation after a sharp fall in currency pairs last Thursday amid the signing of a decree on the return of foreign currency earnings by exporters and the sale of foreign currency on the domestic market.
It is interesting that the currency pairs do not go further than the lows of October 12, but a technical rebound is not visible either. On the one hand, the area of 97 per dollar allegedly suits buyers and sellers of currency, and the launch of new standards yesterday did not lead to increased sales of currency. On the other hand, there are clearly not enough factors to reach the large upper gap left in USD/RUB at 100.2.
In any case, this dynamic will not continue forever. One of the parties to the exchange process must take active action, which will increase volatility.
Taking into account the high cost of oil, the minimum spread of the Russian mixture with standards over the past year, the export standard under the control of representatives of Rosfinmonitoring, the sharp narrowing of the budget deficit and the strict cycle of the Central Bank on the key rate, the option of exiting the consolidation downwards in currencies remains basic, even through a possible fraudulent maneuver. And even the most insignificant news can be the impetus for breaking the sidewall.
From a technical point of view, the USD/RUB pair has a resistance area of 98.6-98.8, and this can be considered as an interesting point for playing on the weakening of the dollar, and a move above the zone will be considered a risk limit for activating protective stop orders. There are currently no expectations for an early closing of the left upper gap at 100.2 per dollar, but below there are peak lows at 92.5. Knowing the volatile nature of the ruble, such levels can be reached within a few weeks. After which it will not be far from the fundamentally justified 90.
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