- Summary:
- The disappointing PMI data from the US caused the USD/RUB to surrender gains made earlier in the session, succumbing to a 1.22% loss.
The USD/RUB ended the day lower after the pair surrendered gains made earlier in the session on the back of a drop in the ISM Manufacturing PMI number for July 2022. A drop in crude oil prices pressurized the Ruble earlier in the session, but generalized USD weakness took hold of the pair and allowed the bears on the pair to gain the upper hand as the New York session wound to a close.
The generalized weakness of the US Dollar appears to have capped any further gains on the asset, despite a drop in crude oil prices. Crude oil has fallen for three days straight, but this does not appear to have hurt the Ruble since Russia is already bearing the impact of reduced crude oil sales and, therefore, a reduced imprint on international crude oil prices.
Technically speaking, the daily chart shows that the price candles of Thursday, Friday, and Monday 1 August is that of an evening star pattern. Price action on Tuesday is expected to end on a bearish note if the pattern is anything to go by. A closing penetration of the 2 August candle below the 8 July low at 60.9581 and the 50% Fibonacci retracement at 60.2970 sets up a scenario for a further slide of the USD/RUB pair.
USD/RUB Forecast
The bearish engulfing 4-hour candles at the 62.7625 resistance pointed the way to the south, with the subsequent candles breaching the support formed by the 50% Fibonacci retracement level at 60.2970. This breakdown and rejection of the return move provide an opportunity for the bears to make the 58.5621 support level an initial harvest point. Subsequent targets to the south are found at 56.4633 and 55.5123. The 20 July 2022 low at 53.8600 forms an additional harvest point to the south.
On the flip side, the bulls will regain momentum on a break of the 64.4803 resistance (6/8 July highs). This move must transcend several resistance barriers at 60.9581 and 62.7625 (11 July high). The target in focus would then be the 67.9599 resistance, where the 27 May 2022 high is located.
USD/RUB: 4-hour Chart
