USDRUB Extends Decline As Russia Central Bank Leaves Rates Unchanged; US Elections Eyed

Summary:

USDRUB extends decline into the 6th day after the Russian Central Bank opted to leave interest rates unchanged, with an eye on the US elections.

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.