USD To RUB And EUR To RUB Charts With Some Green Candles

USD To RUB And EUR To RUB Charts With Some Green Candles

The ruble remains under pressure on Monday after four weeks of decline. The USDRUB is above 77.7 and approaching the area of last year's highs.

Technically, the situation looks like a moment of truth for the ruble. An easing of geopolitical tensions has the potential to turn it around on the way to 78, as it did several times last year. And we can see that Russian politicians the previous week were ready for more constructive negotiations and compromises.

Moment of truth for Russian Ruble - 1

However, it has not yet come to de-escalation, and pressure on the rouble persists. Reports that the US and the UK are set to expel diplomats from Kyiv have created a new local momentum of pressure on the ruble.

Fixing the dollar above 78 rubles today could be the starting point for a jump of USD/RUB to 80 and EUR/RUB to 90 this week.

At the same time, we believe that the overheating is close to the peak. Further chances for stabilising the situation at the current level or even compromising are higher than stricter rhetoric. In this case, the ruble would have the opportunity for another turn down from 78-80 for the dollar and 88-90 for the euro.

Moment of truth for Russian Ruble - 2

In a partial geopolitical agreement, the Russian currency would remain tied to global risk demand, which is contracting in January. Therefore, even with a favourable geopolitical scenario, one should not expect the rouble to quickly return to levels of the start of the year.

Alex Kuptsikevich

Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.