USD/RUB forecast: Russian ruble falls despite Urals oil price surge
The Russian ruble continued its recent downtrend against the US dollar, even as the country became a major beneficiary to the ongoing Iran war. The USD/RUB exchange rate rose to 80.33, its highest level since January 9, and 7.15% from its lowest level this year.
Russia is receiving a windfall as the Iran war continues
The USD/RUB has remained in an uptrend in the past few weeks, moving from a low of 75.05 in February to 80.33 today. This rebound is happening as the Russian economy continues to benefit from the ongoing Iran war that entered its third week today.
The United States has removed some sanctions on Russian oil, allowing some of its buyers like India to restart their purchases. As a result, Russian oil, commonly known as Urals, has surged to $95 from the year-to-date low of $50.
This oil price surge is expected to make Russia an estimated $150 million a day, a figure that may keep rising as the war continues. Iran has said that its goal is to have oil prices jump to $200, double where they are today.
Officials in the country say that surging oil prices will act as an insurance policy against future attacks. They also hope that these prices will help it get a better deal when talks restart.
Russia is also benefiting from the ongoing natural gas price surge. Data shows that gas has soared this year amid elevated demand and after Qatar slashed production after its plants came under increased drone attacks.
Additionally, Russia is also a key beneficiary in the food industry, where fertilizer prices have jumped this year. That’s because a big share of the world’s fertilizer comes from the Middle East and uses the Strait of Hormuz.
Therefore, these numbers mean that Russia’s economy will resume its growth this year. The most recent data showed that the economy contracted by 2.1% in January as energy prices retreated and sanctions hit.
On the positive side, Russia’s inflation has moved downwards in February, moving to 5.9% in February from 6% in the previous month. This increase was partly because of the recent VAT and excise tax increases.
The Russian Central Bank has been cutting interest rates in the past few months. It slashed rates by 50 basis points to 15.5%, contrasting with the expectation that it would hold. It has now slashed rates from last year’s high of 21%.
Therefore, the USD/RUB pair is doing well because of the strong US dollar. The dollar index has jumped from the year-to-date low of $96 to $100 because of its role as a safe-haven asset.
USD/RUB forecast: technical analysis
USDRUB price chart | Source: TradingView
The daily chart shows that the USD/RUB pair has been in a strong uptrend in the past few days. This rebound happened after it formed a double-bottom pattern at 75 and a neckline at 81.9, its highest point in December last year.
The pair has already flipped the Supertrend indicator from red to green. It has also jumped above the 50-day moving average, while the Relative Strength Index (RSI) and the Stochastic Oscillator have moved to their overbought levels.
Therefore, the pair will likely continue rising as bulls target the neckline at 81.97. A move above that level will point to more gains to the key resistance level at 85.87, its highest point in September last year.
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