Ruble remains strong ahead of OPEC meeting

The Greenback was unable to hold onto the gains made against the Russian Ruble, following the victory of Trump in the US Presidential election. The main reason for this is the recovery in the price of crude oil. It ensured a fall in the USD/RUB pair to 64, from a high of 66 two weeks before. There are several more reasons to believe that the USD/RUB pair would decline further during the holiday season.

The analysts and oil market traders believe that the OPEC members would certainly finalize a production cut when they meet this week. The analysts anticipate a production cut of up to 1million barrels. If that happens, then the price of crude may begin trading between $55 and $60 per barrel.

It is estimated that a $1 rise in the price of crude oil would bring in additional revenue of $1billion to Iraq. Russia, which is pumping out oil at record levels, would certainly benefit from the price rise.

Al Jazeera English

The Central bank of Russia reported a trade surplus of $7.38 billion in September 2016, compared with market expectations of $6.9 billion. Similarly, the Federal State Statistics Service reported a decline in the jobless rate to 5.4% in October 2016. This is in line with the analysts’ expectations and 0.1% lower than the jobless rate reported in the similar period last year.

Finally, according to the analysts, the market has fully priced in the looming Fed rate hike. Thus, a rate hike will not have a huge impact on the US dollar. Furthermore, as January approaches, the market would start becoming nervous because the uptrend seen in the Greenback so far is purely based on the assumption that Trump would act on his promise. An increase in the volatility would certainly pave way for the US dollar to correct itself. So, a trader can expect the USD/RUB to remain on a bearish note in the weeks ahead.

The USD/RUB is declining after it failed to cross above the level of 65. The stochastic oscillator indicates an overbought scenario. So, we can expect the USD/RUB pair to descend soon.

A currency trader can go short in the USD/RUB pair near 64.80. To limit losses, a stop loss should be certainly placed above 65.50. If the currency pair declines as expected, then the profit can be taken at 63.

To gain from the probable decline of the USD/RUB pair, a one touch put option can be bought by a binary trader. The target level for the one touch trade should not be less than 63.50. Likewise, a three week time period would be sufficient for the expiry of the put option.

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