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Usdrub_long

The technical analysis: USDRUBThe mid-term technical analysis of the USDRUB pair looks very explicit: a confident uptrend. Perhaps the only thing that stands in the way of the pair is resistance 69-70, overcoming of which opens the way for the pair to growth at least 75 (the area of consolidation of the panic time of the beginning of 2016), but in general the most logical synopsis is to re-test historical highs in area 82. But back to the rationale for the uptrend and its dominance in the price dynamics of the USDRUB pair. Certain consolidation was observed in 2016 - at the beginning of 2018, but after spring 2018, when the fast average crossed the slow bottom-up, we can talk about a new phase of the upward movement cycle. From then until now, the fast and slow average look up and stay away from each other what is clearly indicate the dominance of buyers in the market. Trend indicators, which ADX and MACD can be classified, are also pretty straightforward in its statements. MACD is above zero, and the ADX line is growing, and the DM + line is above the DM- line, and these lines diverge, indicating that the trend is developing dynamically and is still far from exhaustion. Regarding the fundamental analysis, the decline in oil prices by 35% has so far been ignored by the ruble. That is, a fundamental divergence has emerged, which, in any case, must be worked out, given the total dependence of the Russian economy on hydrocarbon prices. Don’t also forget about political risks and internal instability in Russia. The number of dissatisfied with power is growing. The fridge beats TV. Recent social polls in this regard are extremely unpleasant for the current government. We can recall the dismissal of the head of Rosstat and massive frauds with statistics in the country. That is, even those figures that are in essence drawn now and the authority has recognized this, dismissing the head of Rosstat. Do not forget about the setbacks of auctions for the placement of OFZs. Regarding the budget surplus, it has a purely "steroid" character - the result of high oil prices in 2018 instead of the development of the economy as a whole. Overall, everything points in favor of the mid-term growth of the USDRUB pair. The last barrier to this growth is resistance 69-70. It capture will open the way for the pair to grow to area 75-82. In this case, we note that this is not the limit of increase.
Long
by Trade24Fx
News background and trading ideas on 18.09.2018In terms of macroeconomic statistics, today promises to be exceptionally calm. However, he will hardly be calm. The markets will continue to watch with tense the US trade wars against China and the world. And it's not even about $ 200 billion in additional goods that will be subject to tariff increases by the US (according to the latest information, Trump approved them, and they will be introduced next week). The problem is in the trend - the appetite comes with food and in its quest to "make America great again" Trump can go further, much further. Here is one of his last quotes about this: "The tariffs put the US in a very strong negotiating position, billions of dollars, and jobs flowing into our country - and at the same time, the growth of costs is almost imperceptible. If other countries do not enter fair deals with us, they will be charged with tariffs. " The actual drop in the stock market of China to the minimum for the last 4 years marks a clear confirmation that the process is on and does not stop to stop. Recall that the aggravation of trade wars causes the depreciation of the currencies of developing countries, which provokes the growth of the dollar in the foreign exchange market. So, while events develop as they develop, dollar purchases seem to us the most acceptable basic trading strategy in the foreign exchange market. But not against all currencies. Recall, we recommend buying Canadian dollar and pound. In this light, it is worth paying attention to the Australian dollar, which also suffers from trade wars. But literally today, the Reserve Bank of Australia said that the most likely next move by the Central Bank is an increase in the rate. So, the Australian dollar starts to accumulate potential for growth. The current week promises to be if not decisive, then very important. On Thursday, the results of negotiations on NAFTA should be announced. So, we are preparing for a surge in volatility in the Canadian dollar. The week will be very important, well, or at least interesting for the pound. The fact is that this week is the European summit - the first of three key meetings. On Wednesday, Teresa May travels to Salzburg, so news from the Braxit fields will be guaranteed, and there will also be volatilities in pounds pairs. We continue to follow developments. Total, our basic trading ideas remain relevant: 1. To buy the British pound is the basis - our conviction that the Brexit deal will still be concluded, and the current pound prices consider the option without a deal. That is, the pound is highly undervalued (in case of an agreement). In addition, in the last couple of weeks, the statistics on the UK economy have been very encouraging: the topic of GDP growth is higher than expected, unemployment is at the lowest level for the past 40-plus years, and the Bank of England is behaving quite aggressively, at least in words (recall at the end of the last meeting Bank of England, it was stated that the withdrawal without a deal would be the reason for the Central Bank to raise the rate again). Total - looking for points for purchases, medium-term goals extend to 1.41-1.43. 2. Sell the USDCAD pair - the reason is again our conviction that a deal on NAFTA will be concluded. And current prices reflect rather fears of non-inclusion of the transaction. That is, the Canadian dollar looks undervalued relative to the US dollar. You can sell both around 1.3050, and higher, for example, 1.3150 (if the pair is substituted). The minimum target is 1.2880, but it is possible for the pair to deeper to 1.2680 and even lower. 3. To sell the Russian ruble - the Central Bank's rate hike of 25 basis points on Friday is a formally positive signal for the ruble. But we view this event solely as an opportunity to sell the ruble more expensively. The Central Bank of the Russian Federation behaves quite inconsistently, which means that there is no strategy for action. Situational reactions of the Central Bank are just an attempt to extinguish a fire. But the "building" is already embraced by the flames. So we buy a pair USDRUB from the current. The minimum targets in the region are 70-71. But it is better to take a medium-term position, then everything can be much more interesting in terms of profitability. We will continue to monitor what is happening in the financial markets and keep you informed.
Long
by Trade24Fx
Russian ruble: causes of the fall and prospectsOver the past few days, the Russian ruble has lost about 10%. In a natural way, this attracted considerable interest to it. So, we need to talk about the current and medium-term prospects of the ruble. The current decline in the Russian currency is the result of a few factors. Both internal and external ones. Let's list the key theses and give some explanations on them. External causes of the ruble fall. 1. The news about a new sanction package from the USA. This is a US-announced package of sanctions affecting Russia's sovereign debt and state-owned banks. The package has not yet been formally adopted, nevertheless this factor provoked the emergence of a panic wave in the foreign exchange market. But this is not the only external problem of Russia, the Russian economy and the ruble. 2. Trump Trading Wars and devaluation as a way of self-defense. Trump unleashed a global trade war in the US against the rest of the world format. The main weapon of Trump is protectionist tariff barriers. Significantly increasing import tariffs, the US makes its domestic producers more competitive. As a protection tool, the affected countries use the devaluation of the national currency. Chinese yuan, Indian rupee, Turkish lira and other currencies of emerging countries have lost 10% and more recently. Even developed countries such as the EU, Canada, Australia have significantly weakened their currencies. 3. Oil seems to have peaked. The actual abandonment of OPEC + and the start of a new race to increase oil production puts an end to the hopes for oil prices growth in the future. Given that even with the current maximum values of oil quotations over the last couple of years, Russia's budget is literally bursting at the seams, it's even frightening to imagine what will happen to it if prices of "black" gold drop to the area of $30-40 per barrel (more than even in the foreseeable future). 4. Political isolation of Russia Politics is a concentrated expression of the economy. Russia's actions in Ukraine, Syria, interference in the elections in the United States, the case of the Scrypal in the UK, etc., shape Russia around the image of a rogue country, which has a negative impact on the country's economy. Internal causes of the fall of the ruble 1. Unpopular reforms as an indicator of problems in the economy. This is primarily about the budget deficit. To combat it, a few rather painful reforms are proposed, ranging from raising the retirement age to the growth of VAT. Most painful was precisely the issue of raising the retirement age, since the Russian authorities inherently sacred the term "stability", elevating it to the Absolute. And now they refuse it, and in the worst part. Obviously, it is vital to go for such unpopular measures, that is, all other options for solving the problem have already been exhausted. In addition, these reforms are clearly not the last in the list. Incoming the increasing of the tax burden on companies and others. All these in aggregate worsen the already weak investment climate in the country. 2. Inadequate structure of the economy. Russia is often called a gas-station country, hinting at its total dependence on hydrocarbon exports. Strategically, such a structure looks very vulnerable, especially against the backdrop of a shale oil and gas sector and alternative energy technologies (already now, the increase in energy capacity in the US is not due to the increase in hydrocarbon consumption, but from alternative energy sources). That is, the current structure of the Russian economy is, at best, the last century, while to remain competitive, the economy must compete in the high-tech sphere, which is not in sight. That is, in the long term, the gap between the developed countries and Russia will increase. And the resource rent, due to which the economy is now living, is a dead-end path of development. If we add to this the growth of the state's share in the economy (the last signal is the purchase of the retail giant Magnit by the state-owned VTB), the vector of development or, more correctly, the degradation of the Russian economy becomes evident. 3. Inefficient infrastructure projects. To stimulate economic activity, government funds are very actively invested in various mega-infrastructure projects such as the Olympic Games in Sochi, the World Football Cup, the construction of the Crimean Bridge, etc. The medium- and long-term economic effect of such projects is extremely doubtful, but the expenses are simply gigantic, especially for a country that is in acute shortage of financial resources. Well, talking about the launch of a new mega-project of building a bridge to Sakhalin with a value of 500 billion rubles only confirms our previous conclusions. 4. Problematic banking and other sectors of Russia The process of "cleaning" (if mass bankruptcy of banks in Russia can be called so) of the banking system continues. All this happens against the backdrop of the growth of bad debts in the credit portfolio of banks. In this light, it is also worth noting the wave of bankruptcies among touristic companies, mass cuts in several industrial enterprises-giants in Russia etc. So, here and now the ruble looks vulnerable because of the panic wave associated with the news of sanctions. In the medium term, the weak Russian economy and unpopular reforms that reduce economic activity, as well as the potential decline in oil prices, will put pressure on the ruble. In the long term, an inefficient corrupted economy coupled with a dubious vector of its development creates the prerequisites for further lagging behind the Russian economy from developed countries, which will also have a negative impact on the ruble. Total, on all time horizons analyzed, the ruble looks vulnerable, so any growth of it should be used for sales.
Long
by Trade24Fx