USD/RUB opened with a positive gap this week, and marched higher during the Asian morning Monday. That said, it hit resistance at 67.65 and then it pulled back. The retreat was stopped by the 66.05 level, from which some bulls reentered the game. Overall, the rate continues to trade above the uptrend line drawn from the low of January 13th, and thus, we would consider the short-term picture to be positive.
If the bulls are strong enough to stay in charge and drive the battle above 6765, we could then see them aiming for the 6845 area, defined as a resistance by the high of January 4th, last year. If they are not willing to abandon the battlefield near that zone either, a break higher may carry larger upside extensions, perhaps paving the way towards the highs of December 31st, 2018, and January 2nd, 2019, at around 6980.
Looking at our daily oscillators, we see that the RSI lies above its 70 line, but has turned flat recently, while the MACD runs above both its zero and trigger lines, pointing north. Both indicators detect strong upside momentum, but the fact that the RSI turned flat make us cautious over a possible setback before the next leg north, especially given that the rate has distanced itself from the aforementioned upside line. This is another reason we would get confident on more advances after a break above 67.65.
On the downside, a dip below 65.57 and the upside line may signal that the bulls’ weapons have been stolen by the bears, and may initially allow declines towards the 64.50 zone, marked by the inside swing highs of November 13th and December 2nd. Another dip, below 64.50, may encourage the bears to sail further south, perhaps towards the low of February 19th, at around 63.45.