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by Darius Anucauskas

USD/RUB Breaks The Neckline Of A Double Top

After failing to move above the 67.095 zone for the second time, USD/RUB drifted lower and formed a double top pattern, clearly visible on a daily chart. According to textbooks, such formations tend to signal further declines, especially if the so-called “neckline” is broken. Looking at the daily chart of USD/RUB, we can see that the “neckline”, which is at 65.442, was violated on Monday and a daily close below it happened yesterday. Today, the bulls attempted to push the rate above it, but the bears quickly took control again and sent the pair back below the above-mentioned 65.442 hurdle. For now, we will stay bearish and aim for lower areas.

A further push down could lead USD/RUB towards its next key support zone, at around 64.890, marked by the low of August 13th. This is where the initial hold-up might occur, as the rate would also test the 200-day EMA, which may provide additional support. If the pair rebounds from there, but struggles to move above the aforementioned “neckline”, we may see the bears stepping in again and driving the rate lower. Such a move could potentially bypass the 64.890 obstacle and target the 64.450 level, marked by the low of August 2nd.

Our oscillators, the RSI and the MACD, seem to be somewhat in support of the above-discussed scenario. The RSI, although it has flattened a bit, is now below 50. The MACD, after topping in the end of August, is now moving lower and aiming for the zero mark, while running below its trigger line.

Alternatively, if the rate climbs back above the 65.442 hurdle, this will put us into neutral spot. But if it continues to accelerate and breaks above the 66.138 barrier, marked by the high of September 6th, then we might see more buyers stepping in and lifting the pair higher. The next potential resistance obstacle to watch out for could be the 66.665 zone, a break of which may send USD/RUB towards the 67.095 level, marked near the highs of August 20th and September 3rd.

USDRUB daily

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