Currency Trading - Russian Ruble
I love sitting back and watching exotic currencies when they near a tipping point. By that, I mean that they could easily (and quickly) go either way, depending upon how investors perceive the global economy in the near-term.
So what’s going on? Russia’s Micex stock index has now dropped just over 20% from its 2009 highs, which technically puts it back into bear market territory.
If this trend continues, it could really scare investors back out of Russia…its stocks…and of course, its ruble! In fact, you can see this story already starting to play out on the chart below…
The Ruble Nears Another “Tipping Point”
If the scare continues on, then the USD/RUB pair will bounce back upward off of that green uptrend line as traders sell rubles and buy dollars.
On the other hand, if the pair traded down into the bottom circled area, below the uptrend line…then it means that investors are willing to stick it out and hold onto their rubles for the time being.
But honestly, I just don’t see that happening. The 22% drop since its June 1st peak has been swift. It’s scaring the pants off of many investors right now. That’s what makes this ruble story so interesting.
You see, formerly this Russian index of 30 companies roared upward 135% since last October and that caused the USD/RUB pair to dive. However, if this downdraft continues onward, then rubles will be sold, as investors flee Russia for greener pastures in other currencies abroad. The first stop out of Russia’s ruble will most certainly be the U.S. dollar.
Tags: bear market, currencies, Currency, investor, investors, traders, trend line, uptrendPosted in
