FX.co ★ 12.01.2021: RUB to break through 73 vs USD? (Brent, USD/RUB).

12.01.2021: RUB to break through 73 vs USD? (Brent, USD/RUB).

The bullish rally is still in place. Global oil prices have entered positive territory. The Russian currency is following this positive trend. The dollar/ruble pair bounced from the upper boundary of the current trading range. In the early session, market sentiment was moderately positive. The corrective phase, which has been observed over the past few days, may be soon coming to an end. Currently, the bullish trend prevails in the energy market, thus keeping the prices at higher levels. Brent futures contract with the nearest expiration gained more than 1% in the mid-session. As a result, Brent was last seen trading just above 56 US dollars a barrel. WTI crude displayed similar dynamics. Its February futures contract settled at 52 dollars 80 cents per barrel. Oil market remains largely bullish, and prices are holding at comfortable levels. Oil quotes are staying near the lower boundary of the pre-pandemic price channel. This mainly happens thanks to the OPEC policy and the decision of Saudi Arabia to cut its production in February and March. In this way, the Saudis showed that no extra effort is needed to help lift oil prices. However, in the short-term this decision may lose its relevance. Meanwhile, US oil producers may well benefit from the oil’s rally. Usually, US oil companies start to ramp up shale oil production as soon as WTI moves above 50 dollars per barrel. Traders are now trying to figure out whether this scenario will take place this time. So, in the coming days they will be focused on the industry data. The signals of a possible rise in supply from the US may weigh on the crude prices. Besides, the strengthening of the US dollar serves as another limiting factor. During the New York session on Monday, the ruble managed to win back some of its losses against the dollar. This happened amid a slight increase in oil prices and a drop in the US dollar index. Today, the ruble continues to regain ground against other major currencies, supported by a stable energy market and a slight rise in emerging market currencies. As a result, the dollar/ruble has moved to the middle of the trading channel of 73.00–75.00. The ruble is likely to hold its gains if the commodity market and the overall background remain positive. In this case, the ruble will most probably stay near the current levels in the coming sessions. If the risk sentiment improves, the Russian currency may trade near the lower boundary of the mentioned range. So, it may again test the mark of 73 against the US dollar.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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