Yesterday, after receiving downbeat inflation data from the US, we could again witness the negative correlation between the US dollar and oil prices. Naturally, the accelerating inflation rate led to an overall weakness of the US dollar which is a bullish factor for oil. As long as the greenback is staying under pressure and the markets are still digesting the data on high inflation, crude prices may continue to edge higher. In the middle of the trading week, Brent oil futures met resistance at 73 dollars per barrel. Right after this, the price made a slight pullback and got stuck in the area between 71 and 73 dollars a barrel. According to analysts, the best strategy in this case will be trading on a breakout. If the signal for a breakout is confirmed on the 4-hour time frame, you can trade on current momentum. The same will be relevant for WTI crude. The North American benchmark is fluctuating in a narrow range, following the trajectory of the European Brent. Oil quotes are currently holding in the range between 69.20 and 70.60 dollars a barrel. This is where WTI is predicted to trade in the short term. Meanwhile, the dollar/ruble pair resumed a downward movement yesterday. As a result, the pair broke through the pivot point of 72 rubles per dollar. As we have mentioned earlier, the Russian ruble has been extending gains for quite a long time. Thus, it has gained more than 2.5% since the beginning of the month. Apparently, the ruble is overbought now. It is expected to meet the support area at the levels of 70.50 and 71.00. Then, the number of positions on the rule is likely to reduce and a pullback or a correction may soon follow. Against the euro, the ruble has advanced by 3% since early June which is another indication of its overbought conditions. Therefore, the chances of a technical correction for the euro/ruble pair are rather high. The area between 86.50 and 87.20 rubles per euro serves as a major trading range. As expected, rapid inflation growth in the US has led to further strengthening of the Russian currency. Yet, the rise of the ruble was moderate. What was the reason for this? Market participants are cautious ahead of the policy meeting of the Russian Central Bank. The regulator is expected to raise its interest rate to at least 5.5%. And this despite the fact that the economy has just begun to recover. We should also remember that the tightening of the monetary policy may slow down the recovery process and even lead to a new downturn. So, it is very likely that the ruble will start to decline right after the announcement by the Bank of Russia.
FX.co ★ 11.06.2021: What can stop oil’s rally? - (Brent, WTI, USD/RUB, EUR/RUB).
11.06.2021: What can stop oil’s rally? - (Brent, WTI, USD/RUB, EUR/RUB).
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade