Ruble Staging Rally on Surprise Rate Cut Has Trend on Its Side

(Bloomberg) -- The ruble rallied after the Russian central bank cut its key rate, and technical patterns suggest the currency’s gains may find traction.

With trend and momentum studies such as the MACD looking bullish and far from oversold, charts point to an appreciation of the ruble beyond this year’s high toward levels not seen in two years.

The ruble-dollar chart shows a near-term top is in place near the 21-day moving average. So long as both the 21- and 55-day moving averages trend lower and cap the upside, ruble bulls will have an upper hand.

• Ruble faces resistance at 56.99, the high on March 21; 56.55, the high on Feb. 15; and 56.00, the low on June 30, 2015
• Both MACD lines are below zero line, which helps define the downtrend for the dollar; the negative histogram readings since March 20 show that the greenback’s bearish momentum is still in place