The USD/RUB exchange rate continued its bullish trend on Monday as the dollar strength momentum accelerated. The pair soared to a high of 101.57, a few points below the year-to-date high of 102.37. 

The Russian ruble has pulled back even as the resilience of the Russian economy continues. It has plunged by more than 95% from the highest point in 2022 and is now hovering at the highest point since March 2022.

The ruble has crashed because of the ongoing sanctions against Russia, the eighth-biggest economy in the world. These sanctions have made it relatively difficult for Russian companies to do business directly with Western customers.

However, the reality is that Russia’s economy has been quite resilient during this period. It has continued accessing Western goods through proxies. At the same time, the country is still exporting millions of oil barrels every day to India and China.

India has taken advantage of Russia’s situation to access cheap oil, which it refines and sells internationally. India’s refined petroleum exports jumped from 56.77 million metric tons in FY’21 to 62.75 tons in FY’22. 

Russia has also taken advantage of small and upcoming oil traders to avoid the price cap imposed by Western companies. As a result, the price of the Russian ural has jumped to over $70 in the past few weeks.

Russia’s economy is also doing well as the government boosts spending to fund its war efforts. As a result, its unemployment rate has crashed to a record low of 3%, down from the pandemic high of over 6.3%.

The main challenge for the Russian ruble is that the US dollar index (DXY) has surged in the past few months as the Federal Reserve has maintained a hawkish tone. The other challenge is the lack of US dollar in the economy and low ruble demand internationally.

USD/RUB chart by TradingView

The daily chart shows that the USD to RUB exchange rate has been in a strong bullish trend after bottoming at 50 in 2022. It has jumped above the 25-day and 50-day moving averages.

The pair has formed an ascending channel pattern and is nearing its upper side. It has also moved above the key resistance level at 99,10, the highest point on September 7th. The Relative Strength Index (RSI) has moved above the neutral point of 50.

Therefore, the outlook for the USD/RUB pair is bullish, with the initial resistance point being at 102.13, the highest level in August. More gains above this level will see it rise to the key point at 105.

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