Russian Finance Minister Anton Siluanov said earlier that his Sovereign Fund (SVF) would come out of the US dollar. The reallocation will be almost 40% in euros, 30% in yuan, 10% in gold and the remaining 10% will be distributed. Since this is Russia, that raises a few questions: have they already done the reallocation? According to Wikipedia, the SWF was worth $ 176.64 billion as of August 2020. But that’s just the estimate. How much is actually held in US dollars? Are the Russians telling the truth? Why now? Is Russia trying to send a message before the next meeting between Biden and Putin? Biden plans to discuss recent ransomware attacks against the US company Colonial Pipeline and the US entity of Brazilian JBS. Both attacks are believed to come from groups inside Russia. The two meet on June 16e.

Whatever the reason, the 15-minute USD / RUB chart shows traders are eagerly taking comments. On the announcement, the USD / RUB fell from 73.22 to 73.02, but recovered quickly as the DXY made a strong bid. However, the S&P 500 fell from 4,198.25 to 4,175.75. It has since recouped some of the losses when the ADP employment data was released.

Source: Tradingview, FOREX.com

USD / RUB has been in a symmetrical triangle since March 2020. After a brief break below the low, an ascending trendline in mid-March near 72.54, the price formed a pattern of star candlestick formation. AM and traded inside the triangle at 61.8%. Fibonacci retracement of highs from November 2020 to March 16e low, just above 77.74. The USD / RUB formed a head and shoulders pattern near these levels and broke below the neck line at 75.26 in late April. After failing a new test above the neckline, the price fell aggressively and knocked out the 200-day moving average and lower trendline from the ascending trendline of the near symmetrical triangle. of 74.72. We are approaching March 16e lowest support at 72.54. The target for the head and shoulders pattern is the distance between the head and the neckline added to the break point, which is close to 71.40. Below that, the price may drop all the way to July 2020 lows, near 70.55. The first horizontal resistance is at 74.71, ahead of the 200 day moving average at 74.72, then the lower triangle trendline near 75.20.

Source: Tradingview, FOREX.com

Although Russia announced today that it is transferring US dollar funds into its SWF, the comments should be taken with a grain of salt. Traders should determine if these comments are important or if they are just applying ahead of the Biden-Putin meeting on June 16.e.



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Al Worden

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