What Does The Market Foretell About The Russian Ruble Standoff?

The Russian Ruble is an interesting case study because of the ongoing war in Ukraine and the sanctions against Russia. However, Ichimoku Cloud analysis shows the price movement has been predictable.

President Vladimir Putin has said starting this week that Western nations must now buy Russian goods in Rubles. Europeans have a reliance to a significant degree on Russian oil and gas. The G7 has said they won’t pay in Rubles. The Russians have said, “Yes, you will.”  

This disagreement is important as far as the Ruble is concerned. If the European nations end up paying for Russian goods in Rubles, they will first have to go into the market and buy Rubles in order to pay. 

Let’s take a look and see what the Ichimoku Cloud has to say about the G7 – Russian Ruble standoff. 

We’ll look at three charts with 3 different time frames, the long-term weekly chart, the medium-term daily chart, and the short-term 60-minute chart. Each chart shows the Ichimoku Cloud, which you’re familiar with, but you’ll also see wave counts and targets. Waves and price targets are part of the Ichimoku Cloud system, even though most people aren’t aware the Ichimoku Cloud has these features built into it. 

Russian Ruble Weekly Ichimoku Cloud Chart

(Click on image to enlarge)

The weekly chart had a big congestion zone. The market traded between the one and the two waves and went flat. The Ichimoku Cloud acts as an equilibrium spot. The market wants to go to this middle price. When we see a big move away from the Cloud, price wants to snap back. The Cloud moves towards price as well.  

You’ll note the Ruble, before the invasion started, started drifting down inside the range. Once countries noticed Russian troops amassing, and then once the invasion happened, the Ruble fell completely to the bottom of the target support zone.  

Price broke through the bottom of the target zone slightly but then bounced up. The Ruble is now finding resistance at the Ichimoku Base Line. There are two moving averages in the cloud system, the slower and the stronger is the red (Base Line) and that’s where the price is now. This point will also act as an additional resistance point due to it being supported when the Ruble was headed down. The beginning of the support zone now acts as resistance. Price is trying to clear that area on the weekly chart. It hasn’t yet. We’ll see over the next few weeks if the Ruble is able to break above.  

If the Ruble clears the current resistance area, it’s almost certainly is going to move up to test the Ichimoku Cloud above it and likely go through it. 

Russian Ruble Daily Ichimoku Cloud Chart

(Click on image to enlarge)

The daily chart shows a clear downtrend. The downtrend started in October and the Ruble has been struggling since. At the Wave 6 high, the price was rejected by the Ichimoku Cloud and bounced strongly down. Since the Wave 7 low on March 7th, the price has moved back up again. The price is above the Base Line. The momentum has shifted up as the Conversion line has moved over the Base Line. This momentum shift is a bullish sign but the price is sitting at a resistance point. Price has breakthrough resistance points on both the weekly and the daily charts. The daily resistance is a .618 Fibonacci retracement between the zero and the seven waves.  

Should the Ruble break through this resistance area over the next few days, it’s going to be a very bullish sign. Price may then move up to the .786 Fibonacci level, which places the market just in front of the five-wave and an old Span A. These areas will also act as resistance.

The Ruble does have a very thin sinking cloud, which price is going to encounter. Thin Ichimoku Clouds, do not act as overly strong resistance. However, the Ruble could remain flat until the price passes through its daily cloud, and then the price may head up. That process would be the most likely scenario. The market looks like it could head up to the .786.  

On the other hand, the Ichimoku Cloud could hold the Ruble back and the price may sink in a fairly steep retracement back to the old targets.  The Ruble would have to trade down and break through the two moving averages, so it is less likely. 

Russian Ruble 60-Minute Ichimoku Cloud Chart

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Price on the 60-minute chart has been leading the way up with a strong uptrend. Price and the Lagging Line, the blue line lagging behind price, are both above the Ichimoku Cloud on the 60-minute chart. The uptrend wave count started back on March 7th and had a recent big 5 wave. Price is at a typical 1.618 target which will act as a resistance zone. It's likely the Ruble will retrace down and flatten for a while on the 60-minute chart. A horizontal move will let the Ichimoku Cloud catch up to the price. Remember, price does not like being away from the Cloud for too long.  

The overall takeaway is the Ruble is facing strong upside resistance and is overbought. Price is going to flatten with no immediate big move coming. However, the Ruble is approaching a point where it will make a decision. The market is at an inflection point. It will be interesting to watch. Does the G7 holds its ground and the Ruble head back down again or are the Russian's Ruble payment demands met and the Ruble rises.