USD/RUB sellers attack 58.00 amid Russian supply cut fears, softer USD

• USD/RUB remains pressured around intraday low, reverses the week-start rebound.
• EU’s Energy Chief Simson highlights the need to be ready for supply cuts from Russia at any moment.
• US dollar prints four-day downtrend as traders brace for FOMC.
• US Consumer Confidence, recession talks can direct intraday moves.

USD/RUB reverses the week-start gains around 57.80, down 1.15% intraday heading into Tuesday’s European session. In doing so, the Russia ruble (RUB) pair cheers the downbeat US dollar, as well as firmer oil prices of late.

That said, the US Dollar Index (DXY) prints a four-day downtrend, paring intraday losses around 106.40 by the press time. It’s worth noting that a rebound in the US 10-year Treasury yields, down 2.8 basis points near 2.79%, appears to favor the US dollar in consolidating the recent losses.

Behind the US dollar’s recent weakness could be the recently downbeat US PMIs and the second-tier activity data, as well as fears of the US recession. Recently, the global rating giant Moody’s downgraded growth forecasts for Eurozone and the US. Additionally, the greenback traders’ preparations for Wednesday’s Federal Open Market Committee (FOMC) meeting also keep the DXY pressured.

On the other hand, prices of Russia’s key export item crude oil rose for the second consecutive day, up 2.0% daily while refreshing intraday high around $97.80 by the press time, also weighing on the USD/RUB prices.

The oil prices seem to cheer talks that Russia could cut the Eurozone gas supplies anytime. Recently, European Union (EU) Energy Policy Chief Kadri Simson said, per Reuters, “Expect to have a deal on EU regulation to curb gas demand.” On Monday, Russia’s Gazprom announced that it will slow flows on its Nord Stream 1 pipeline. The company will halt another turbine in the pipeline to Germany, which will reduce the flow to just 20% of capacity (currently at 40%) from July 27.

It should be noted, however, that the risk-off mood challenges the USD/RUB bears ahead of the US CB Consumer Confidence for July, prior 98.7. Additionally important will be the chatters surrounding the global recession and EU energy crisis.

Technical analysis

USD/RUB bulls need successful trading above 68.75 to retake controls. Otherwise, a gradual downside towards the yearly low marked in June, around 50.55, can’t be ruled out.