USD/RUB: Ruble buyers attack monthly top near 96.50 as Russia prefers ‘neutral’ Ukraine

• USD/RUB drops for the sixth consecutive day, pressured around 12-day low of late.
• Russia-Ukraine talks stumble upon ‘neutrality’ demand, Moscow hits theatre shelter.
• ICJ orders Russia to dump Ukraine invasion, Kyiv Leader Zelenskyy pushes allies for Moscow’s airspace ban.
• Fed’s rate-hike couldn’t recall bulls, second-tier US data and China’s covid updates will act as additional catalysts for fresh impulse.

USD/RUB remains on the back foot around the monthly low during the six-day losing streak, down 2.58% around 96.50 heading into Thursday’s European session.

The Russian ruble (RUB) pair’s latest losses could be linked to the US dollar’s broad weakness, as well as cautious optimism surrounding the Ukraine-Russia peace talks.

On Wednesday, global markets turned optimistic over a peace agreement between Moscow and Kyiv as both discussed a 15-point peace plan. However, Kyiv’s rejection of proposed neutrality and the International Court of Justice’s order to Russia to suspend the invasion of Ukraine challenged the risk-on mood afterward.

Recently, Ukrainian President Volodymyr Zelenskyy pushed allies for an airspace ban for Russian planes over Kyiv after they hit a theatre shelter.

Other than the geopolitical issues at home, receding covid fears from China and Beijing’s readiness for more action to propel the national growth also weigh on the US dollar’s safe-haven demand. In doing so, the greenback ignores the Fed’s 0.25% rate-hike and hints at six such moves in 2022.

Looking forward, the second-tier US data relating to housing, jobs and manufacturing will join headlines over the peace talks to direct short-term USD/RUB moves. Should the tensions ease further, the pair has more downside to witness.

Technical analysis

Multiple lows marked in the last 13 days around 96.30 become a tough nut to crack for the USD/RUB bears before directing them to the 90.00 threshold. Alternatively, the 200-SMA on the four-hour chart restricts the quote’s immediate upside near 109.50.