USD/RUB

I think we'll get a reprieve soon. There will likely be a raise in interest rates on October 31st and forex repo auctions will likely be launched next week. Longer-term though, unless oil goes back up, Ruble weakness will likely continue.

I've been trading in and out, slightly overall increased holdings, last short at 41.95; avg price now 40.8880. Will totally cut this short on a test of 40.

My net position is at 40.33. I will look to add a leg to the net position if price strikes this week's high (42.007) at some point next week, but am looking to bail around 40 at this point if I get an opportunity to do so. I would like to get the net position value at or above this week's Ask Low of 40.782.

This week's Bid High 42.006
This week's Ask Low 40.782

I can always reload ... .

I agree that that a raise in interest rates is likely come 10/31 and that repo auctions may provide some intermittent strength to the currency. Looking at the RSI, the pair has been over 60 on the Daily since early September and on the weekly it is currently above 80. Ordinarily, I would consider the pair extremely overbought in light of this, and it is possible that some buyers may be get trapped by any strengthening effect the repo auctions and/or potential rate hike has on the Ruble, causing the pair to correct "substantially." If I were on the buy side, I would want to bail out of the pair immediately or have a tight stop in place, since I would not want to hold the pair longer than a day due to onerous swap.

That being said, I have no idea what kind of correction would be in order for, say, a .25 basis point increase in the interest rate, although some have mentioned .5 as a reasonably possible hike, http://www.bloomberg.com/news/2014-1...y-goldman.html, especially in light of how much money the RCB has burned through in an attempt to prop up the currency, how much international reserves it has left at this point, and the perceived notion that RCB action be "decisive" in nature.

On a positive note, Goldman Sachs and Aberdeen Asset Management see the Russian situation as presenting a bond buying opportunity, eyeing a potential 2015 rebound. http://www.bloomberg.com/news/2014-1...y-goldman.html

That being said, both Moody's recent cut of Russia's credit rating, coupled with its having barely dodged the same bullet from S&P, http://www.businessweek.com/news/201...-p-on-reserves, does not bode well for the Ruble, nor does the fact that the RCB spent $17 billion this month alone in a failed attempt to keep the USD-EUR/RUB basket value within an acceptable trading band, leaving it with $443.8 billion in reserves (down 13% from the beginning of the year), making GS' and Aberdeen's gamble for a 2015 turnaround for the Russian economy just that ... a gamble. These ratings suggest that Russian debt -- if not outright junk -- is nearly so.

For my part, I am cautiously in the Goldman-Sachs/Aberdeen camp. There will be an improvement (of sorts) and/or a stablilization in the strength of the Ruble/Russian economy going forward. It may not occur this month or next or even in the first quarter of next year, but -- given the enormously positive swap realized by shorting the pair, I anticipate holding my short position for a lengthy period of time if needed.

I anticipate that in next few months RUB can appreciate to 38 rub. range and stay there till the end of 2015 if the oil can stay in $80-$85 range.
Also, it looks like Russian central bank will rise the interest by 0.5-1% during its next meeting on Oct 31, thus many factors indicate that Rubble can appreciate during the next few months.

I'd like to go long on rubble and take advantage of positive swap, but my problem is that my broker (IB) offers only about 5% swap on this pair vs about 7.5% implied swap on futures markets. So i am thinking about buying futures instead of spot to capture the swap.
Anyone is using Futures to take advantages of SWAP on carry trade USD/RUB? Would u recommend futures for this pair?

42.5 ... I don't understand this pair ... ;( where we go ?!

I expect a significant pull back on /after Oct 31, when russian central bank can announce a rate hike as well as repo auctions start this week.

Enjoying the positive swap on the short side ... . The price, eh, not so much ... .

Moving my TP down to 39.00 ... . Not sure how much an effect the repo sales will have on price ... . I think it is more likely that an interest rate hike will move the pair more dramatically than the repos ... .

Again, though, I view getting in short here as a long term play -- several weeks to several months, since this particular trade is all about the swap, which you won't be able to take significant advantage of unless you take a position and hold it for a substantial period of time. I started accumulating shorts on 9/29, which is the longest I've held anything for a while. Right now, not a single leg is in the green and the net position's average value is now 40.361 -- quite a bit below current price. That being said, my leg sizes are somewhat miniature (.25 x equity per leg), so I'm not sweating it too much.

I will look to add another small short leg if a Zig forms on the 4H around 42.5. But we just keep making higher highs and higher lows for now ... .

Patience. Patience. Patience.

Added a little mid 42's. Average price 41.21 now. Excited to see the Ruble rebound hard. This reminds me of the Turkish Lira early this year and the Indian Rupee when USD/INR almost went to 70. When it seems hopeless and the currency is beaten and battered, a big rebound is likely ahead. RUB down 25% this year, I think we're pretty close to a long long term bottom.

Exactly. Love EUR/TRY short at certain levels ... . Another good carry trade.

Mmmm. If price stays at this level, it'll take me about 30 weeks to get to break even with the positive swap ... .

but the price don"t stay at the same level ... only new high new high always

... and yet another new high today ... .

On the one hand, the news looks kinda bad for Ruble strength, with speculation that the RCB will abandon plans to continue to prop up the currency sooner than later and allow the currency to free float, having pissed away a good chunk of change already in efforts to prevent the Ruble's further depreciation. http://www.bloomberg.com/news/2014-1...loat-bets.html

That being said, speculation is increasing that a rate increase is likely to be a full percentage point, but a majority of analysts surveyed by Bloomberg indicate a likely 8.5% outcome -- a .5% increase. http://www.bloomberg.com/news/2014-1...-stanley.html?

For me, I'm going to wait until after Halloween to decide whether to add additional legs to my short ... . I naturally want to see how any rate decision affects the pair's value.

It seems unstoppable, likely in the process of a capitulation move before this cross heads down, 44, 45, 46? Who knows, daily and weekly charts should show an obvious reversal.

I would ordinarily be discouraged at this point; there doesn't appear to be any chink in the bullish armor, but I'm going to embrace patience and wait for what the RCB says on the 31st ... .

Still no Zig formation ... . Which kinda means that bulls are still in control (like I need to tell anyone that).

Anyone catch todays drop???? Can understand why it hasfallen so far and fast?

Yes I've been watching this as well but I knew no bull ran forever, my guess is many big player took profit and stops were hit. If you switch into weekly chart it still look like minor correction.

Will be interesting to see what comes next..

It can be quite volatile, so I would agree that looks like minor correction ... . Wouldn't get your hopes up ... yet.

I'll wait monday morning before going long ru. So many factors can affect this pair over next 3 days... (rcb meeting, elections in eastern ukraine, gaz negotiations ,,,)

http://www.dailyfx.com/forex/market_...0000000NEvNAAW