USD/RUB

For example, here is the spread at the end of today's New York session -- a whopping 104.2 pips:



So, if you're short on this pair and you think you're doing swell, all of sudden the spread widens and "BAM!", it looks like the position is in the crapper ... .

http://www.dailyfx.com/forex/fundame...rols-Next.html

Pretty much doom and gloom ... .

Broker will not let you block the flow. It's a cold war between US and Russia. How dare you wana take advantage. lol

Just trying to help the Russian people out by going long Ruble ... .

But would be happy to bail at 41.75 ... .

Waiting for the formation of a lower high and lower low on the 4H before wading in further ... .

Price is also still above the 4H 200 Period SMA and the 100 Period SMA with no signs of a cross in the making.

The PSAR says trending lower, but I've seen that before ... .

Stochastic slow signal lines have crossed through the 80 on the bid side and point lower on the ask ... .

So, still waiting ... . Accruing swap ... .

aie aie http://www.bbc.com/news/world-europe-30025138

If the war start USD/RUB go to 50 ?!

Long long term the Ruble looks absolutely horrible. Interesting to see this chart. With that said, I still think we're going to be ranging 40-50 for a while; plenty of opportunities to trade in and out.

http://www.businessinsider.com/why-t...ecover-2014-11

Good article, but ... .

If the past several weeks have taught us anything, it is that Russia is beginning to realize that it is doing business in a different world than ten or twenty years ago. The RCB has ended its backward policy of supporting their currency via announced trading bands and interventions of which speculators obviously have taken advantage. Although it is unclear the extent to which mere "speculation" in the currency has led to the rout of the Ruble, as opposed to other, more obvious economic realities such as the price of oil and the negative impacts of self-inflicted wounds over the questionable value of continued involvement in Ukraine, the mere existence of these trading bands no doubt led to an obvious complacency regarding the relative value of the currency as compared to those of other global economies. The notion, simply put, was that if the Ruble was within the trading band, its value was reasonable and nothing much needed to be done about it. If it moved outside the acceptable trading band, the RCB merely moved the band, and then threw a little money at it.

That is the stupidest way a central bank can approach the problem of addressing the relative value of its currency, since it is not arbitrary bands that control the value of the currency, it is the market that controls its value, which is why the RCB took a good step forward in basically now allowing the currency to free float with unannounced interventions when value of the currency becomes a matter of "undue concern."

The end of telegraphing interventions to the market is, however, just a first step. Unfortunately, the RCB trotted out one of the other weapons in its arsenal -- interest rates -- in the middle of muddling through the size of its interventions and the modification of policy regarding its use of trading bands, so the dip was just another opportunity for "speculators" to short the Ruble. All in all, the hike didn't do much good, the rate is now at 9.5%, and the RCB is running out of room to hike it more without looking like a third world economic disaster area. (Currently, only Argentina (13.08%), Brazil (11.25%), Iran (14.15%), Nigeria (12.0%), Pakistan (10.0%), and Venezuela (17.76%) have higher interest rates than Russia's (9.5%), http://www.tradingeconomics.com/coun.../interest-rate).

All that being said, it could very well be that this current level is a fair and accurate measure of the value of Russia's currency and that it will not recover from this round of depreciation, not because it has historically done so, but just because it has never had the opportunity to be valued by the global marketplace. In essence, throw out your charts from pre-November 2014; the fair valuation of the Ruble relative to other currencies begins ... (wait for it) now.

As of today, still no 100/200 SMA average cross (virtually no matter which time frame you look at longer than an hour), and although price broke 46.00 for a period of time, it rebounded (possibly assisted by weakening oil prices).

Still in my short at 44.4 or so ... . At least the positive swap grinder monkey is still going at it ... .

And, for another take on the Ruble, here's a really basic analysis of what to look for in Ruble valuation: http://www.danskebank.com/en-uk/ci/P...47_131114.pdf; with the more detailed report at http://danskeanalyse.danskebank.dk/abo/FXEdge131114/$file/FXEdge_131114.pdf

As I have previously noted here, I look at USD/RUB short as a potential good long-term carry trade, assuming that one can get in at a "good price," and that "good price" has been hard to determine as of late. But the Danske Bank analysis may simplify the way I examine what a good price is. In a nutshell, the analysis points out a strong correlation between Ruble value and oil prices and that, in fact, the crisis in Ukraine has had minor effects on the Ruble's value overall. So, in the end, as oil prices go, so goes the Ruble. (Danske Bank's forecast, by the way, is for USD/RUB to be at 49, 51, and 51, on three-, six-, and twelve-month horizons, which is not necessarily what I wanted to hear, since my current average position value is at 44.5-ish. But I take these "white papers" with a grain of salt since they issue them monthly and frequently change their forecasts from month to month depending on where prices go between reports. However, I do have to agree with the oil/currency price correlation; the data is somewhat indisputable.)

In any event, Danske Bank acknowledge that oil prices are in the process of bottoming out and that increasing oil prices may provide support to the currency in the coming months, a fact that is hard to discern from the daily chart:



http://finviz.com/futures_charts.ashx?t=CL&p=d1

Consequently, OPEC production and what is in store for OPEC's November 27th meeting may be important, since OPEC participants may decide that prices have slid too much and to cut back production. Not everyone is making money, after all, on $80 a barrel oil and would be losing money at this point in time if they sold at current prices (break even prices for production: Saudi Arabia -- $89; Iran -- $130; Iraq -- $114; Kuwait -- $44; $71 -- Qatar; Venezuela -- $116; Libya -- $185; Russia (non-member) -- $105), http://www.cnbc.com/id/102123934.

Oil prices bounced somewhat today:



http://finviz.com/futures_charts.ashx?t=CL&p=h1

... on building pressure on OPEC to cut ... . http://www.bloomberg.com/news/2014-1...ec-to-act.html But from the news reports I have looked at that discuss the probability of OPEC cutting back, there is a mix of opinion as to whether a cut can or will occur at this meeting ... .

Current Oil Prices as Of Friday Close:



http://www.bloomberg.com/energy

From everything I've looked at, experts anticipate prices to fluctuate between here and 80.00 USD/bbl. for the foreseeable future, which is roughly a 6-9% fluctuation in price (from the low to 80.00). If there is a fairly direct correlation between oil prices and Ruble value, this would mean that USD/RUB would trade roughly between 49 and 44 going forward short-term. Guess we'll see how accurate Danske Bank's oil price/Ruble value correlation is ... .

Very good analysis there. USD/RUB looking good so far in early trade. Head of the Russian central bank was on air over the weekend trying to quell Ruble weakness fears. It's very possible we may have seen the worst.

I'm of that opinion, too, if Ruble strength is so closely linked to oil prices ... . Oil prices have kind of bottomed out around 75-ish ... .

Out of my USD/RUB short at a loss ... . My broker increased the margin requirement to 125.00 for pair overnight ... .

Who are you with if you don't mind me asking?

125.00 for the pair? What do you mean exactly? I get 20:1 margin on exotics like RUB.

FXCM ... . Just for comparison, EUR/USD uses 32.00 % ... . USD/RUB was 50.00 (I assume that was 25:1, since margin here is generally 50:1); now it is one third that, so it is like 8:1 ... . They more than doubled my exposure to the pair overnight ... .

That's really annoying, sorry to hear that as I know you were in this trade for the long-haul. Have you emailed them and asked why they changed the margin on it? Was that the only pair affected?

Sorry, my math is off somewhat as to the ratio ... . But, it any event it increased the exposure quite a bit ... .

There was probably an announcement I missed somewhere (probably in my email in-box that I haven't checked all week). I know that this occurs from time to time in pairs that are experiencing volatility. For example, for a brief period I know that the margin for EUR/CHF was changed due to volatility in that pair associated with the floor that the Swiss National Bank had established for the pair ... .

But, given the size of the position, I'm not going to sweat it. I wasn't in at very good prices, but was getting good swap on the position, so I had intended to hold for several months ... . There are better entries, I think, at these levels, than where I started.