Trade Recommendation: EUR/RUB

The Euro/Russian Ruble pair (EUR/RUB) supercharged its uptrend in December 2013 when it took out resistance of 45. The market had a strong base below 45 that it went parabolic after the breakout, catapulting the pair to as high as 97.907 in December 2014. In one year, the Euro grew by 54% against the Russian Ruble.

At this price, the market was in extreme overbought territory. Trend followers and breakout traders took profits and drove the market down to 52.417 in April 2015. Bulls stepped in to bottom fish, which inspired a rally that helped lift the market to 93.69 in January 2016.

Sensing that a lower high was in place, market participants started to dump positions to limit their exposure and protect their capital. EUR/RUB plunged as it generated a series of lower highs until it bottomed out at 59.4435 in April 2017. The pair has been rallying since and it may be ready to start another bull run.

Technical analysis show that the Euro/Russian Ruble pair has broken out of a symmetrical triangle pattern on the monthly chart when it went above 75 on April 10, 2018. This comes after the pair generated a higher low of 59.4435 last year. In addition, the pair is far from overbought territory. While bears are working hard to regain control of the market, bulls have a lot of room to operate.

The strategy is to buy on dips as close to 75 as possible. As long as bulls are above this level, they may have the momentum to take the pair to our initial target of 95.

The process may take less than a year.

Monthly Chart of EUR/RUB

As of this writing, the EUR/RUB pair is trading at 76.363.

Summary of Strategy

Buy: Buy on dips as close to 75 as possible.

Target: 95

Stop: 73

 

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.