Russia's economy continues to be pressured by high inflation.

The Russian ruble has weakened to over 91 rubles per U.S. dollar, nearing its lowest level in four months, as investors assess the future economic and financial outlook for Russia. Additionally, the Central Bank of Russia is likely to raise interest rates further next month due to the continuous rise in interest rates, which is mainly driven by economic tensions that have increased the prices of goods and services due to costly imports.

The Central Bank of Russia raised the interest rate by 100 basis points to 19% in its September meeting. There is an increasing likelihood of another rate hike in October. Policymakers have also raised their inflation forecasts for Russia to between 6.5% and 7% by the end of this year. However, there is an additional forecast that inflation will decrease to 4-4.5% by 2025. The most recent inflation rate remains at 9.1%, largely due to rapidly increasing domestic demand, while the government's ability to source goods and services continues to be pressured by sanctions from Western countries and the United States.

Elvira Nabiullina, Governor of the Central Bank of Russia, has warned about the increasing risk of recession alongside inflation, as Russia remains in a state of war with Ukraine. This situation has slowed down business development and global market competitiveness, potentially further slowing Russia's economic growth in the future due to internal labor migration, external supply and demand constraints, and the protracted war.

Russia's inflation rate stood at 9.1% in August, marking a continued peak since 2023 and exceeding the forecast of 9%. This is primarily due to the continuous rise in the prices of goods and services. The latest figures show an increase of over 11.7%, following an 11.4% rise in July. The import of goods, mostly food, has caused food prices to rise rapidly, while the prices of non-food items have slightly slowed to 6.1%.

Preliminary data shows that Russia's budget deficit has decreased to 0.3 trillion rubles in the first eight months of 2024, compared to a budget deficit of 2.1 trillion rubles in the same period the previous year. The report indicates that domestic revenue has increased by 35.5% year-on-year, amounting to over 23 trillion rubles. The majority of the country's revenue still comes from energy exports, resulting in a nearly 60% surge in energy revenue due to oil prices being higher than expected. Meanwhile, overall spending increased by 22.2% as the government continues to allocate substantial financial resources for national defense.

Techical analysis data (5H)

Resistance: 91.5254, 92.0007, 92.4878

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 90.0759 - 90.563 but cannot break the support at 90.563, you may set a TP at approximately 92.0007 and SL at around 89.6005 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 91.5254 - 92.0007, you may set a TP at approximately 92.4878 and SL at around 90.0759 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 91.5254 - 92.0007 but cannot break the resistance at 91.5254, you may set a TP at approximately 90.0759 and SL at around 92.4878 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 90.0759 - 90.563, you may set a TP at approximately 89.6005 and SL at around 92.0007 or according to your acceptable risk.

Pivot point September 13, 2024 09:53 PM. GMT+7