Yesterday’s trade saw USD/RUB within the range of 40.390-41.163, reaching a new all-time high. The pair closed at 40.877, gaining 1.16% on a daily basis.
At 7:56 GMT today USD/RUB was up 0.39% for the day to trade at 41.029. The pair broke the first and the second key weekly resistance levels and touched a daily high at 41.145 at 7:00 GMT.
Fundamentals
United States
Housing starts and Building permits
The number of housing starts in the United States probably increased to 1.004 million in September from the seasonally adjusted annual rate of 0.956 million during the prior month. The latter was a 14.4% decrease from the revised July estimate of 1.117 million, or the largest drop since April 2013. Single-family housing starts were at a level of 643 000 in August, or a 2.4% drop compared to the revised July figure of 659 000. The August rate for units in buildings with five units or more was 304 000, according to data by the US Census Bureau.
Housing Starts represent a gauge to measure residential units, on which construction has already begun, every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.
The number of building permits in the country probably increased to 1.029 million in September from a revised up annual level of 1.003 million in August (0.998 million previously). Single-family authorizations in August were at a rate of 626 000, or 0.8% lower compared to the revised July figure of 631 000. Authorizations of units in buildings with five units or more were at a rate of 343 000 in August, according to the Census Bureau.
Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Permits usually lead housing starts, but are not required in all regions of the United States. Building permits, as an indicator, provide information regarding demand in US housing market. A higher than anticipated number would support the greenback. The official housing data by the US Census Bureau is due out at 12:30 GMT.
Reuters/Michigan Consumer Confidence
The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States slightly worsened in October. The preliminary reading of the corresponding index, which usually comes out two weeks ahead of the final data, probably fell to 84.1 during the current month from a final value of 84.6 in September. The latter has been the highest level since July 2013. The survey encompasses about 500 respondents throughout the country. The index is comprised by two major components, a gauge of current conditions and a gauge of expectations. The current conditions index is based on the answers to two standard questions, while the index of expectations is based on three standard questions. All five questions have an equal weight in determining the value of the overall index.
The sub-index of current economic conditions climbed to a final 98.9 from a preliminary reading of 98.5 in September, after being at 99.8 in August. The latter has been the highest figure since July 2007. The sub-index of consumer expectations came in at a reading of 75.4, slightly below a preliminary value of 75.6 in September, but improving from 71.3, registered in August.
In case the gauge of consumer sentiment decreased at a larger rate than projected, this would reduce demand for the greenback. The preliminary reading is due out at 13:55 GMT.
Russian Federation
Unemployment
The rate of unemployment in the Russian Federation probably rose to 4.9% during September, according to expectations, from 4.8% in August, as the latter has been the lowest rate in over 11 years. The unemployment rate in the country has been falling since February, when it stood at 5.6%. The number of unemployed people was reported at 3.66 million in August, down from 3.7 million in July. In August 2013 there were 3.96 million people unemployed.
840 000 people were officially registered as unemployed in August this year, or a decrease by 10 000 compared to July and also 90 000 less compared to August 2013.
The rate of unemployment represents the percentage of the eligible work force which is unemployed, but is actively seeking employment. It reflects overall economic state in the country, as there is a strong correlation between consumer spending levels and labor market conditions. Low rates of unemployment are accompanied by increased spending, which causes a favorable effect on corporate profits and also leads to overall growth acceleration. However, if unemployment rate rose more than projected, this would lead to a sell-off in the ruble. The Federal State Statistics Service will release its official report at 12:00 GMT.
Retail sales
Annualized retail sales in the Russian Federation probably rose at a pace of 1.5% in September, according to the median estimate by experts, following another 1.4% gain in August. This indicator reflects the change in the total value of inflation-adjusted sales by retailers in the country and provides key information regarding consumer spending trend in a shorter term, while the latter is a key driving force behind economic growth. Therefore, a higher than expected rate of increase in sales usually has a positive effect on the local currency. The Federal State Statistics Service is to publish the official data at 12:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 40.810. In case USD/RUB manages to breach the first resistance level at 41.230, it will probably continue up to test 41.583. In case the second key resistance is broken, the pair will probably attempt to advance to 42.003.
If USD/RUB manages to breach the first key support at 40.457, it will probably continue to slide and test 40.037. With this second key support broken, the movement to the downside will probably continue to 39.684.
The mid-Pivot levels for today are as follows: M1 – 39.861, M2 – 40.247, M3 – 40.634, M4 – 41.020, M5 – 41.407, M6 – 41.793.
In weekly terms, the central pivot point is at 40.165. The three key resistance levels are as follows: R1 – 40.679, R2 – 40.992, R3 – 41.506. The three key support levels are: S1 – 39.852, S2 – 39.338, S3 – 39.025.
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