Exactly a month ago I posted a long term forecast for Ruble where I suggested its possible return to 55:
Last week RUB formed a very strong Bearish Engulfing on the weekly frame and I was curious whether it was a signal of a significant, landscape changing event. Apparently it was. This week RUB continued to gain against USD and printed another strong bearish candle (middle chart below).
If we look at the monthly perspective, there is a good chance for the USDRUB pair to form a very convincing bearish Harami/Spinning Top type of candle in the next 4 days.
If we look closely at the chart from the Elliott Waves perspective, we could notice that the wave that ended a few weeks ago is presumably the final wave of a Super Cycle that started in 1994 and this wave is likely a diagonal.
Based on this hypothesis, we could expect wave II or wave A of II to return to the origin of the preceding diagonal, exactly to 55.56, the February 2018 low. This is the Elliott Wave theory at work.
On the other hand, the most typical retraces for wave “two” would be 0.5-0.618 of the length of wave I. In our case – 78-60. However, a retrace of 0.786 (to 35!) or even lower would not be unheard of. Waves “two” are difficult to forecast for their wide range.
What am I getting at? It is possible that Ruble is well positioned to strengthen in a relatively short period of time (waves “two” could be very swift). Ruble’s strength might build on Russia’s demand to pay for commodities in the national currency. Though it is not clear how this is going to be implemented, the Elliott Waves seemed to “know” about the event well in advance. Perhaps we are witnessing a birth of another reserve currency. We shall see.
This quote is from the forecast in December 2020:
“I view that Ruble is in slowly rising channel and the currency is close to completing its wave I off the all time low in 1994. The current wave 5 targets area of 91-100 in years 2022-2024. There is a possibility that wave 5 evolves as a diagonal, however, it is less likely. If the wave completes as a diagonal, it would need to quickly retrace to the origin of the diagonal (~55) and I view such scenario as unlikely. Once wave I completes, Ruble is expected to start a long and shallow correction, similar to the one in wave 2 of I, that could take 10 or more years.“
This is the link to the forecast on Dec 2, 2020:
@InvestingAngles offers the followers and subscribers the Weekly Series – analyses of US and Global Indices, Cryptocurrencies, Commodities, Currencies, and Large Cap stocks. Some of them can be viewed without subscription: