Russian Rouble at Three-Year High Against Yuan Before Putin Visit

The mechanism works both ways. If the deals are seen as underwhelming or if the visit produces statements rather than signed contracts, the rouble could give back its gains quickly. The liquidity risk in this cross means that even a modest pullback in market sentiment can lead to outsized moves. Traders should watch the Chinese yuan's broader strength as well. If the yuan weakens across the board due to domestic economic data, the RUB/CNY rally may partly reflect yuan weakness rather than rouble strength.

The Decision Point: Trade the Reaction, Not the Rumor

The next concrete decision point is the outcome of the political meetings. The rouble's current price already embeds an optimistic assumption. A confirmation of multiple large-scale deals – especially in energy or finance – would likely extend the rally toward the next resistance level around the 2022 highs. A disappointment could trigger a sharp reversal as speculative longs unwind.

For traders looking to position, the currency strength meter can help assess whether the rouble's momentum is broad-based or concentrated in this cross. The weekly COT data would also be useful to see if speculative positioning is stretched. Given the thin nature of the market, the cleanest trade is to wait for the event itself and trade the reaction, not the rumor.

The broader forex market analysis context is important. The rouble’s rally against the yuan comes as oil prices remain resilient, providing support to Russia’s terms of trade. Any sudden drop in oil would weaken the rouble quickly, regardless of political deals. The link between the rouble and energy prices is well established, and the current move does not break that correlation.

In summary, the rouble’s strength against the yuan is a politically driven spike in a thin market. The next catalyst is the visit itself. Traders should focus on the deal announcements, not the price action beforehand. A confirmed deal signals a new equilibrium. A lack of deals signals a return to the old one.