Yes. Blue is leeward boat and rule 11 allows her to luff if no other rule conflicts. Because Red and Blue have not yet reached the two-length zone, they are, under normal conditions, not yet "about to round" (however, see case 84, for discussion of "about to round" especially in heavy weather). Thus Rule 18  does not apply yet, and Blue is permitted to luff if she complies with rule 16.