GBP/INR Analysis and Path Ahead
Morning Update : On the daily chart, the GBP/INR pair is trading at the 105.50 mark. Will it keep going down or up ?
As we mentioned in our earlier analysis, the GBP/INR was trading at the crucial resistance zone of 106.50, where it was vulnerable to both strong supply and strong rejection. The pair then broke through the resistance level and is now trading in the 105.50 region. A robust supply zone for GBP/INR is located between 106.50 and 108.
- GBP/INR experienced a significant decline upon encountering supply near 106.50 levels.
- The chart indicates that there may be additional downward pressure on GBP/INR and that each increase presents a chance to sell this pair.
- The Relative Strength Index (RSI) is not indicating a sharp increase in value.
Kindly see the above chart. The pound gained strength vs the rupee in November, rising from the 100.50–101.00 range to 106.50 levels. After touching the 106.50 zone, sellers controlled the market and drove the price lower, causing the GBP/INR to drop from the 106.50 to the 105 zone. This was due to a robust supply of the currency.
After encountering significant resistance in the 106.50 zone, GBP/INR continued to fall. As we mentioned in our last research, the GBP/INR was in the resistance zone around 106.50. There was negative divergence when the price made higher highs and the RSI made lower lows.
Please have a look at the chart below, where we shall discuss GBP/INR using the RSI:
The attached chart shows the positive recovery of the GBP/INR from the 104.00 zone to levels of 106.50 throughout that period. Furthermore, the aforementioned chart indicates that although the price is rising to higher highs, the Relative Strength Index (RSI) is falling to lower lows. This suggests that there is likely to be a decrease in the GBP/INR due to the negative divergence between the RSI and the price on the daily chart.
RSI Divergence : An RSI divergence is a price movement that is opposite to the RSI. Or, to put it another way, a chart may show a change in momentum before a matching change in price. A bearish divergence is observed when the RSI reading is overbought and a lower high appears with higher highs in the price.
The range of 103.50-104.00 for GBP/INR is available for further decline. The chart indicates that there may be additional downside movement in the GBP/INR in coming days and every rise is a selling opportunity for GBP/INR going forward.
Please check the support and resistance level of GBP/INR on the daily chart. All levels are in spot chart :
|
GBP/INR |
Support |
Resistance |
|
Level 1 |
104.00 |
106.50 |
|
Level 2 |
103.50 |
108 |