GBP/INR Analysis and Path Ahead
Morning Report: The GBP/INR pair is currently trading near the 105.00 level on the daily chart. Will it continue to plummet or turn around ?
The GBP/INR was trading at the critical resistance zone of 106.50, where it was susceptible to both high supply and severe rejection, as we had previously discussed in our analysis. After that, the pair overcame the resistance level and is currently trading between 104.80 and 105.00. For GBP/INR, a strong supply zone is found between 106.50 and 108.00.
- The GBP/INR exchange rate fell sharply as it came into supply around 106.50 levels.
- According to the chart, there could be further pressure to the downside for GBP/INR, and every rise offers an opportunity to sell this pair.
- The Relative Strength Index (RSI) is not indicating any sharp up move in GBP/INR price.
Please refer to the chart above. In November, the pound strengthened against the rupee, moving up from levels between 100.50 and 101.00 to 106.50. The GBP/INR fell from the 106.50 to the 104.80–105.00 zone as a result of sellers controlling the market and driving the price lower when it touched the 106.50 zone. The strong supply of the currency pair was the cause of this.
GBP/INR fell further after running into strong resistance in the 106.50 zone. As we said in our most recent study, the GBP/INR was trading near 106.50, in the resistance zone. Negative divergence occurred when the price reached higher highs and the RSI reached lower lows. This indicates that every increase presents a chance to sell the GBP/INR pair; one should continue shorting on rises and booking profits on dips, then repeat the process.
Please review the chart below as we use the RSI to talk about GBP/INR:
The GBP/INR positively recovered over that time, moving from the 104.00 zone to levels of 106.50, as seen in the accompanying chart. Not only that, but the chart stated above shows that the Relative Strength Index (RSI) is declining to lower lows while the price is increasing to higher highs. This indicates that the negative divergence between the RSI and the price on the daily chart indicates that there is probably going to be a decline in the GBP/INR.
RSI Divergence : Any price movement that deviates from the RSI is called an RSI divergence. Stated differently, a chart can indicate a shift in momentum preceding a commensurate shift in price. When a lower high comes with higher highs in the price and the RSI reading is overbought, a bearish divergence is seen.
The GBP/INR band of 103.50-104.00 is open to further drop. According to the chart, there could be more downside movement in the GBP/INR in the days ahead, and each increase presents a potential selling opportunity for the currency pair.
Please review the daily chart to see the GBP/INR support and resistance levels. Every level is shown in a spot chart.
|
GBP/INR |
Support |
Resistance |
|
Level 1 |
104.00 |
106.50 |
|
Level 2 |
103.50 |
108 |