GBP/INR Analysis and Path Ahead
Morning Report: The GBP/INR pair is trading at 104.70 on the daily chart. Will it continue to drop or turn around ?
The GBP/INR was trading at the critical resistance level of 106.50, where it was vulnerable to both large supply and hard rejection, as previously discussed in our study. Following that, the pair closed below the resistance level and is currently trading around 104.50. GBP/INR has a large supply zone between 106.50 and 108.00. We discussed how GBP/INR could reach 103.50-104.00, which it achieved last week.
- The GBP/INR exchange rate fell precipitously as supply approached 106.50.
- According to the chart, GBP/INR may experience increased negative pressure, with each gain indicating a chance to sell this pair.
- The Relative Strength Index (RSI) does not point to a quick increase in the GBP/INR price.
Please refer to the chart above. In November, the pound climbed against the rupee, from 100.50 - 101.00 to 106.50. The GBP/INR fell from 106.50 to 104.00 as sellers dominated the market, driving the price down as it approached 106.50. This was caused by the currency pair's plentiful supply. We predicted in our earlier research that the GBP/INR would reach 103.50-104.00 in this downtrend, which it did last week. We are now expecting a pullback into the supply zone, but only as a shorting opportunity because demand in GBP/INR is weak.
GBP/INR fell further after reaching major resistance at 106.50. As we stated in our most recent analysis, the GBP/INR was trading near 106.50, which is a resistance level. Negative divergence occurred when the price reached higher highs while the RSI fell to lower lows. This means that every advance gives an opportunity to sell the GBP/INR pair; continue shorting peaks and profiting on declines before repeating the procedure.
Please see the chart below, as we will use the RSI to discuss GBP/INR.
The GBP/INR recovered well at the time, increasing from 104.00 to 106.50, as shown in the accompanying chart. Furthermore, the chart above shows the Relative Strength Index (RSI) falling to lower lows while the price rises to new highs. The daily chart shows a negative divergence between the RSI and price, implying that the GBP/INR will likely fall.
RSI divergence refers to any price movement that deviates from the RSI. To put it another way, a chart can show a change in momentum before a corresponding change in price. When a lower high coincides with greater highs in the price and the RSI reading is overbought, a bearish divergence occurs.
The GBP/INR range of 103.50-104.00 was achieved after further reductions. According to the chart, the GBP/INR could see further downward volatility in the coming days, with each spike signaling a potential selling opportunity for the currency pair.
Please see the daily chart to establish the GBP/INR support and resistance levels. Each level is represented by a spot chart.
|
GBP/INR |
Support |
Resistance |
|
Level 1 |
101.50 |
106.50 |
|
Level 2 |
100.50 |
108.00 |