GBP/INR Analysis
Morning Update: GBP/INR trading near 105.50 on daily chart, Will it decline or rise?
The GBP/INR was trading at the critical resistance zone of 106.50, where it was subject to strong supply and severe rejection, as we discussed in our previous analysis. Following that, the pair broke below the resistance level and is currently trading close to the 105.50 zone.
- After rising sharply from the 100.50–101.00 range, the GBP/INR encountered supply at 106.50 levels.
- According to the chart, there might be further downside movement around 103.50-104, as the daily chart of GBP/INR hitting a significant resistance.
- Since there is no longer any demand for the price, the Relative Strength Index (RSI) points to a downward swing.
Please refer to the chart above. In November, the pound strengthened against the rupee and moved up from the 100.50–101.00 zone to 106.50 levels. Following its touch of the 106.50 zone, the GBP/INR was met with a robust supply, with sellers controlling the market and driving the price lower.
Check here how the GBP/INR declined further after hitting strong resistance in the 106.50 zone. The resistance zone around 106.50 was present for the GBP/INR, as we noted in our earlier analysis. The price was making higher highs, but the RSI was making lower lows, indicating bearish divergence.
Please have a look at the chart below, where we shall discuss GBP/INR using the RSI:
The attached chart illustrates how the GBP/INR positively recovered from the 104.00 zone to reach levels of 106.50 at that time. Additionally, the chart above shows that although the price is reaching higher highs, the Relative Strength Index (RSI) is reaching lower lows. This signals a negative divergence between the RSI and the price on the daily chart, indicating that a decline in the GBP/INR is likely.
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.
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 |