The GBP/INR is down 0.42% this Wednesday after a positive start to the week saw the pair gaining nearly 0.7% on Monday and Tuesday. The Indian Rupee is gaining traction ahead of the release of the minutes of the last meeting of the Reserve Bank of India (RBI).
The Rupee has gained significant strength against the Pound in the last three months. This is despite a surge in oil prices and movement of around Rs 14,000 crore from the Indian equity markets in June by foreign portfolio investors. The Pound has faced pressure from the impact of inflationary trends on the local economy. Furthermore, a perceived lack of will by the Bank of England to tighten rates more aggressively has left the Pound a bit weaker than its peers.
The RBI raised interest rates in its last MPC meeting on 8 June by 50bps to take the interest rate in India to 4.9%. The move was taken to ensure the maintenance of the apex bank’s inflation targets and also support the growth of the Indian economy. The RBI minutes of the meeting that produced the latest rate hike in India will allow investors to get a glimpse of the bank’s future monetary policy outlook.
As of writing, the pair is off session lows and is now trading flat.
The four-hour Chart reveals that the asset is challenging the resistance at the 95.9710 price level, the site of a previous low of 19 May 2022. If the bulls succeed in uncapping this barrier, 96.8638 becomes the next port of call. Above this level, additional northbound targets are seen at 98.1735 (30 May 2022 high), and 98.7015, where the 11 April 2022 low resides.
Conversely, a rejection at 95.9710 allows for a pullback that initially targets the 95.0820 psychological price level and 14 June 2022 high. Only when this level gives way can the bears force the price activity toward the 14 June low at 93.3643. 92.00 and 91.5533 are other downside targets that remain currently out of reach.