The GBP/INR price slipped slightly in October as the British pound came under pressure. After crashing to a low of 85.10 in September, the pair made a strong comeback and rose to a high of 90.74. It has risen by more than 6.7% from the lowest level this year.
The GBP/INR price bounced back after falling to October’s low of 85.10. This price action happened amid heightened concerns about the UK economy. In September, the new administration announced a series of tax cuts that analysts believe could lead to more weakness of the UK economy. Some market watchers like Nouriel Roubini even warned that the UK was slowly turning into an emerging market.
In the same month, the Bank of England (BoE) and the Reserve Bank of India (RBI) continued to tighten their policies. Last week, the RBI delivered its fourth interest rate hike of the year as it continued fighting against inflation. The country’s inflation has done better than in other countries because of the cheap oil and gas from India.
In the UK, the BoE decided to hike interest rates by another 0.50%, which was lower than what similar banks like those in Switzerland, European Union, and in the US did. It also intervened by announcing that it will start buying back government bonds. Analysts expect that it will deliver a surprise interest rate hike this month to bring more confidence to the market.
The four-hour chart shows that the GBP to INR price has made a strong recovery in the past few days. In this period, it moved above the 25-day and 50-day moving averages. The two have even made a bullish crossover while the MAC has moved above the neutral point. It has formed what looks like a bullish consolidation pattern.
Therefore, the GBP/INR price will likely continue rising as bulls target the next key resistance level at 93.25. The stop-loss of this trade will be at 90.0.
This post was last modified on Oct 03, 2022, 07:52 BST 07:52