The pound sterling rose marginally against the Indian rupee on Friday, with the GBPINR up by 0.05% to trade at 104.22 at the time of writing. The move saw the continuation of a three-day losing streak during which the GBPINR trading pair gained 1.19%. The rupee has lacked propulsion this week, with its economic data released on Tuesday showing a stagnation in its manufacturing activities and a small growth in its services output in April. Meanwhile, the GBP had more going for it, providing propulsion to the upside.
The HSBC India Services PMI rose by 0.5 percentage point to 61.7, while the HSBC India Manufacturing PMI remained unchanged at 59.1. On the other hand, the pound sterling got tailwinds from the S&P Global/CIPS UK Services PMI , which came in at 54.9, better than the consensus forecast figure of 53.0 and a significant improvement from March’s 53.1. However, Britich manufacturing activity declined during the period under review, with the S&P Global/CIPS UK Manufacturing PMI declining to 48.7 from 50.3, which was also the forecast figure.
The Indian rupee is also likely to feel the weight of rising oil prices, considering India’s larger crude oil bill compared to the UK’s. Also, the Indian elections, which started on 19 April and will run until 1 June are likely to bring an element of instability to the rupee as it is likely to be followed by increased government spending during the period. Therefore, some investors are likely to bet against the rupee in the coming weeks. Nonetheless, the Reserve Bank of India has established a reputation for intervention and this could limit the downside for the rupee.
Technical analysis
The bulls are currently in control of the GBPINR market. However, they will need to keep the pair above 104.20 to sustain the upward push. If they do so, they are likely to break the resistance at 104.38 and potentially test 104.48 in extension. Conversely, a move below 104.20 will favour the sellers to take control. That could enable them to breach the support at 140.01 and potentially target 103.88 in extension.
