GBP/INR forms a double-top ahead of the RBI rate decision
The GBP/INR exchange rate jumped to the highest point since December 14 as UK’s recession risks eased. The pair rose to a high of 102.59, which was about 5.53% from the lowest point in March of this year.
RBI interest rate decision aheadCopy link to section
The GBP to INR pair continued rising as the British pound continued soaring, Sterling has jumped against the USD by 20% from the lowest point in 2022 and by more than 5% against the euro. This recovery is mostly because the British economy has been more resilient than what most analysts were expecting.
Data published on Wednesday showed that the country’s services PMI came in at 52.9, higher than the median estimate of 52.8. That is a sign that the economy was doing well. And last week, a report by Gfk showed that the country’s consumer confidence jumped to the highest point in months.
The UK has also been immune to the recent banking crisis. Therefore, there is a likelihood that the Bank of England (BOE) will hike interest rates when it meets later this month. This view was confirmed by the Chief Economist on Tuesday.
On the other hand, the Indian economy is showing signs of slowing down. As I wrote on Tuesday in this report, the head of Axis Bank warned that the country was slowing down. This was a notable figure considering that the Axis is the third-biggest bank in the country.
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The next key catalyst for the GBP/INR pair will be the upcoming interest rates by the Reserve Bank of India (RBI) scheduled for Thursday. Economists believe that the bank will deliver another 0.25% hike in a bid to battle inflation that remains above the tolerance level of between 4% and 6%.
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GBP/INR technical analysisCopy link to section
GBPINR chart by TradingView
The daily chart shows that the GBPINR pair has been in a bullish trend in the past few days. It has moved to the important resistance point at 102.59. The pair also rose above the key resistance at 101.69, the highest point on February 2. It has also moved above the 25-day and 50-day moving averages.
Most importantly, the pair has formed a double-top pattern, which is a bearish sign. Therefore, there is a likelihood that the GBP to INR will pull back after the RBI decision. However, a move above the key resistance at 102.87 will push it to the next key resistance at 103.75.