EUR/INR has been in a steep decline since the start of the week, nearing multi-week lows as the euro weakens ahead of the European Central Bank’s (ECB) upcoming rate decision today.
The ECB is widely expected to cut interest rates by 25 basis points (bps), trimming the Main Refinancing Rate to 3.4% from 3.65% and the Deposit Facility Rate to 3.25% from 3.5%. This anticipated move comes as the Eurozone faces an uneven, cooling economy, leaving the euro under heavy pressure.
Meanwhile, the US Dollar Index (DXY), which measures the USD against a basket of currencies, continues to rise as markets increasingly price in a Donald Trump victory in the upcoming US presidential election. Trump’s economic plans, which focus on deregulation across several sectors, are fueling optimism for the greenback.
With the ECB set to dominate Thursday’s European session, all eyes will also be on US retail sales data. Markets expect a 0.3% month-on-month rise in September retail sales, up from August’s 0.1%, which could further support the dollar’s strength. As the euro struggles with ECB rate cuts and a weak economic outlook, EUR/INR may face continued downside in the near term.
Technical Outlook – EURO / INDIAN RUPEE
The EUR/INR pair hit a low of 91.22 yesterday, marking its lowest level since August 5, 2024, and closed with an intraday decline of 0.27% at 91.31.
Since the start of the month, the pair has reversed from its high of 93.99, erasing more than 2% of its previous rally. The chart shows the formation of long bearish candlesticks, signaling strong selling pressure.
The pair is now trading near key multi-week support at 91.05, and a decisive break below this level could trigger further downside towards the next support zone of 90.75-90.55.
However, failure to break below 91.05 could provide temporary relief, with potential recovery targets at 91.55-92.20 in the near term.
Beyond technical factors, the euro is heavily influenced by political, geopolitical, and monetary policy uncertainties. Therefore, key developments in these areas will likely shape the pair’s trajectory moving forward.
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Commodity Samachar Securities
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