GBP/INR continued its recent fall for the second consecutive day yesterday. The poor performance of global indexes and mixed US macroeconomic figures fuel. Demand for the safe-haven Greenback which pressurized the pound.
Wednesday release of minutes from the US Federal Reserve’s last interest-rate setting meeting on January 1. Showed the central bank in perhaps a rather more hawkish mood than the markets had expected. And warned again that interest rates might have to remain higher for longer in order to bring inflation to heel.
Policymakers worried that China emergence from its more draconian Covid-lockdown measures. Along with Russia’s ongoing war in Ukraine, will increase the upward pressure on global prices. The Fed raised borrowing costs by a quarter of a percentage point last month.
The UK of course has its own inflationary problems, but, given the underlying fragility of the economy. Bank of England felt to have less room to raise borrowing casts without causing significant recession. Growth data have shown that the country just scraped some growth at the end of last year. But the BoE still worries that contraction will be unavoidable in 2023.
BoE Monetary Policy Committee member Catherine Mann said on Thursday. That it was too soon to say whether the risks posed by last year’s inflation surge had peaked. And that the central bank should continue to raise rates.
Technical View
GBP/INR pair is forming a symmetrical triangle pattern on the daily chart. The pattern having a crucial support of 98.65. A break above will confirm the target for 97.60-97.20 in near future.
Alternatively, if GBP/INR is unable to break it, then there would be a probability for pullback. The pair may retest immediate resistance 99.55-101.50.
RSI 14 and 9 SMA is giving a negative cross over. The pair is trading below the short term moving average.
Sentiment is expected to remain downside following the above technical aspects.