GBP/INR doubles top as USD/INR forms an ascending triangle
Invezz.com – The exchange rate has gone nowhere in recent weeks as shares of the Bank of England (BoE) and the Reserve Bank of India (RBI) diverge. It was trading at 102.17 on Friday, a few points below the year-to-date high of 102.67. It has jumped more than 19% from the nadir in 2022.
On the other hand, he was trading at 82.13, where he has been in recent weeks. This price is a few points below the year-to-date high of 83.25.
RBI and BoE divergence
There is a growing chance that the RBI and BoE will diverge in the coming months as UK inflation remains stubbornly high. Data released on Wednesday showed that UK inflation remained at a high level in March.
Data from the Office for National Statistics showed the general consumer price index fell to 10.1% in March from a 10.4% rise the previous month. These numbers mean that the country’s inflation is much higher than that of other countries, including those of the European Union.
The ONS noted that food prices were the main drivers of inflation. Food and non-alcoholic beverages saw their prices rise by 19% in March. That was the highest increase since 1977. Core inflation, which excludes food and energy, also held at a high point in March.
Watch here: https://www.youtube.com/embed/WSIuRlbhHuI?feature=oembed
Therefore, the Bank of England (BoE) is between a rock and a hard place considering that the labor market remains tight. As such, analysts believe the bank will raise rates again when it meets in May. It could also go higher in the coming meetings even as the UK remains in a period of stagflation.
The RBI, on the other hand, is expected to continue pausing its interest rate hike policy for a while. In April, the bank decided to pause the hikes even as it warned it might be forced to offer more hikes this year.
GBP/INR Price Forecast
TradingView GBP/INR chart
The GBP/INR exchange rate has been on a slow upward trend in recent months. The pair has recently found resistance at the key point of 102.67, the high point on December 13. It has formed what looks like a double top pattern with the neckline at 96.86. The pair remains above the 25 and 50 day moving averages.
Therefore, the GBP/INR pair will stay in this range for a while and then break down due to the double top pattern. If this happens, the pair is likely to drop to key support at 96.85.
On the other hand, the USD/INR pair has formed an ascending triangle pattern, indicating that it is likely to break out to the upside. If this happens, the pair is likely to jump to the key resistance at 83.
The post GBP/INR doubles top as USD/INR forms an ascending triangle appeared first on Invezz.
This article was originally published by Invezz.com
