The GBP/INR pair continues its recovery for a third straight day after UK employment data showed a drop in job vacancies by 20,000. Despite the number falling below the previous month’s decline and the market expectation of a slip by 41,200, the markets applauded the data that showed jobs being taken up in the face of a looming recession.
On the other side of the equation, the Indian Rupee was hit by Monday’s sharp spike in crude oil prices. As a result, the currency of the third largest importer of crude oil weakened heavily against the Pound on Monday, as it lost 1.15% in its largest intraday slide in a month versus the Pound.
Some of the Rupee’s weakness also comes from its slide against the US Dollar, where it touched off another record low as foreign portfolio investors exit emerging markets in droves. The Rupee had touched off a low of 80.06 against the greenback, as an estimated $30 billion worth of foreign investments has left the country’s stock market this year alone.
An economist at Australia and New Zealand Banking Group Ltd has opined that the Rupee will continue to face downside risks from oil prices, trade imbalance, and Fed Reserve tightening. Current options pricing points to a 2 in 3 probability of a further decline in the Rupee in H2 2022, which will be bullish for the GBP/INR.
The pair is now challenging resistance at the 95.9710 price resistance. A break of this barrier continues the recovery of the pair as it aims for a measured move that ends at 98.1735 (30 May high). This move must take out the intervening barrier at 96.8638 (17 May 2022 high). If the price move extends beyond the measured move’s completion point, the 98.7015 resistance becomes the next target.
Additional price barriers to the north exist at 99.9543 (14 April 2022 high) and the 7 April/19 April highs at 101.0023. Conversely, rejection at the current resistance puts the 95.9710 price point in danger of giving way to the pullback move. If this support breaks down, the 94.3257 pivot (13 May and 14 July 2022 lows) becomes the new target for the bears.
A breakdown of this support invalidates the triangle and clears the way for a decline that targets 93.3643 (14 June 2022 low). 92.6933 () and 91.7315 (9 July 2018 high and 14 May 2020 low) constitute further targets for the bears if the bulls fail to defend 93.3643.