GBP/INR: Showing an Upside Bias at the Beginning of the Week
The Pound to Indian Rupee has been moving sideways since spiking up to a high of 83.340 last Tuesday when Theresa May announced an early June election.
After three days of trading laterally it is starting to resemble a bull flag continuation pattern, which increases expectations of an extension higher.
The pair recently broke above a major trendline, which is a sign the short-term trend could be changing. Combined with the bull flag it suggests further upside on the horizon.
The Flag normally moves as far as the ‘pole’ extrapolated higher from the point of the break.
This would lead to a move to a target at roughly 85.00, however, strong resistance lies at 84.000 suggested by February’s highs and this provides an initial target.
The 200-day moving average at 84.39 provides another nearer target since it is likely to provide strong dynamic resistance to the uptrend.
Key Data Out This Week
For the Rupee: there is no tier one data out next week but Money Supply (M3) is out at 12.30 on Wednesday April 26 - and the Federal Fiscal Deficit, Bank Loan Growth, Deposit Growth and Infrastructure Growth are all out at 12.30 GMT on Thursday.
For the Pound: look out for GDP data on Friday (09.30 GMT) when the preliminary estimate for the first Quarter is released, and expected to show a slower 0.4% pace of growth compared to the previous period but an elevated 2.2% increase year-on-year (that is compared to Q1 in 2016).
