Stronger Forex Reserves Bolster RBI's Intervention Capacity
The Reserve Bank of India (RBI) has expanded its foreign currency reserves by $136.3 billion through special swap windows, significantly boosting its intervention capacity and reducing short-term volatility in the Euro to Indian Rupee rate.
This substantial increase in RBI's reserves has provided a stronger buffer to defend the rupee if needed, resulting in dampened short-term volatility in EUR/INR trading. The pair currently trades above its short- and long-term moving averages in a low-volatility environment.
The technical analysis indicates mixed momentum signals for EUR/INR, with overbought levels on some indicators suggesting potential for consolidation rather than significant gains. The expected price range for the next two to three trading days is ₹109.3598, ₹110.4588, with a marginally higher probability of an upward move (52%) versus a downside move (48%).