Pound sterling to Indian rupee prediction: Support test emerges after RBI slashes liquidity surplus

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Pound Sterling vs rupee down 0.52% today

Highlights

The Reserve Bank of India reduced banking system liquidity surplus from 11.16 trillion rupees to 4.92 trillion rupees using bond sales, FX swaps, and rupee defence measures.
Persistent RBI foreign currency interventions and declining crude prices have kept the rupee stable and driven recent gains against the US dollar.
GBP/INR trades below short- and medium-term moving averages with bearish momentum indicators; next 2 to 3 days expected range is ₹126.242 to ₹127.51, with downside probability very high.

RBI liquidity actions stabilize rupee amid FX and oil-driven gains

On September 22, the Reserve Bank of India reduced India's banking system liquidity surplus by more than half, from 11.16 trillion rupees to 4.92 trillion rupees, through bond sales, foreign exchange swaps, and targeted rupee defence, according to Bfsi Economictimes Indiatimes. This significant action has tightened domestic liquidity and directly supported rupee stability against foreign currencies. Other factors include ongoing RBI interventions in the FX market and a hawkish tilt by the Bank of England, which have preserved range-bound conditions in the GBP/INR pair. A series of rupee gains against the US dollar, driven by lower crude prices and RBI dollar sales via state-run banks, as reported by Business Standard, has also contributed to the current currency dynamics.

Oversold momentum persists as GBP/INR faces multi-level resistance

GBP/INR remains below both the MA-20 (₹127.322) and MA-50 (₹127.663), with the MA-200 (₹126.72) providing underlying support on the daily chart. The Ichimoku Kijun at ₹127.308 marks immediate resistance, while support is close to the lower bound of the current range. MACD and ADX continue to register sell signals, and RSI stands at 30.088, signalling oversold conditions. Stoch RSI and CCI further confirm oversold momentum, yet Bull/Bear Power remains negative, indicating that sellers are still dominant in intraday action. The Awesome Oscillator is neutral and does not indicate any imminent reversal.

Sideways movement expected as downside risks eclipse breakout odds

Over the next two to three trading days, GBP/INR is likely to oscillate within the typical volatility band of ₹126.242 to ₹127.51. The probability of an upward breakout is very low, while the risk of additional downside remains elevated. The baseline scenario projects continued sideways movement inside this corridor. If the pair closes above immediate resistance at ₹127.308, a recovery to the upper band could materialize. Conversely, a drop below ₹126.242 would confirm renewed pressure and open the path for additional declines.

Anton Kharitonov, expert at Traders Union, sees GBP/INR as trapped between strong policy moves from the Reserve Bank of India and tepid pound momentum. He notes that technicals remain weak, with oversold readings failing to attract buyers for now. The risk of further declines persists as downside barriers are tested, while policy interventions underpin the rupee. "With no bullish confirmation above ₹127.308 and momentum fading, I remain cautious and would avoid aggressive long positions here."

Earlier, analysts noted that GBP/INR was experiencing persistent bearish pressure, with technical signals suggesting continued downside risks. The latest developments, including RBI interventions and oversold technical indicators, reinforce this outlook, making sustained action around the ₹126.72 support level crucial for traders monitoring potential breakdown or stabilization.

Source of Data: GBP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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