EUR/INR trades flat as support pressure emerges near ₹105.2357 after RBI regulatory changes

Traders Union
All News
Currency
Euro vs rupee slides 0.73% today

Highlights

The Reserve Bank of India has imposed a 20% cash reserve requirement and tightened restrictions on rupee-denominated foreign exchange derivatives to dampen speculative trading and reduce volatility.
The Foreign Exchange Reserve Ratio increase to 20% in cash for larger rupee-related derivative transactions is expected to raise hedging costs for corporates, with further interventions possible if volatility continues.
EUR/INR remains under strong bearish pressure with persistent selling signals, trading below key moving averages and projected to range between ₹105.2357 and ₹106.3745 over the next 2 to 3 days.

Rupee stability sought through RBI curbs and rising hedging costs

The Reserve Bank of India has introduced several new measures aimed at stabilizing the rupee, including a broadened 20% cash reserve requirement for rupee-denominated foreign exchange derivatives and new restrictions to curb speculative trading, according to Business Standard. These steps are designed to make speculative positions in the rupee more costly and less accessible, reducing market-driven volatility and limiting abrupt moves in the exchange rate. The central bank also raised the Foreign Exchange Reserve Ratio to 20% in cash for larger rupee-involved derivative transactions, as reported by Cnbctv18, while Finance Minister Nirmala Sitharaman stated via Economictimes Indiatimes that further interventions may remain on the table if volatility persists, with corporate hedging costs also rising as a result of these regulatory adjustments.

Bearish momentum persists as technical barriers reinforce resistance

EUR/INR remains below the MA-20, MA-50, and MA-200, confirming ongoing resistance at all key moving average levels. The Ichimoku Kijun sits at ₹106.3271, acting as immediate resistance for the pair. Momentum indicators confirm bearish conditions: MACD and ADX point to persistent selling pressure, while RSI, Stoch RSI, and CCI show deep oversold levels. Bull/Bear Power signals that sellers remain dominant in intraday trading, and the Awesome Oscillator also confirms further downside momentum.

Downside bias prevails as reversal chances remain limited

In the near term, EUR/INR is expected to find support at ₹105.2357 and resistance at ₹106.3745. The probability of an upward move is very low, and a decline is more likely unless an upward reversal is triggered by unexpected developments. The baseline scenario calls for EUR/INR to remain rangebound within this volatility band. A break above ₹106.3271 would open the way for further gains, while a close below ₹105.2357 support may accelerate additional downside.

Viktoras Karapetjanc, expert at Traders Union, sees the RBI’s targeted regulatory steps as a solid move to limit rupee volatility and support macroeconomic stability. He believes tighter controls on speculative derivatives will help stabilize sentiment, even as EUR/INR tests key technical supports. Bearish momentum remains in play, but further downside may be contained if intervention continues. "Unless we see a break above ₹106.3271, I expect EUR/INR to stay rangebound with limited upside potential and reduced short-term volatility."

Previously it was reported that EUR/INR faced persistent selling pressure, resulting in a broadly bearish technical outlook. The latest analysis reinforces this view in the context of ongoing regulatory interventions by the Reserve Bank of India, making downside risk the predominant scenario while closely monitoring support at ₹105.2357 as a key level for further movement.

Source of Data: EUR Price Analysis by TU

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.