Will EUR/INR hold above support amid ongoing Reserve Bank of India intervention?

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Euro vs rupee drops 0.56% today

Highlights

The Reserve Bank of India instructed state-run banks to offer dollars, providing support for the rupee and addressing market imbalances.
EUR/INR remains near record highs for the month, indicating persistent rupee weakness or substantial euro demand.
EUR/INR trades below major moving averages with mixed momentum signals, expected in a ₹105.485 to ₹106.5452 range and a higher probability of decline.

Rupee steadied by RBI dollar sales amid persistent euro demand

The Reserve Bank of India has intervened in the foreign exchange market by directing state-run banks to offer dollars, providing support to the rupee and aiming to ease demand-supply imbalances, according to Investing.com. This intervention mechanism helps moderate depreciation pressures on the INR and tempers the upward momentum in the EUR/INR pair. Despite these official measures, the pair has stayed near record highs earlier this month, indicating that underlying demand for euros or persistent rupee weakness remains in play.

Resistance at Kijun line as indicators diverge on momentum

On the technical front, EUR/INR currently faces immediate resistance at the Ichimoku Kijun level of ₹106.025. The pair is trading under the MA-20 at ₹106.4312, MA-50 at ₹106.2477, and is well below the long-term MA-200 at ₹109.442. Intraday signals are mixed—MACD suggests notable buy momentum, while ADX is neutral and Bull/Bear Power points to selling dominance. Oscillator readings from RSI at 45.41 (Sell), CCI in Oversold territory, and Stoch RSI also in Oversold highlight a market leaning toward short-term oversold conditions, though divergence among these indicators warrants caution.

Sideways action likely as breakout risks remain subdued

In the short term, EUR/INR is projected to consolidate within a price range of ₹105.485 to ₹106.5452 over the next two to three days. The baseline scenario is for continued sideways action within this band. Upside potential is capped, with just a 29% probability of an upward breakout above resistance near ₹106.025, whereas a move below ₹105.485 would suggest renewed selling. Overall, near-term market action is likely to remain muted as traders await clearer directional signals.

Viktoras Karapetjanc, expert at Traders Union, believes the Reserve Bank of India's intervention has managed to slow euro gains, but the rupee remains under pressure near record lows. He sees sentiment still favoring the euro as buyers take advantage of INR weakness, even as technicals warn of an overstretched market. Macro factors and central bank actions will continue to drive near-term direction. 'If macro stability improves and intervention persists, I expect the rupee to stabilize and EUR/INR to hold within its current range over the short term,' he says.

Earlier, analysts noted that EUR/INR was subject to persistent bearish momentum, with sellers maintaining control amid broad downside risks. The latest market developments—marked by central bank intervention and renewed technical divergence—underscore that traders should closely monitor the ₹105.485 support level as a potential pivot for the next directional move.

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.