Euro to Indian rupee outlook: Weak momentum signals limited rebound risks

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Euro vs rupee drops 0.6% to ₹105.4209

Highlights

The Indian rupee has strengthened due to renewed foreign capital inflows and improved equity market participation from institutional investors.
Reduced crude oil prices and a weaker US dollar have contributed to increased foreign demand and lower import costs for India.
EUR/INR trades below key moving averages with negative momentum signals, and is expected to remain in a ₹104.8938 to ₹105.948 range over the next 2 to 3 days.

Rupee demand rises amid foreign inflows and equity strength

The Indian rupee has recently gained support from a surge in foreign capital inflows and improved equity flows, which have increased demand for the currency, according to Bfsi Economictimes Indiatimes. Foreign institutional investors returning to Indian equities, in combination with a correction in crude oil prices and US dollar weakness, have further buoyed the rupee by enhancing foreign demand and lowering import costs. These developments have contributed to the recent firming of the rupee against the euro.

Bearish signals persist as oversold metrics test resistance

On the technical front, EUR/INR is trading below the MA-20, MA-50, and MA-200, with the Ichimoku Kijun level at ₹105.9764 acting as the immediate resistance. Momentum studies remain bearish, as both MACD and ADX indicate a continued downtrend, while price hovers near today's low. RSI, Stoch RSI, and CCI are all deep in the oversold zone, highlighting potential exhaustion; however, Bull/Bear Power remains negative and the Awesome Oscillator is in alignment with prevailing downside momentum.

Downside risk dominates as upside rebound probability fades

For the next 2 trading days, EUR/INR is expected to fluctuate within a volatility band of ₹104.8938 to ₹105.948. Short-term risk is tilted toward further downside continuation, while the probability of a rebound remains very low. If the pair maintains current levels, a period of sideways consolidation may emerge; however, a move above the Kijun resistance could prompt a corrective bounce, while a close below the lower range boundary would confirm the prevailing bearish momentum.

Anton Kharitonov, expert at Traders Union, sees the rupee’s resilience against the euro as the result of sustained foreign capital inflows and steady institutional demand. He notes persistent bearish momentum for EUR/INR on the technical side, with downside signals dominating. Kharitonov remains cautious given the lack of upward triggers and oversold conditions. "Until EUR/INR reclaims ₹105.9764 decisively, I see no case for a rebound here."

Earlier, analysts noted that persistent selling pressure was beginning to outweigh short-term resilience in EUR/INR, signaling a shift toward a more bearish outlook. With current momentum indicators and foreign capital trends reinforcing downside risk, traders should now monitor ₹104.8938 as a pivotal support level for potential further declines.

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.