No major moves for Euro vs Indian Rupee as RBI prioritizes inflation over rate hikes

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Euro vs Indian Rupee slides 0.53% today

Highlights

The Reserve Bank of India intervened with substantial dollar sales and a $5 billion swap auction to bolster rupee stability amid external pressures.
Persistent high oil prices and elevated U.S. yields continue to weigh on the rupee, with the central bank prioritizing inflation containment over aggressive interest rate defense.
EUR/INR remains in a narrow ₹109.30–₹111.35 range, with technicals signaling strong medium- and long-term bullish momentum despite short-term downward pressure.

Rupee stabilizes as RBI intervenes to counter external pressures

On May 21, the Reserve Bank of India undertook substantial pre-market intervention by deploying heavy dollar sales through state-run banks, directly increasing dollar liquidity and resulting in temporary rupee stability. This action accompanied the announcement of a $5 billion dollar-rupee swap auction with a three-year tenor, a measure aimed at injecting liquidity and containing currency volatility. Persistent external pressures on the rupee from sustained oil prices and high U.S. yields have continued to challenge the currency, while the central bank has emphasized inflation management over rate-focused defense strategies.

Technical resistance emerges as bullish momentum meets short-term pullback risk

EUR/INR is just below the SMA-20 at ₹111.5786, with the SMA-50 at ₹110.0013 and SMA-200 at ₹106.8054 offering lower support levels. The Ichimoku Kijun sits at ₹111.2261 as immediate resistance above spot. MACD (D1: Strong Buy) and ADX (D1: Buy, 34) underline robust bullish momentum on higher timeframes, but Stoch RSI indicates a sharp oversold condition and CCI remains neutral, supporting the likelihood of a short-term pullback. BBP at 0.3454 continues to reflect intraday buyer dominance during the session.

Price gains favored as aligned momentum indicators contain volatility

Over the next five sessions, EUR/INR is expected to remain within a narrow volatility band between ₹109.30 and ₹111.35. The probability of a price increase is very high (above 80%) due to aligned 'Buy' signals from weekly RSI, ADX, MACD, and the MA-50. The baseline scenario is for prices to stay confined within this corridor. A bullish breakout above ₹111.23 could pave the way for fresh 2026 highs, while a loss of support below ₹109.30 may result in broader downside, although this is currently considered less probable.

Viktoras Karapetjanc, analyst at Traders Union, sees robust institutional action supporting the rupee but notes persistent macro headwinds. He highlights that the Reserve Bank of India is intervening aggressively while holding back on rate hikes, prioritizing inflation control. Despite external challenges like high oil prices and U.S. yields, short-term positioning for EUR/INR favors buyers, with bullish technical signals aligning with sentiment. The analyst maintains a confident outlook as long as key supports hold. "As long as EUR/INR remains above ₹109.30, I expect the bullish bias to persist on the back of strong macro and technical momentum."

Earlier, analysts noted that Euro/Indian Rupee maintained a medium- to long-term bullish outlook supported by persistent upside momentum and favorable technical signals. The current environment, reinforced by robust weekly buy signals and recent central bank intervention, suggests traders should watch for a potential breakout above immediate resistance as a catalyst for renewed upside momentum.

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.