Flat trading for Euro vs Indian Rupee near ₹107.3335 support

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Euro vs Indian Rupee drops 0.54% today

Highlights

India announced tax exemptions for foreign portfolio investors and BIS on government securities to drive overseas bond inflows.
Reserve Bank of India eased foreign borrowing for public sector units and banks, aiming to strengthen INR liquidity and FX reserves.
EUR/INR faces strong downside momentum, with technicals signaling more selling pressure and a projected range of ₹109.9616–₹111.0668 over 2–3 days.

Foreign inflows rise as tax relief and regulatory easing boost rupee

On June 5, 2026, the Indian government announced an exemption on capital gains tax and withholding tax for foreign portfolio investors and the Bank for International Settlements investing in Indian government securities, aiming to reduce investment barriers through an ordinance amending the Income-tax Act. This measure is expected to increase foreign capital inflows, creating potential structural support for the Indian Rupee by attracting more overseas demand to Indian bonds. Complementing these steps, the Reserve Bank of India introduced new rules to ease foreign borrowing for public sector units and banks, which could further strengthen INR liquidity and foreign exchange reserves, though price action has remained under broader selling pressure.

Sustained selling emerges as EUR/INR approaches oversold territory

EUR/INR is trading below the MA-20 at ₹111.1465 and the MA-50 at ₹111.1826 on the h1 chart, while still holding above the MA-200 at ₹107.3335 on the D1 timeframe. The Ichimoku Kijun level at ₹111.0313 serves as immediate resistance. Momentum indicators remain negative: MACD and ADX show continued selling pressure; RSI stands at 33.769 with both Stoch RSI and CCI indicating oversold conditions. BBP also points to seller dominance, and the Awesome Oscillator aligns with the prevailing downtrend, confirming weak intraday sentiment.

Further downside risk dominates as range-bound trading persists

Over the next 2–3 days, EUR/INR is expected to trade within a typical volatility band of ₹109.9616 to ₹111.0668. The probability of a further downside move is high and the chance of an immediate reversal appears low. Consolidation is likely within this defined range; a bullish scenario would require a decisive break above the Kijun resistance and short-term moving averages, while a bearish scenario is signaled if the pair drops below support near the lower end of the forecast range.

Anton Kharitonov, expert at Traders Union, believes the recent tax exemption for foreign investors and supportive RBI measures reflect India’s intent to drive external demand for its government bonds. However, he sees no immediate technical turnaround for EUR/INR, with momentum and trend indicators confirming prevailing weakness. Sentiment stays negative despite fundamental tailwinds. "Until EUR/INR reclaims the short-term moving averages, any upside is likely to be short-lived."

Earlier, analysts noted that EUR/INR maintained a bullish outlook supported by regulatory actions favoring euro demand and sustained technical strength. The current shift in policy direction and negative momentum indicators now point to downside risk, making consolidation below short-term resistance a key scenario to monitor for potential further weakness in the euro against the rupee.

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.