Short GBP/INR, target 96.80, stop 100.75.
The sharp rally over the past month has taken GBP/INR into overbought territory compared with interest rate differentials, relative equity market strength and broader USD developments. This is consistent with FX technicals, with GBP/INR at or close to overbought levels on RSI and Bollinger bands. Over the slightly longer-term a current account deficit worth 5.5% of national income means the UK is more dependent on inflows of foreign capital than most other major economies. Meanwhile the Indian narrative remains positive, the C/A remains on a favourable path, real rates remain high and growth is relatively solid.