India's economy has grown better than expected.

The Indian rupee appreciated beyond 83.4 rupees per US dollar. This strength is attributed to Narendra Modi of the BJP securing his position as Prime Minister for the third consecutive term. Meanwhile, investors are evaluating the current monetary policies, with expectations that the Reserve Bank of India (RBI) will maintain the interest rates. There are concerns, however, about whether India can continue to grow and attract foreign investment as effectively as before. Additionally, significant infrastructure development continues to pressure the fiscal status, potentially necessitating the Indian government to issue more government bonds.

India's economy expanded by 7.8% in Q1 2024, surpassing the forecasted 6.7% growth, indicating a robust economic growth trend and affirming India as the fastest-growing major economy in the world. This growth is led by the manufacturing sector, which expanded by 8.9%, followed by the construction sector at 8.7%.

Foreign exchange reserves held by the RBI have increased to $648.7 billion, driven by the continuous inflow of foreign currency due to strong growth and the integration of Indian assets into international funds, further boosting investor confidence. Additionally, the depreciation of the yuan, yen, and won has enhanced India's competitiveness in the global market.

S&P Global Ratings has revised India's sovereign credit outlook to 'Positive' from 'Stable,' maintaining the debt rating at BBB-. This reassessment is supported by strong growth, increased government spending potential, significant economic reforms, and critical infrastructure investments, all of which support long-term growth and enhance economic resilience, potentially improving the credit rating within the next 24 months.

The yield on India's 10-year government bonds stands at 7.01%, slightly increasing after the recent elections. India's rising financial costs in recent years have elevated credit risks associated with Indian bonds, potentially deterring foreign demand. However, RBI Governor Shaktikanta Das has hinted at a potential interest rate cut soon, signaling that the RBI might not wait for the Federal Reserve to cut rates first.

Techical analysis data (5H)

Resistance: 83.485, 83.535, 83.585

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 83.335 - 83.384 but cannot break the support at 83.384, you may set a TP at approximately 83.535 and SL at around 83.284 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 83.485 - 83.535, you may set a TP at approximately 83.585 and SL at around 83.335 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 83.485 - 83.535 but cannot break the resistance at 83.485, you may set a TP at approximately 83.335 and SL at around 83.585 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 83.335 - 83.384, you may set a TP at approximately 83.284 and SL at around 83.535 or according to your acceptable risk.

Pivot point June 7, 2024 08:45 PM. GMT+7