The Indian economy faces slowdown growth.

The Indian rupee weakened beyond 83.55 rupees per US dollar. This is attributed to strong labor data in the US, which has continuously strengthened the US dollar, putting pressure on other major currencies. Additionally, the RBI's reduced intervention in currency markets has supported the competitiveness of Indian exports. Meanwhile, investors are considering the impact on equity markets and exchange rates amid ongoing Indian elections. Preliminary forecasts of domestic economic data can also be anticipated.

India's Manufacturing PMI was 57.5 in May, down from 58.8 in the previous month. The declining PMI signals a slowdown in the country's manufacturing sector growth, although overall manufacturing activity continues to expand. New orders and production have only increased slightly. Companies have noted that reduced working hours due to extreme heat waves may impact current production volumes. Meanwhile, export orders have reached a 13-year high, driven by broad geographical demand.

The Services PMI fell to 60.4 in May from 61.4, marking the 34th consecutive month of expansion in service activities, albeit at a slower growth rate. New orders continued to rise rapidly, driven by improving economic conditions and increasing service demand, despite heightened market competition. Strong demand from Asia, Africa, Europe, the Middle East, and the US has contributed to this growth. However, cost pressures have intensified, with rising material and labor costs.

The Reserve Bank of India (RBI) maintained the interest rate at 6.5% during its June meeting, aligning with investor expectations, despite persistent inflationary pressures remaining within the 2-6% target range. The robust domestic economic growth led the RBI to keep the interest rate unchanged. RBI Governor Shaktikanta Das mentioned that weather and global economic uncertainties will continue to impact domestic inflation. Additionally, the weakened rupee could drive inflation up again, particularly with food inflation remaining high.

The RBI has adjusted its economic growth forecast for 2025 to 7.2%, driven by expected growth of 7.2% and 7.3% in the second and third quarters, respectively. The inflation rate is projected at 4.5%, considering the ongoing adverse weather conditions affecting the medium-term outlook.

Techical analysis data (5H)

Resistance: 83.536, 83.618, 83.658

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 83.374 - 83.414 but cannot break the support at 83.414, you may set a TP at approximately 83.618 and SL at around 83.292 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 83.536 - 83.618, you may set a TP at approximately 83.658 and SL at around 83.374 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 83.536 - 83.618 but cannot break the resistance at 83.536, you may set a TP at approximately 83.374 and SL at around 83.658 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 83.374 - 83.414, you may set a TP at approximately 83.292 and SL at around 83.618 or according to your acceptable risk.

Pivot point June 12, 2024 08:35 PM. GMT+7