India's economy has potential for long-term growth.

The Indian Rupee continues to weaken even as the US Dollar depreciates. Investors and analysts believe that the Reserve Bank of India (RBI) is unlikely to intervene in the currency market in the near term, aiming instead to support Indian exports in capturing a larger share of the global market. However, the RBI has already anticipated that inflation rates may rise in the coming months due to increasing import costs.

The RBI has maintained its interest rate at 6.5%, marking the ninth consecutive time it has held the rate steady. This decision aims to ensure that inflation falls to the target of 4%, while simultaneously supporting continuous economic growth. Most of the support remains focused on infrastructure development and financial backing to enhance business flexibility. Additionally, the RBI forecasts economic growth for 2024 and 2025 at 7.2%.

India's Manufacturing PMI fell to 57.9 in August, down slightly from 58.1 in the previous month, marking a further decline in growth since May. However, this figure remains above the long-term average, with the growth of new orders and export orders remaining stable. Meanwhile, employment growth is expected to continue through July, although production costs have risen slightly.

India's Services PMI rose slightly to 60.4 in August, indicating continuous growth in service sector activities and a significant recovery for various businesses. Production output increased rapidly, while new orders surged due to rising foreign demand, which is expected to continue to grow.

The inflation rate dropped sharply to 3.54% in July, down from 5.08% in the previous month, lower than the market's expectation of 3.65%. This rapid decline has a positive impact on the overall economy, primarily driven by a significant reduction in food and fuel prices, resulting in slightly lower production costs. Additionally, improved weather conditions have enabled farmers to increase output and reduce costs effectively.

The yield on India’s 10-year government bonds remains below 6.86%, the lowest in two years, due to expectations of a rate cut by the US Federal Reserve and the Indian government's supportive economic policies. This has led to an anticipated GDP growth of 8.2% in 2024 and has increased demand for other risk assets.

Techical analysis data (5H)

Resistance: 83.974, 83.985, 84.006

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 83.919 - 83.941 but cannot break the support at 83.941, you may set a TP at approximately 83.985 and SL at around 83.908 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 83.974 - 83.985, you may set a TP at approximately 84.006 and SL at around 83.9 25or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 83.974 - 83.985 but cannot break the resistance at 83.974, you may set a TP at approximately 83.919 and SL at around 84.006 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 83.919 - 83.941, you may set a TP at approximately 83.908 and SL at around 83.985 or according to your acceptable risk.

Pivot point August 28, 2024 07:58 PM. GMT+7