India's economy shows signs of slowing growth.

The Indian rupee has been continuously depreciating, even though the U.S. dollar faced downward pressure in March. Tight liquidity conditions and a slight slowdown in growth have led the Reserve Bank of India (RBI) to ease its control over the rupee. India's GDP grew by 6.5%, a sharp decline from 8.2% in Q4 of the previous year, raising concerns among investors about the country's growth trajectory. However, India's growth still surpasses that of major economies in the coming years. This slowdown aligns with the prolonged high interest rates and continued currency intervention to support the rupee, leading to tighter liquidity in India's financial system.

India’s inflation rate dropped to 3.62% year-on-year in February from 4.26% in the previous month. This marks the first time in six months that inflation has fallen below the RBI’s 4% target. The decline is in line with expectations that the Indian central bank may begin cutting interest rates and implementing measures to boost domestic economic liquidity. A closer look reveals that food inflation, which accounts for nearly half of the total inflation calculation, fell sharply to 3.75% from 5.97% in January, with prices of spices, eggs, and vegetables under pressure. Additionally, fuel and electricity prices are expected to continue declining.

India's services PMI declined slightly to 59 in February but still indicates expansion for the 43rd consecutive month. Growth in the services sector has been supported by improving domestic and international demand, with new orders rebounding and export sales increasing at the fastest rate in six months. Employment in the services sector grew at the fastest pace since 2005, while input cost inflation remained slightly above the long-term average, similar to January.

Meanwhile, India’s manufacturing PMI fell to 56.3, marking the slowest expansion since December 2023. However, the data still reflects strong operational capacity in the manufacturing sector, with output and new orders remaining high, driven by strong domestic and international demand. Employment levels remained above the long-term average, with companies expanding their workforce at a rapid pace. Producer price inflation declined for the third consecutive month, but firms still had to pass on higher labor costs to maintain business stability. Additionally, an overall survey found that more than one-third of firms expect higher output next year, reflecting continued demand growth.

India’s GDP grew by 6.2% year-on-year in Q4 2024, up from 5.6% in Q3 but slightly below the market expectation of 6.3%. This expansion reinforces India’s position as the fastest-growing economy in the G20, following a prolonged period of high energy and food prices. The growth was largely driven by personal consumption and government spending, while external demand also contributed to GDP, with exports surging by 10.4% and imports slowing by 1.1%. Furthermore, the central bank is expected to cut interest rates further this year, potentially boosting India’s economic growth once again.

Techical analysis data (5H)

Resistance: 86.862, 86.957, 87.007

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 86.667 - 86.717 but cannot break the support at 86.717, you may set a TP at approximately 86.957 and SL at around 86.572 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 86.862 - 86.957, you may set a TP at approximately 87.007 and SL at around 86.667 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 86.862 - 86.957 but cannot break the resistance at 86.862, you may set a TP at approximately 86.667 and SL at around 87.007 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 86.667 - 86.717, you may set a TP at approximately 86.572 and SL at around 86.957 or according to your acceptable risk.

Pivot point March 17, 2025 10:50 PM. GMT+7