How RBI Policy Could Define Nifty’s Next Direction Today?
About Nifty and Why RBI Policy Days Change Market Behaviour
Nifty, as India’s benchmark index, becomes extremely sensitive on RBI policy days. Interest rate stance, liquidity commentary, and forward guidance directly influence institutional positioning, especially in banking, financials, and rate-sensitive sectors. As a result, intraday volatility on policy days tends to be sharper, faster, and often misleading in the initial phase.
Unlike regular trading sessions, policy-driven days demand patience and a level-based approach. The first reaction is rarely the final one. Markets often oscillate aggressively before choosing a clear direction only after the policy statement and commentary are fully digested.
The Nifty setup for 06/02/2026 reflects this delicate balance. Price is hovering close to key moving averages and important resistance levels, making today a decisive session from both an intraday and short-term trend perspective.
Current Price Structure and Moving Average Positioning
Nifty is currently trading near 25,642.80. On the intraday timeframe, the 20-hour EMA is placed at 25,612 and the 40-hour EMA at 25,507, indicating that price is marginally above short-term averages. This suggests mild stability but not strong bullish conviction.
On the daily timeframe, the 20-day EMA stands at 25,556 while the 40-day EMA is placed higher at 25,664. This configuration highlights a compression zone where price is caught between medium-term averages, often a precursor to directional expansion.
Such setups are common ahead of macro events. The market pauses, absorbs positioning, and then reacts decisively once clarity emerges.
Key Resistance Levels to Watch Before and After Policy
The immediate resistance band of 25,675 to 25,740 is the first intraday hurdle for Nifty. This zone has acted as a supply area where selling pressure has emerged in recent sessions.
Ahead of the RBI policy, this resistance zone is expected to cap upside attempts unless a strong positive trigger emerges. Price behavior around this band will provide early clues about market intent.
Above this, the level of 25,860 is far more significant. It acts as a short-term trend reversal resistance. A sustained move above this level would signal that buyers have regained control and that the market is willing to reprice higher after policy clarity.
Bearish Scenario: Why Sell-on-Rise Still Dominates Below Resistance
If, after the RBI policy, Nifty fails to show a positive follow-through and remains below the 25,675 to 25,740 resistance zone, the prevailing trend is likely to remain sell on rise. Such behavior would indicate that market participants are not confident enough to commit fresh capital at higher levels.
In this scenario, the first downside level to watch is the 25,550 to 25,450 support zone. This area has repeatedly attracted buying interest and acts as an important short-term demand pocket.
A decisive break below this support band could accelerate selling pressure, pushing Nifty towards the next support cluster at 25,245 to 25,170. If sentiment deteriorates further, the deeper support near 24,940 comes into focus, indicating a broader corrective phase.
Bullish Scenario: What a Break Above 25,860 Would Signal
On the upside, a sustained move above 25,860 after the RBI policy would be a strong bullish signal. This level represents not just resistance, but a shift in market psychology from caution to acceptance.
A breakout above this zone is likely to trigger short covering, especially from traders who have been positioned defensively ahead of the policy. Such short covering moves are often fast and sharp.
Once above 25,860, Nifty may attempt a move towards the 25,910 to 26,000 zone. This region carries psychological importance due to the round-number effect and may witness profit booking or consolidation after an initial spike.
Why Policy Days Often Create False Moves
RBI policy days are known for creating false breakouts and breakdowns in the initial reaction. Algo-driven trades, headline-based reactions, and emotional positioning often distort price action before the true trend emerges.
Experienced traders typically wait for post-policy confirmation, allowing the market to reveal its hand. This reduces the probability of getting trapped in whipsaw moves.
Respecting key levels and avoiding aggressive trades during the announcement window often proves more profitable than chasing the first candle.
On RBI policy days where volatility dominates sentiment, traders who prefer disciplined, level-based strategies often align with: 👉 Nifty Tip | BankNifty Tip
Intraday Versus Positional View for Today
Intraday traders should focus purely on how Nifty behaves around the 25,675 to 25,740 resistance and the 25,550 support post-policy. These zones will define whether momentum favors sellers or buyers.
Positional traders, meanwhile, should observe the closing price relative to 25,860. A close above this level improves the probability of a trend shift, while repeated rejection reinforces the sell-on-rise structure.
Risk Management Is Non-Negotiable Today
The biggest mistake on policy days is overconfidence. Wide candles and fast moves can tempt traders into oversized positions. However, disciplined position sizing and predefined invalidation levels are critical.
Trades taken without clarity often result in emotional exits. On days like today, capital preservation is as important as opportunity capture.
Investor Takeaway
For 06/02/2026, Nifty stands at a decisive junction ahead of the RBI policy. The resistance zone of 25,675 to 25,740 and the trend reversal level at 25,860 will determine whether the index remains in a sell-on-rise phase or transitions into a short-covering rally. Failure to sustain above resistance may drag Nifty back towards 25,550 and lower supports, while a breakout above 25,860 could open the path towards 25,910 to 26,000. As Gulshan Khera emphasizes, policy days reward patience, discipline, and respect for levels rather than aggressive prediction.
Readers seeking structured, rule-based market insights can explore more analysis at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
