INDONESIA: Country Wrap: CPI Continues to Rise in July

• RES 4: 1.3852 1.764 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 3: 1.3835 High Oct 20 2021
• RES 2: 1.3800 Round number resistance
• RES 1: 1.3789 High Jul 01
• PRICE: 1.3741 @ 06:09 BST Jul 2
• SUP 1: 1.3632/3586 High Jun 13 / 20-day EMA 
• SUP 2: 1.3439 50-day EMA
• SUP 3: 1.3338 Trendline support drawn from the Jan 13 low 
• SUP 4: 1.3140 Low May 12 and key support

A bull cycle in GBPUSD remains in play and a fresh cycle high Tuesday reinforces bullish conditions. This maintains the price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 1.3800 next. Initial support to watch lies at 1.3586, the 20-day EMA. A break would signal scope for a corrective pullback.

ACGBs (YM -4.0 & XM -2.5) are modestly weaker after trading in narrow ranges. 

• Cash US tsys are little changed in today's Asia-Pac session after yesterday's twist-flattener. Wednesday's US data focus is on MBA Mortgage Applications at 0700ET, Challenger Jobs at 0730ET followed by ADP Employment Change at 0815ET. No Fed scheduled Fed speakers. Thursday is a heavy data day with NFP added due to Independence Day holiday closure on Friday.
• Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at -11bps.
• Today’s Jun-35 auction showed solid pricing for ACGBs, with the weighted average yield coming in 0.45bps below prevailing mid-yields. However, the cover ratio nudged lower to 3.3625x. The AOFM plans to sell A$1000mn of the 2.25% 21 May 2028 bond on Friday.
• The bills strip has bear-flattened, with pricing -1 to -4.
• RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in July is given a 95% probability, with a cumulative 82bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Tomorrow, the local calendar will see Trade Balance and S&P Global Composite & Services PMIs.

• RES 4: 118.649 1.382 proj of the May 21 - Jun 3 - Jun 5 swing
• RES 3: 118.531 1.236 proj of the May 21 - Jun 3 - Jun 5 swing
• RES 2: 118.390 High Jun 13 and a bull trigger 
• RES 1: 118.065 61.8% retracement of the Jun 13 - 16 downleg   
• PRICE: 117.720 @ 05:48 BST Jul 2  
• SUP 1: 117.530 Low Jun 5 and a key near-term support 
• SUP 2: 117.470 Low May 21 
• SUP 3: 117.470 Low May 21
• SUP 4: 116.660 Low Mar 27       

Bobl futures are unchanged and continue to trade in a range. A bull cycle remains intact, however, the latest pullback has exposed key short-term support at 117.530, the Jun 5 low. Clearance of this level would highlight a stronger reversal and cancel the bull theme. This would open 117.470, the May 21 low. Key short-term resistance has been defined at 118.390, the Jun 13 high. A break of this price point would be a bullish development.