INDIA: Country Wrap: S&P Positive on India Growth Outlook

• RES 4: 117.710 High Aug 5 and a key resistance    
• RES 3: 117.640 High Aug 7 
• RES 2: 117.528 50-day EMA 
• RES 1: 117.374 20-day EMA
• PRICE: 117.100 @ 05:50 BST Aug 19
• SUP 1: 116.950 Low Aug 15   
• SUP 2: 116.840 1.00 proj of the Jun 13 - Jul 11 - 22 price swing  
• SUP 3: 116.800 Low Mar 17 (cont) 
• SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)

A strong sell-off in Bobl futures last Friday highlights a bearish threat, once again. The contract is trading at the bottom-end of the recent range and has pierced support at 116.970, the Jul 25 low and a bear trigger. A clear breach of this level would set the scene for an extension towards 116.849, a Fibonacci projection. Key short-term resistance to watch is 117.528, the 50-day EMA.

• RES 4: 1.1851 High Sep 10 2021
• RES 3: 1.1829 High Jul 01 and the bull trigger 
• RES 2: 1.1789 High Jul 24 
• RES 1: 1.1730 High Aug 13
• PRICE: 1.1663 @ 06:02 BST Aug 19
• SUP 1: 1.1586 50-day EMA 
• SUP 2: 1.1392 Low Aug 1 and bear trigger 
• SUP 3: 1.1373 Low Jun 10 
• SUP 4: 1.1313 Low May 30 

EURUSD continues to trade at its latest highs and a short-term bullish outlook is intact. Moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. A continuation higher would expose key resistance and the bull trigger at 1.1829, the Jul 1 high. Clearance of this level would resume the uptrend. Support to watch lies at 1.1586, the 50-day EMA. Major support rests at 1.1392, the Aug 1 low.

JGB futures are weaker and hovering near session lows, -27 compared to settlement levels, after today’s 20-year supply.

• The 20-year JGB auction delivered mixed results across key metrics. The low price underperformed dealer forecasts, according to a Bloomberg poll. Moreover, the cover ratio declined to 3.0853 from 3.1462x in the previous auction. The auction tail did, however, shorten to 0.13 from 0.18.
• Today’s result came despite the 20-year offering an outright yield near its cycle high, 10bps above last month’s level. Moreover, the 10/20 yield curve remained near its recent high, its steepest since 1999.
• "JAPAN VETERAN LDP LAWMAKER KONO: BOJ MUST GRADUALLY RAISE INTEREST RATES AS IT IS UNDESIRABLE TO KEEP REAL BORROWING COSTS NEGATIVE FOR A LONG TIME. 'BETTER TO START EARLY,' WHEN ASKED HOW SOON BOJ SHOULD RESUME INTEREST RATE HIKES. JAPAN MUST REVERSE WEAK YEN, SEEK SOMEWHAT STRONGER YEN." - RTRS
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest losses.
• Cash JGBs are 1-3bps cheaper, with a steepening bias, across benchmarks. The benchmark 20-year yield is 2.4bps higher at 2.596% versus the cycle high of 2.655%.
• Swap rates are 1-2bps higher, with swap spreads tighter.
• Tomorrow, the local calendar will see Trade Balance, Core Machine Orders and Tokyo Condominiums for Sale data.