 Welcome to Tick Mill Weekly Market Outlook for weekmen seeing the 5th of October with me, Patrick Munley. The US, the president's positive COVID test, a little progress on a fourth stimulus package of undermined market confidence a little and provided the dollar with a little bit of support into the back end of last week. In the president's temporary absence, greater focus may fall on his vice president, Mike Pence, and the VP presidential debate which takes place in Salt Lake City on Wednesday. Joe Biden riding high in the opinion polls, Carmilla Harris' job will be to prevent Pence from scoring too many points. How will the dollar trade in light of these political developments? The early signs are that a big leap from the Democrats is seen as reducing the risk of a contested election, supporting risk assets and gently weighing on the dollar. Any Republican comeback could reverse this trend. Perhaps on the fourth stimulus package, this will be watched closely too. After the soft September jobs report, the focus in the week ahead switches back to the Federal Reserve. The highlights here will be a keynote speech from Fed Chair Jerome Powell at the NABE conference on Tuesday. Wednesday then sees the release of the minutes of the September FOMC meeting where the Fed implemented its policy shift to average inflation targeting. The story looks well priced in by the markets, but in light of the PCE deflator running at 1.4% year on year in September, the market may be more interested to hear about the conditions under which the Fed might tighten policy. Overall, however, expect more dubbish rhetoric from the Fed and the clarion call for fresh fiscal stimulus. Elsewhere the data cover is light, just ISM services and what should be a wide trade deficit. So from the technical perspective, the dollar index is currently trading above the new monthly pivot at 93.43 and this is sending trend line resistance. So we could see some consolidation here and as long as this level holds, I'm looking for a retest of these prior cycle highs towards 94.75 on route to a potential test of the 95.50 area before the next leg down may commence. Now however, if we do take a close below the 93.30, I've then be looking for a test of 92.70 on route to a retest of the lows at 91.83. In the eurozone, interest rates remain on the floor, pressured by excess liquidity, now over 3 trillion euros at ECB and faced with core eurozone inflation languishing at just 0.2% year over year. While the ECB acknowledges the inflation drop as temporary, these kind of inflation levels will still have the market expecting fresh stimulus from ECB come December. Thursday's release of the September 9th, 10th ECB minutes may therefore offer some insight into the ECB's thinking and the members' views on the strength of the euro. There will be a whole host of ECB speakers running from Tuesday through Thursday. The day to come to look like this week and the holiday in China until Friday may limit some of the recent positives emanating from that region, which have been helping to support the pro-cycle euro dollar. From a technical perspective, the euro dollar is looking to test the descending trend line resistance and the monthly pivot at 117.70 or 80 level. As this area holds, I'm looking for another leg lower to ultimately get a test of descending trend line support and the prior breakout levels at 114.96, 115 area before the next leg higher. Now, caveat here is again similar to the dollar story. If we can get a close above 118, a sustained close there, then I'd be looking for fresh impetus to the upside to retest these 120 highs on route to a test of 121. In terms of sterling, it's all about Brexit talks, approaching the de facto deadline for a deal. Sterling sensitivity to the UK-EU trade negotiations is rising, while its correlation to global factors is falling. The meeting between European Commission President Ursula von der Lyon and UK Prime Minister Johnson Saturday did little really in terms of bringing any new new information to the market, but the meeting at least I guess bringing no escalation intentions and hints that negotiations are to continue. This should be good enough to support the pound early in the week. While the outlook for sterling does not look negative for next week, markets continue to see the GBP payoff as asymmetric, skewed to larger losses should the trade negotiations fail versus limited gains should a light trade deal be agreed. This is because in market estimates they suggest no risk premium is currently built into the pound based on short-term financial fair value models. On the UK data front, August GDP and industrial and manufacturing production all released on Friday should have a limited impact on sterling. It's all about these UK-EU trade talks. From a technical perspective, looking for sterling dollar to hold this 128 area as it does, I'm looking for a test, a retest of this prior ascending timeline support to now act as resistance with this 130, 170, 131 area, the key pivot as we test the upside. If, however, we do see a breach of the 12770, 12760 area, then I'll be looking for a pretty quick retest of 12675 on route to ultimately test the 126 handle. The recent US yield curve mini-steepening, including US 10-year yields trading above 0.70 basis points, did not last long and only provided brief support to the dolly yen. Remember, where inflationary conviction to really ripple through the markets, then you would expect the Japanese yen to underperform on the process with the dolly yen staying supported on firmly US yields. Progress on the fourth economic stimulus plan will have a major say in this story. Equally, the dolly yen's reaction to the president's diagnosis has been relatively muted. Looking ahead, see little on the Japanese calendar to impact the dolly yen and the recent and slightly disappointing third quarter tankan results had little impact. I do think, however, that the dolly yen remains the vehicle to express US election risk and whether Republicans to find a way back in the polls or question the handover of power dolly yen could make a move back towards 104. So, from a technical perspective at the moment, I'm looking for the dolly yen to continue to consolidate in and around the monthly pivot here 105.35, 105 area. As we do so, we could see prices drift lower to ultimately retest this 104 before seeing something new upside. The key resistance area to be to stay focused on at the moment is the 106 handle. As we trade below there, further consolidation is likely in this pair. Finally, in Australia, speculation about a possible raid cut from the Reserve Bank of Australia has risen in the past few weeks and next week's RBA meeting will therefore be an important one. Don't expect a raid cut, although a shift to a more dovish rhetoric may be on the cards. Futures markets seem to be pricing in around a 68% chance of a cut at this meeting. So, the balance of risk for the Aussie is slightly tilted to the upside next week. Still, with a number of factors affecting global risk sentiment, possible new lockdowns, developments in the US stimulus bill, the impact of transquarantine on the presidential campaign, Belarus sanctions, the Aussie will not lack external drivers next week. From a technical perspective, look for the Aussie dollar to test descending trend line resistance and the prior ascending trend line support to potentially act as resistance in and around this zone between 72, 70 and 73 handle. Looking for bearish reversal patterns there to set the next leg of downside of the Aussie, ultimately looking for a test of the 69 handle. Only a sustained push back through the 73 level will reignite bullish sentiment here from where we could then be looking for a test of the pivotal 75 handle. That concludes the weekly market outlook for week commencing the 5th of October. Be sure to join me on Thursday at 1pm for live market analysis session and also look out this week and in the weeks ahead for two chart hits to be issued each day, one in the London session before 10am and one in the New York session in and around 2pm UK time. Thanks very much and I hope you have a great treating week ahead and I'll see you sometime next week. Thanks very much.