 Welcome, Tredors, to another Tick Mill weekly market outlook for week commencing the 16th of January with me, Patrick Munnaby, starting in the U.S., obviously. U.S. markets are offline today for the Martin Luther King holiday, but the focus this week is really how the markets are going to start anticipating the Federal Reserve meeting for February, and whether or not, we are going to see a 25 basis point move or a 50 basis point move. After 425 basis points have raised like so far, there is a strong chance that it chooses to step down to the more traditional 25 basis point increments given most of the policy tightening work is already done, and there are broadening signs that the economy is responding to it. However, inflation remains well above that 2% target, and the labour market remains tight with unemployment rates back to a cycle low of 3.5%. If it does choose to go for a 25 basis point move, we can expect it to strongly state that this is not the end of the rate cycle and that a further 25 basis points in March would likely still be on the cards. This would leave the ceiling of the Fed Fund's target range at 5%, which most believe will mark the peak. In terms of data flow this week, an important influence on the decision. The data calendar includes retail sales, industrial production, housing transactions, and producer price inflation. The activity numbers are likely to be soft with retail sales dragged down by a big fall in auto sales in December, while squeezed household incomes and bad weather may also help to dampen spending. Industrial production is also likely to have fallen given the weakness that has been seen in key surveys such as the ISN Manufacturing Report whose production component fell into contraction sub 50 territory for the first time since May 2020. Some offset should come from the utility sub-component given much colder weather but lower oil prices may have weighed on mineral extraction. Inevitably, the housing market data will be weak given that mortgage rates have more than doubled over the past 12 months, making a property purchase even less affordable. Given the swing in the market from excess demand towards excess supply for the transactions will also be accompanied by lower home prices. Moving to the charts in terms of the technical setup, Dowder Index tested into that 101.50 level overnight. We've seen a bit of a bit come into the market as European traders have walked in here. Obviously, we've got reduced liquidity with US trading debts offline today. So what I'm ultimately looking for as well is prices are capped below 102.50. Looking for one more push down into this 101.20, 101 level to complete a sequence here, five way sequence to the downside. As long as we maintain momentum divergence here, I'm still looking for a three way corrected move to ultimately test up into the 104, which is a high volume note and then we have that descending trend channel resistance 104.50. At this stage, any loss of the 101 handle would be another bearish development hoping to move down towards a psychological 100 level. Now moving to the Eurozone, particularly light on data events this week for the single currency region. Tuesday, we get German ZEW Survey investment sentiment is likely to show further signs of improvement and hopes that inflation will fall are boosting the outlook while the equity market strong starts in 2023 will certainly be a buoy to morale in the region. Then heading into Thursday, we get the ECB policy accounts, transcripts and the minutes are expected to reveal discussions about the size and timing of future rate hikes as well as QT. Updated staff forecasts, lifted inflation projections and showed a shallow recession. ECB raise rates, slow pace at 75 basis points at the December meeting. From a technical perspective, looking for the Euro dollar to make one more push up into the 109 level from there similar, well the inverse set up really to the dollar index. As long as we maintain some momentum divergence, I'm anticipating that that test 109 to 10950 should complete this initial cycle. Then I'm looking for a three-way corrected move to develop and certainly I'll be thinking about move back into our current potential wave four low which would see us testing just below 105 and then from there we'll see a full step back into the upside. At this stage it would take a close through 10980 to open up further upside extension into the daily R3s up here, 11150 is the next upside objectives but like I say looking for a 109 test, maintain momentum divergence and get a pullback into that just below 105. Moving to the UK and in terms of data for this week, Tuesday we get jobs data, the BOE will look at this data through the lens of whether labour shortages are easing and whether wage pressures are still just as persistent as ever. So far the jobs market has shown few signs of deterioration other than a gradual reduction in the number of unfilled vacancies. We'll be watching for any hints of redundancies increasing as firms battle higher energy costs and interest rates. Though markets suspect these will remain low for the time being, meanwhile regular pay growth has been running at 7-8% on an annualised basis and that's consistent with recent readings coming from BOE's own decision maker survey. For now this is the strongest argument in favour of another 50 basis points rate hike at the next BOE meeting. On Wednesday we'll get headlines CPI which hopefully has peaked but it's likely to remain double digits through early 2023 but bank's favoured measure of core services inflation perhaps the cleanest gauge of domestically driven price pressures has aged higher in recent months and this will be key. The signs that this is reaching a peak would boost the case for a more modest rate hike in February. Round out the week on Friday with UK retail sales until November retail figures had risen by roughly 4% in value terms through 2022 but fallen by an even greater percentage in volumes. Neatly encapsulating the cost of living squeeze that's dominating the UK outlook so far this year. While fourth quarter GDP came in flat partly thanks to an artificial bounce in activity after the Queen's funeral bank holiday the first quarter output is like to show material decline. Thanks in part 2 we could retail numbers. Markets expect a small bounce back in December though that's likely to reflect volatility surrounding Christmas spending more than anything else. From a technical perspective Sterling we are looking for a move into this 123 handle just above 123 that represents 78.6% of the last decline and the 161 extension from our current swing cycle here so what I'm looking for is support to be maintained for now just above the 21, 21, 30 area and for price to extend into this 123 zone as long as you maintain momentum divergence they'll be watching for bearish reversal patterns to see a pullback and I'd be looking for something back into initially the 117 handle and then from there we'll see if balls are going to pick up the ball again and make a run up into this big weekly trend line resistance coming in at 1.2760s. At this stage it would really take the loss of 1.250 to suggest a deeper pullback which would have us down into the 120 handle. Okay moving to Japan and in terms of data we get on Wednesday November machine orders 5.4% print last time out strong start Q4 but volatility is likely to linger we'll also get November industrial production negative 0.1% and that's the final estimate and more importantly on Wednesday we would get this Bank of Japan meeting. Bank of Japan now is widely expected to stand pat after last month's shock decision to widen the New Yorker band. Governor Karoda's forward guidance is likely to remain dovish but inflation forecasts could be raised the market is pricing in additional normalization steps from the next governor who will be announced later this month and will take its first meeting in April. From a technical perspective the Dolly End tested a monthly projected range sport 1.2719 which is our target there putting a decent little bounce here I'm looking for any three-way moves back into the pivot and these prior swing lows 1.2950 sending trend line resistance 1.2980 watch for bearish reversal patterns there to engage on the short side and I'm looking for move down into this descending trend channel support looking at a test just above 1.25 at this stage really take a close back through 1.30 to suggest a deeper corrective move back up into the high volume load and the sending trend channel resistance coming in 1.3240s okay let's check in down under with the Australian data sheet for the week ahead and we are looking at a pretty scant data slate for Australia. Do you get consumer sentiments on Tuesday 80.3 finished 2022 at recessionary levels then heading into Thursday the main data point of note really for Australia this week is the employment change looking for a 20k print there did the unemployment rate to stay anchored around 3.4 percent the leading indicators have eased the touch but they remain consistent with trend employment and steady unemployment that's the only data of note down under so let's take a look at the charts in the technical setup the Australian has pulled back to test wedge support at the 6940s this area holds I'm looking for an extension to the upside target a test above the 70 handle from there I am looking for a pullback broadly in line with the idea that we get a dollar correction and actually we're on the Aussie so I've been looking for something uh in the line towards the 67 handle from there though I will be watching for bullish reversal patterns to engage on the long side I'm also looking at say a test of this weekly descending trend on resistance coming in just above the 73 handle as the next upside objective at this stage it would really take a loss of the 6850 to suggest correction it's already underway to move back into the high volume load 6680s and the same international sport 6640s last but not least let's check in with Bitcoin Bitcoin been on a bit of a tear well since the the start of this year really and we can see that we have this upside extension looking like it's impulsive so I'm looking for any callbacks now into the 20,300 area watch a bullish reversal patterns there to engage on the long side looking for a move up into 22,200 which broadly comes in line with the weekly trend line resistance here 22,360 so from there I'll be watching for three way corrected moves and then we'll see if this move is actually going to deliver further upside on the daily chart we could see the potential for an inverse head and shoulder scenario to develop some move back into this 18,300 would be the base there if we are going to extend higher in in Bitcoin otherwise if we hold the trend channel could easily back trading to that 17,000 level representing the high volume on the charts and that concludes the weekly market outlook for week commencing the 16th of January as always trade us plan the trade the plan most importantly enjoy this until next week thanks very much