 Welcome traders to a Tick Mill weekly market outlook for week commencing the 9th August with me, Patrick Nunnerly. So let's get started here with the dollar and I guess if there is one key takeaway in the current environment where dollar dynamics are not proving to be the primary driver for the broader effects space, local stories can continue to have more meaningful effects impact. After all, the dollar appears to have realigned with the Fed's focused pricing after having received some confirmation from the Fed Vice-Chair Richard Clarida that the bank is well on track to start to normalise policy rates. Additionally, doubts that the pace of the US recovery after the grim ISM manufacturing and ADP payroll figures were by and large set aside by a record ISM services read and a strong NFP reads. If indeed markets are now feeling more comfortable with the Fed's rate expectations priced into the dollar then the main highlight of next week will probably be the US CPI date for July. It may not have a strong FX impact even if the headline inflation inches higher. External factors should instead dictate the underlying narrative for FX. The spread of the delta variant is forcing countries with low vaccination rates to revert to strict containment measures. This is a theme that may keep us a drag on the already vulnerable risk sentiments in China and Asia, which ultimately offer a gently supported narrative to the safe haven effects for the dollar. From a technical perspective, we held the support zone at 91.80, we've extended to the upside as anticipated. Now looking for a test of monthly range resistance to 93.28 and then on to the ideal equality objective at 93.70. This is going to be a key test for the market. If sellers step back in here then we could look for a fifth wave extension to the downside ultimately looking for that test of 87.50. However, if we don't get the anticipated reaction at the equality objective in the yearly pivot there 94.11 then we could see a little bit more complex corrective price action develop. But for now, as I say, focus is on the upside and the test of 93.73 versus that 91.80 swing low. So to the euro zone and the euro, if what was implied in our dollar discussion just local stories are emerging as important drivers. The ECB's recently confirmed ultra-dubbish stance is not one of those stories that can come to the help of the euro. In addition, the spread of the delta variant may keep markets reluctant to unwind their defensive dollar trades in the week ahead. The lining here, which could limit the euro downside, is that widely vaccinated eurozone countries are still refraining from imposing new draconian restrictions despite the flare-up in cases. On the data side, the focus in the euro zone will be on the German ZEW survey. The expectation index of the survey may fall for a third consecutive month but the assessment of the current situation could continue to rise. Barring major surprises, the ZEW and considering there are no other major data released in the euro zone or any scheduled ECB speakers, we're going to look to the technicals here now as the driver for price action in the week ahead. And so what we've been looking for now is ultimately a test of the prior lows just above 117. It may see a bit of a bounce there as we do look for sellers to step back in to see one more leg to the downside to test the 116.28 equality objective versus this larger swing structure and from there we could see a more meaningful, certainly corrective phase in SEW for the euro. So key that we continue to hold below the 118.50 to set up that 116.30 test. Now over to Japan and the dollar yen chart, a strengthening in the U.S. economy economic sentiments in the second half of the week put curbs on the ability of the yen to benefit from any instability of the risk environment. And hence the dollar yen is back above 110 with that strong non-farm payrolls read. The release of inflation numbers in the U.S. will normally prove to be a potentially very impactful event for the dollar yen, but as highlighted previously we are suspecting really this month's release may have less effect implications while some further hits to risk sentiment as some countries reimpose virus containment measures should support the safe haven yen. Japan is facing its very own contagion crisis as the Olympic Games draw to a close. Today's Tokyo may continue to see record virus cases in the coming days and there is an increasing risk the government will have to adopt stricter containment rules in the coming weeks. In the week in terms of domestic stories that says that one could put a drag on the economic outlook for Japan and possibly put a limit on how much JPY can rally on unstable risk sentiment in the U.S. read yields. Indeed the yen could suffer on the emergence of a sell the Asia markets mentality driven by this coronavirus outbreaks that we are witnessing over there. From a TANIC perspective dollar yen I'm looking now for this to grind higher into an ending diagonal upside objective 112.30 this stage really only a loss of the trend line support here now 108.50 to 108.70 will concern this bullish view and suggest that we're going to extend lower to test the 107.50 support. Over in the UK this week was all about the Bank of England really last week so without the need to fully dissect the BOE statement the Bank of England really takes another small set towards tightening the main highlight and made a broadly unchanged cautiously optimistic tone was the announcement that the bank will start balance sheet reduction over the policy rates as it stands at 0.5% previously 1.5% the muted reaction is sterling was justified by the fact that this level of the bank rate should not be seen before the end of 2022 or early 2023. The week ahead sees the release of the UK growth numbers for the second quarter expect to see a strong possible 5% quarter over quarter read despite the high probability that the rebound in activity is paused in the summer months the release should fuel expectations that the British economy will back to pre-pandemic levels by year ends after the BOE likely sounded less alarmed than feared about the Delta variant spread as it inch closer to tapering and the UK government has continued to ease travel rules all informing the underlying now narrative really for sterling sterling from a technical perspective look for a pull back here now into the 13770 area I've been looking for bullish reversal patterns here to ultimately set long positions targeting a move up to the 14080 141 14080 pivotal resistance so you can get through there then we look for a retest of highs at this stage it would take a close below 13730 to refocus downside objectives and monthly range support down to 13550 area but for now looking for some support here and to see if we can get another leg higher and last but not least down under we take a look at the Aussie dollar the reserve bank of Australia meeting provided some time limited help to the Aussie which then quickly reverted to being driven by external factors despite having sounded as marginally hawkish surprise the LVA merely remained on track with its gradual tapering plans despite China related sentiments failing to deteriorate much further on the regulatory clampdown point of view iron ore has faced another sell-off as China's curbs on steel production kept raising concerns on the demand side iron ore has now lost a fifth of its value in the past three weeks let's see how much further iron ore prices were falling a week ahead that is likely to remain a key driver for the Aussie amid a lack of data catalysts Aussie also remains highly vulnerable signals that the delta variant spread may force new lockdowns in China on the domestic side RBA governor lo may signal how the recent flare-up in delta cases in Australia confirms the need for monetary policy stimulus as he testifies before a parliamentary committee from a technical perspective look for the Aussie dollar to lose the internal trend line here if we get a close through that so close back through 73 30 that should set up a test of the 72 70 and in extension if sellers really start stepping here then we can look for monthly range support and the 161 extension of this ab swing structure down to 71 23 but for now watch for a break of the support as the opportunity to set short positions and then checking the targets and also keeping an eye on momentum here as we could put in a base then for a more meaningful corrective pattern and that concludes the weekly market outlook for week commencing the 9th of august with me patrick manly as always traders plan the trade trade the plan most importantly manage your risk until next week thanks very much