 Welcome to Tick Mill weekly market outlook for week commencing the 16th of March. The dollar index rallied strongly after a midweek reversal, largely on the back of deleveraging back into dollars triggered in part by a dislocation in the USD money markets. There are no real winners at this stage in terms of the COVID-19 pandemic, but many market watchers suspect that when the dust settles the dollar could end up lower. This assumes that the Fed responds to the dislocation with a 100 basis point rate cut on March 18th and restart some form of quantitative easing perhaps as much as $50 billion per month. This is an aggressive call but faced with zero lower bounds. There is no real point in the Fed hanging around. The week will start with a G7 video conference call on Monday. French President Emmanuel Macron seems to be showing some leadership here and will hope to coerce G7 partners into some sort of coordinated fiscal response. It's then clear where the US Congress is ready to play ball. However, President Trump wants a payroll tax freeze that could be worth up to $300 billion over a three month period. Perhaps one more targeted measures to support those most affected. Equity markets should stay pretty volatile through the week with the Dow currently expected to open down 900 points. However, we're likely to see a base built really in the equity markets until the COVID-19 cases starts plateau. This is earlier than expected to be around April time. So let's take a look at the Dow from a technical perspective. This big reversal that we saw from the target area that I highlighted in last week's review of this 94-50 area. We have since traded back through the yearly pivots at 97. We're now testing this resistance area at 98-50 to 99. If we don't see an early reversal in the markets here this week, I'm looking for the dollar index to actually challenge the current cycle high at 99.93. And ultimately the monthly descending trend line from the all-time highs here, which will bring us into around the 121.30 level. If we don't see a reaction here, then certainly I think the scope will move up to 101.50, 101.60, which is the 127.50 extension, and the yearly R2. So my key area is then watching, if we get an early reversal here, at the beginning of the week I'll look to re-engage the dollar on the short side. If we do trade higher, then my next area of interest is going to be this trend line. If we get a reversal from that area, certainly again I'd look to re-engage on the short side. If wherever we break out through this trend line then I want to play the momentum and trade this from the long side up to see a test of this 101.50 area. As we're talking about the dollar, let's check in with gold. Gold obviously, sorry, short reversal to the downside coinciding with the dollar reversal to the upside. We're now down testing projected, ascending trend line support at this 15-20 area. And this is going to be key now as we start the week. Our buyer is going to step in and defend this trend line. If they do, that would obviously coincide with the downside reversal in the dollar. Then we can be back up retesting highs and up towards potentially the ultimate upside target of this 17-40, 17-50 area. However, a failure to find support as Asia comes in, then I think we're down retesting the yearly pivot from above down towards this 14-50, 14-45 area. European Central Bank President Christine Lagarde's press conference did not help the euro. And these debt sustainability challenges are now very much in focus. However, market watches think it's with aggressive money printing from the Fed that can potentially support the euro nascent trend to the upside. As a new round in the global currency war starts to emerge. Beyond the G7 meetings, let's see what the euro group meeting of finance ministers also has to say on Monday. Italy has delivered the most fiscal stimulus so far, but Lagarde is going in European politicians into doing a lot more. And we have had rumblings out of Germany and France. So with the euro, similar scenario as with the dollar. If we can find some early support here at the beginning of the week, defend this one 10-50 area on a closing basis, then we could see the development of another leg higher to retest price cycle highs and ultimately see a move up to test this 15-50 area. If we don't find that support here, certainly if we trade sub 110, then I'm looking at an immediate retest of the lows down below 108. And if we don't catch a bid there in terms of a double bottom type pattern, and I think we can safely look down to potentially as low as 105-40, which again coincides with that dollar index breaking its trend line to the other side. Sterling's support stemming from the UK government budget announced was pretty short-lived last week, and Sterling has been one of the main losers in the G10 FX space. It looks as though the current account deficit is really starting to weigh on the currency. With the UK-EU scheduled trade talks for next week cancelled due to the coronavirus, the main driver for Sterling should be global sentiment. With the Fed likely to deliver a powerful 100 basis point cut as of next week's FO&C meeting, there's possibly a hint of quantitative easing. This could lead to a higher Sterling. However, should note that the move should be primarily driven by the possible US dollar weakness rather than Sterling's strength. Similar here with Sterling, if we can't catch a bid early in the week here, this 123 area, I'm looking for an immediate move to test bids below 122. A failure here opens the retest of $1,950, and then on, if we can't catch a bid at the $1,950 area, then I'm looking for a test of the post-Brexit loans. So really watching the action at the beginning of the week here, if we get some sort of sharp reversal or key reversal pattern early in the week, then I certainly would be interested in looking at some long positions in Sterling, but if that doesn't emerge, then I want to play the momentum and target a test of these $1,950 loans. One week, Dolly in volatility has traded up to 30%, perhaps higher than the great financial crisis. Monday's low of $1,050, triggered a lot of stops and came off to Japanese residents and bought about $40 billion worth of foreign bonds in the prior week. Here the suggestion is that semi-official institutions like the Government Pension Investment Fund or GPIF are aggressively buying foreign bond treasuries as a proxy for BOJ intervention. Mentioning the BOJ they meet on Thursday, it still has plenty of room to increase its JGB and ETF buying within its existing mandate, but may focus its attention on liquidity measures, as we'll hope that the government's $10 billion stimulus will buy some time. From a technical perspective, Dolly in saw that rapid reversal. We're now trading up to test the prior ascending trend line support as resistance, along with the monthly pivot $109 and just above there. Again, if we see some reversal patterns develop in this area, then I would look to re-engage Dolly in on the short side, looking on to me for a retest of these $101 lows. However, if we get some closes above $109.51, $110, then all bets are off really at that stage of the downside. And I'd be looking for a retest of $1,250, these prior cycle highs, and potentially trading much higher in the coming weeks. But first public call is going to be this $109, $109.50, and we'll see how the market responds there. We'll get some key reversal patterns and I'll look to do something on the short side. But again, sustained close through here, no reversal pattern, and I will try and play the momentum and target a retest of these prior highs. Disasterous week really for the Australian dollar down about just over 5%. It really wasn't only just a function of extra bearish risk sentiment, but also related to mounting speculation about quantum veezing from the Reserve Bank of Australia. Deputy Governor DeBell outlined the possible shape of what now appears in a never-to-move into an orthodox monetary policy, a BOJ-style bond-yielding target aiming to control the three-to-five-year segment of the curve. Such a prospect may indicate that the Australian dollar is bound to explore the 2008 lows at the $0.60 level in the coming weeks and months. This fiscal stimulus package deployed by the Australian governments if around 1% of GDP may not be enough to upset the significant downside risks to the economy, which should keep rate expectations depressed at least through the second quarter. In terms of data next week, we have employment data, which will be the key focus, but we will likely have limited effect compared to the impact of more equity volatility. If anything, another rise in employment may well endorse market expectations about QE package. Aggressive easing from the Fed may mitigate some of the downtrend in the Australian dollar. From a technical perspective, I'm looking for this test at the $0.60 level. We've got the yearly S3, monthly S3 coming in just above there. If we can catch a bid here at this level, then from a speculative perspective, I think longs in the Australian dollar to play for a correction could be attractive, but if we can't find a bid at this $0.60 level, the next stop from a technical perspective really would see us down in the mid-50s. So again, a couple of closes below the $0.60 level, play the momentum and target a move down to the mid-50s. But if we can find support here, get some decent bullish reversal patterns, then I'd look to put some speculative longs into the market. Slump in oil prices will likely have a pretty negative effect on the Canadian economy, which will already have to deal with the headwinds of the coronavirus. The self-calling Cority Prime Minister Justin Trudeau will unveil a fiscal response package soon, despite the parliament now being shut due to the virus. The BOC on Friday, late Friday, cuts another 50 basis points into meeting, looking to provide additional easing as one of the few central banks with the room to do so. From a technical perspective, any pullbacks really towards this $1.36 area should provide a buying opportunity to ultimately retest the $140 area en route potentially to the yearly R3 at $141.50. Any failure below $136 could suggest a false upside break and we could trade back into the mid-range down into the low $130s. And that concludes the weekly market outlook for week commencing the 17th of March.