 Welcome to Tick Mail weekly market outlook for week menacing the 18th of January with me Patrick Munlow. Washington will be very much the focus of the world's attention next week as Joe Biden is inaugurated as the 46th US President on Wednesday. It would seem unlikely that we see a repeat of the civil unrest witnessed on Capitol Hill, but progress on impeachment proceedings may preoccupy the Senate at a time when the US economy looks like it needs more support. Washington on Tuesday will also see Janet Yellen's confirmation hearing as US Treasury Secretary. She may well be asked what she thinks about the dollar. Best guess would be that she would reply along the lines of believing in a strong dollar policy, but exchange rates should be best set by the market. Doubt the dollar rallies too much on many remarks from Yellen. US data for the week ahead will focus on housing, which is doing pretty well. And whether US initial claims show another unwelcome spike. In the background suspect the dollar bear trend is in a consolidation phase. Dollar Asia basket dropped or slowed, helped partially by a weaker Chinese arm fixing. And also by emerging complaints around the world over the pace of the dollar decline. Given flows into emerging markets have been a key driver of this benign dollar decline. China fourth quarter GDP released on Monday will also set the tone, as will only further signs of tighter monetary policy after a small liquidity drain by the People's Bank of China on Friday. So from the technical perspective, the dollar index is in a fourth wave corrected pattern at the moment. Versus the swing low at the 89-83 area, I'm looking for an equality test now into the 91-50 to 91-80 zone. Watch for bearish reversal patterns, short positions there, ultimately tugging and move down on this leg to test 87-50 as the primary downside objective. However, if we do take out the 92 level on a closing basis, then we could expect further consolidation higher to potentially test up towards the 93-94 zone. However, my base pattern that I'm tracking at the moment is for this correction to complete in the 91-50 to 91-80 area. European policymakers will take centre stage this week, a week which sees meetings of both the ECB, the European Central Bank and EU leaders for the ECB. The market expects not much from the December easing measures. However, we would expect President Lagarde to say that the ECB is monitoring the exchange rate carefully, whereof the euro's impact on an already subject inflation rates. The EU summit on Wednesday looks set to focus on a coordination of the vaccination rollout and also the implementation of the EU recovery fund. On the subject of politics, Monday will also see the market review the results of the CDU leadership contest in Germany. We're interested to see any conclusions reached by the European Commission in its report released Wednesday on improving the international role of the euro. For example, on the subject of pricing energy in euros. This is a structurally shoe which will probably take some time, but will likely have a strong support from those countries trying to find ways to extricate themselves from the dollar dominance. Wrapping up on going, Italian political certainty and a steady dollar could weigh on the euro this week. So, from a technical perspective, seeing an impulsive decline set in in the euro testing down below 121. As 1250 supports on an initial test, I look for a move back to retest 122's resistance and for another leg lower to complete an ABC corrected pattern to test bids down below 120 to 11950 and 11910 area. Watching the bullish reversal patterns there to set long positions targeting a retest the price cycle highs 123.47 on towards 124.50. Sterling has been the best performing G10 currency last week benefiting from the mix of one, the market repricing odds of the Bank of England moving into negative rate territory after Government Bay's comments earlier last week. Two, faster rollout of vaccination in the UK versus other major economies, certainly in the euro zone in the US. While the former is now in the price, the latter should continue to provide some marginal support to Sterling. On the UK data front, focus will be on Wednesday's December's CPI release, which is expected to increase modestly, yet staying well below the 2% target. On Friday we get December retail sales, also January PMI's. The latter two should improve versus the prior reading, but any effect on Sterling is probably going to be limited. Speech from Governor Bailey on Monday and the BOE chief economist Haldane on Tuesday are unlikely to affect Sterling too much as the market has already adjusted to the probability of negative rates. Sorry, has already adjusted the probability of negative rates lower versus last week's speeches. So, from a technical perspective, looking for Sterling to complete a corrective pattern versus the double top here at 137, I'm looking for a three-way correction move lower to ultimately test this ascending trend line support to the 134 area. I'm from there, I would anticipate that bulls look to re-engage to make a challenge on the 138.50 upside objective. Obviously, any breach of or loss of the trend line support would suggest a deeper correction is underway, and we could be looking down to this 132 area first. Dolley Inn has recently been one of the major beneficiaries of the steeper US yield curve. It's not clear that the US curve needs to see them more next week, certainly versus the proposed £1.9 trillion fiscal stimulus, which will be digested by the markets in more detail. This suggests that the Dolley Inn shouldn't really be trading through the 104.50 area, certainly with the dovish fed commentary, and lighter supply may be sufficient to keep the US treasury yield stable around current levels. In Japan, the highlight of the week will be Friday's BOJ meeting. Worsening COVID situation in Japan will no doubt be weighing on the BOJ's minds, as will deflation. No fresh easing is expected from the BOJ, and instead speculation is growing that the BOJ will scale back its ETF stop buying programme given the strength inequities and the BOJ's substantial ownership of the ETF sector. So, from a technical perspective, I'm looking for the Dolley Inn to correct lower to test the 103.30, 103.50 area, and then maybe we see an attempt on the descending trend line resistance coming in at that 104.50, but from there I'd certainly be watching for bearish reversal patterns, short positions, targeting a retest of last year's lows down to 101.20. Finally, down under in Australia last week, even given the Dolley's solid performance, the Aussies still managed to hold on to that 77 cents level, thanks to a lingering strength in iron ore prices, some positive spillover from the US stimulus hopes and signs of China possibly reallowing some Australian coal shipments at its ports. For the weak head, the main data point to watch is the December jobs report, and economists are looking for a slowdown in the employment recovery with the December increase in hiring, probably about 67,000 versus 90,000 last month. Whilst this is still a little pessimistic given consensus, which is since around 50K, almost half of the increase will be attributable to part-time hiring. This should simply confirm expectations for the RBA's lower for longer approach and have a short lived impact on the Australian dollar. The real key drivers data-wise for the Aussie next week, you could expect some potential spillover from China's growth data released early on Monday. From a technical perspective, the Australian dollar continued to find resistance at the 78 level, and as that level holds its resistance, I'm looking for a move down to test a sending trend line support down through the monthly pivot at 76 to around this 75 area, certainly looking bullish reversal patterns in this zone, set long positions, targets even move through the 78 and on towards the interim upside objective at the 80 level. As always traders, Thursday 1pm UK time, I will be reviewing charts, all the FX majors, indices, commodities, Bitcoin, and taking requests as well. So join me at 1pm on Thursday, if you can. That concludes the weekly market outlook for week commencing January 18th. Thanks very much and hope this helps.