 Welcome to TickMail weekly market outlook for week-men's seeing the 9th of March with me, Patrick Munley. The global fight to safety looks set to continue, which should see core bond yields remain under pressure. Credit spread widened and we've recently seen the dollar lose its safe haven status. Working on the assumption that the equity markets remain under pressure for the remainder of March as traders monitor the growing spread of COVID-19 and reprice the global growth outlook. One of the key issues is how far the Fed will cut rates. The Fed won't want to be dragged into supporting the stock market on a frequent basis and will want fiscal stimulus to play its part. However, it will be hard for the Fed to under deliver on a 50 basis point of easing now priced for the 18th of March meeting, which should take the Fed's target range to 0.5 to 0.75%. That's not too far away from the Fed's lower bound and expectations of a fresh round of QE have started to weigh on the dollar. In theory, it's a blackout week for the Fed ahead of the March 18th meeting. But maybe a case that there are some hastily arranged congressional testimony for the Fed Chair Powell next week offering the Fed support. As we've seen the reaction to the non-farm payrolls data, markets are looking forward at equity markets and not backwards at activity or price data. So the NFIB, CPI and further Democratic primaries over the weekend are unlikely to play a key role in foreign exchange market pricing this week. Can expect the White House to be ready to offer assistance to the markets perhaps by reallocating some emergency FEMA funds should Congress commit that. From a technical perspective, the dollar has made a decisive and impulsive move lower from the double top discussed in prior analysis sessions. Now what I'm looking for is its price to find a reaction low, an initial reaction low, and then to see some type of corrective price action. I've overlaid a downsloping channel here now that I'm going to be tracking. I'll be looking for any bounces back into this 97 area to be the first area where I'd look to re-engage short positions. If we get through the 97, the line in the sun really for the bearish thesis at this stage will be up to 98, 20, 98, 50. As long as this area holds and I think we will see another leg lower ultimately in the dollar. If we hold the 97 on the initial test as resistance then I'm looking for a move down to test the pivot cluster and the projected descending lower parallel here down to 94, 50 as the as the next target on the downside. Whilst we're talking about the dollar, let's check in with gold. Gold has continued to track the price template as per last year's price action. I'm now looking for some consolidation here but ultimately we should see a pop hire to test the 1735 area as resistance and I'll be looking for bearish reversal patterns to merge here to initiate some short positions in gold. Looking for a move back to to retest 1630 support and then we will see what that means us. In the Eurozone, obviously the Euro has had its single biggest weekly jump since 2016. Largely as a result of surge in volatility triggering short covering and also now the view that the Fed might have to contemplate renewed quantitative easing. The week ahead we'll see focus on the ECB's response. It looks like ECB didn't want to play ball with the coordinated rate cut. Generally believing lower rates would do more harm than good. This puts it in a tricky spot for next week's ECB meeting. Marky watches think that it wants to avoid a rate cut and instead will be looking at more targeted measures to support corporate and small enterprise lending. Maybe a teltro targeting the corporate sector. The lack of a bazooka from the ECB may add to pessimism and risk assets and pressure on the Fed to do the heavy lifting with their easing. This should really keep a bid under the Euro. The data will probably not have as much bearing on the FX market next week. Instead I think the traders will be focusing on the politicians. Do they passively allow fiscal stimulus by suspending budget rules in a slowdown or actively pursue spending to fill a hole in domestic demand? From a technical perspective, like I say, we've seen this impossibly higher now in the Euro. I'm looking for a move up towards this 14-20-14-50 area to cap this initial advance and then I'll be looking for relatively shallow direction back into the 111-50-1-12 area. This is the prior descending trend line. As this acts as support then I'll be looking to re-engage the market on the long side, ultimately targeting a move up to 150-50 as the next upside objective for the Euro. Really at this stage, as long as even if we've got a deeper pull back to 110, as long as this area holds, then again I'd be comfortable stepping back in on the long side of the Euro dollar. But certainly this move looks impulsive and we should see a corrective, some corrective price action play out, but that will offer an opportunity to get back in on the long side in the Euro dollar. Cable trading back above 113. Really thanks to a combination of the week US dollar and a basic speculation around a Fed-style emergency cut by the Bank of England. Markets now seem quite comfortable with the idea that Andrew Bailey will deliver a 25 basis point cut. His first meeting as BIA Governor on the 26th of March. Next week, the real challenge for the Pound will be the release of the UK budget. After the Cabinet reshuffle in mid-February markets have put sizable hopes that the new Chancellor, Rishi Sunag, would have carried forward more aggressive fiscal stimulus. The spread of COVID-19 will be still relatively limited in the UK. He has triggered a fiscal response worldwide and the UK government will likely follow with some target measures to curb the impact of the virus on firms. Fiscal stimulus side may therefore be partly outshadowed by the budget release, providing sustained support for the Pound. The other key driver that we must be cognizant of for the longer term is the perspective for the UK-EU trade negotiations, which will probably weigh on the Pound in the coming months. From a technical perspective, as I highlighted in one of my charts over the days of last week, the sterling held the 127 support area. I'm now looking for a move up to test 132 to 132 80 area, this projected selling trend line resistance. Once again, I think once we trade up into this area we will see sellers emerge again and ultimately looking for another leg of downside to test into this 126 50 area. From there I see the potential for a more sustained recovery and sterling, but for now I'll be looking for bearish reversal patterns in around this 132, 132 50 and be targeting an absurdly retest of the 127 30 lows that we saw this week and ideally down to this corrective target at the 126 60. Japanese yen has reimbursed as a standard safe haven currency, largely as the proactive Fed has undermined the dollar. Not until the market sees the number of new COVID-19 cases plateauing or some really aggressive fiscal stimulus can we expect equity markets to find the floor at this stage. So with risk, asset staying under pressure for probably for most of March now the US, the for the dollar yen strong support should be seen as we test into the potential triple bottom here. Traditionally the Japanese Ministry of Finance would have instructed the Bank of Japan to intervene in the FX markets with the scale of the move we've seen but with the White House monitoring economies for currency manipulation we're probably not going to see an outright move by the BOG. Instead what's probably more likely is that the semi-official the GPIF may see value in unhedged US Treasury purchases under the 105 level which would achieve the same end as FX intervention and the BOJ is currently buying more assets they're buying JGBs and stock ETFs as part of its existing QQE scheme. So it doesn't look like they're looking to cut rates given that the local banking system is under pressure so I think that in this coming week any bounce we see from this this potential triple bottom here as highlighted in the chart so I'm looking at this support area 104.50 I think we could see a bounce here I want to see a big Keto reversal pattern set up but ultimately I think moves back into this 107.50 108 level will offer another selling opportunity I think once we come back down to retest this 104 area 104.50 for a fourth time I think it will give way then and we should see a move down probably looking to the psychological 100 level so looking for a bullish reaction on the initial test here below 105 but ultimately once we see a correction pattern play out this week I think there's a selling opportunity in the dollar so keeping an eye on that one in Australia 25 basis point breakup although I really failed to dampen the Australian dollar given the markets even more dovish expectations the bounce that we saw in equities didn't really translate into a material recovery in the Aussie and we're it's vulnerable really to more risk aversion and this really probably is going to be uh continues to be the key narrative for the week um you know shallow rebounds in equities unable to lift the Aussie which remains highly vulnerable to the downside there's no data releases on the calendar in Australia that's likely to have only material impact on on the Australian dollar or the RPA rate expectations in the coming week so it's going to really take you to leave from from risk sentiments what I'm looking for really at this stage we've managed to chew through the resistance here the descending trend line I'm now looking for a test these prior lows up to um up to this 67 handle I think we certainly will see some profit taking there and um and maybe some fresh sellers into the market and we'll see then when the momentum studies roll over can we make a a secondary low a secondary reaction low here at higher levels in the Australian dollar so I mean if we can hold the 65 6550 area then there's an opportunity I think for for another leg of upsides maybe we take out this 6750 resistance and take a look at 68 but if we don't find this secondary low so we don't get the bullish reversal patterns after the correction then I think we the Aussie is probably in trouble and we're going to take a look at a new low for the United States we've got this Pivot cluster down here at 6350 and I think if we do trade down to there uh watching for bullish reversal patterns I think we'll try another basing attempt but uh immediately there's a recovery looking at bearish reversal patterns at this 67 handle as a shorting opportunity uh the Canadian dollar was um was really the only g10 currency unable to outperform the dollar this week due to the combination of the bank of Canada the 50 basis point cut the lack of rebound in oil prices after OPEC plus cuts and the and the mixed labor data um it looks like there's there's probably still some room for uh some appreciation here market sentiment remains supportive um this doesn't bode ill for the Canadian dollar due to the currency's high beta but also it prompts markets to keep looking for Fed easing and therefore uh BOC easing on the lack of perceived coordination between the two central banks next week's calendar in Canada is mostly about housing data and should offer little inspiration when it comes to market impacts inevitably the Canadian dollar will will remain driven by the um the the expectations uh with respect to oil and the bank of Canada um from a technical perspective the uh we tested the resistance that I've highlighted in a um a chart of the week up here 134.50 we've consolidated but we haven't really rolled over and corrected as such um if we do see a pullback then I'm looking at this this 133 area the ascending trend line probably to act as supports at this stage on a third test and then I think we're probably going to test new highs um probably looking at this 136 area we've got this prior high 136.70 so I think we'd probably look at taking out the stops above there and then maybe we'll see a more sustained reverse or or sustained correction um in the Canadian dollar but if we do uh if we do pull back here and we take out this um this trend line support then I'll be looking at uh and move down to to test the yearly pivot from above at uh at 132 but at the moment I think uh we should be looking for this ascending trend line to support here at 133 30 area and then we should see a new high okay that uh that wraps up the weekly market outlook for the week commencing the 9th of March