 Welcome to Tick Mill Weekly Market Outlook for week commencing the 3rd of February with me, Patrick Munnerley. Most of the attention in the US will be on payrolls data, which is due for release Friday. Market expectations are that gains should remain solidly around the 150k consensus level, while wage growth could inch up to potentially near 3% year over year. ISN surveys should also come in as expected, and signs are that manufacturing has bottomed while the service sector is holding up well. All in all, next week's data should start denting expectations around FedEasing, while the coronavirus slurry may be unpredictable and will keep fueling safe haven demand. Also, the democratic primaries are set to kick off with the votes in Iowa. State only awards a total of 49 delegates, so the caucus will be more important in timing than in size. Biden and Sanders appear to be tied in the polls, which however have to deal with high number of undecided voters, which leaves a wide margin for surprise. Markets will likely look at the caucus in an attempt to gauge the different candidates' momentum, but for now the implication for risk assets may be somewhat limited. From a technical perspective, the dollar index traded up into our resistance zone just above the 98 level. Sellers stepped in, and we are now closing out last week at the lows. I'm now looking for a test of the yearly pivot from above down towards this 97 level. A breach below 97 would be a bearish development, hoping to move down to test the 96-60 area as the next level of support. However, if we do hold another test of the yearly pivot from above, then we can anticipate a move higher to retest last week's highs at the 98-18 level. Whilst we are checking in with the dollar, let's quickly check in and see where gold's trading. Gold appears to be replicating the similar price pattern that we witnessed in last summer. We've broken out to the upside and we've been consolidating with an upside bias, now looking for a potential test up towards that 1600 level. Any pullback and subsequent bullish reversal patterns would offer buying opportunity, targeting a move up to test 16-25, but ultimately now we would be setting our sights at the ascending trend line resistance up towards the 16-90 level. We're only really negating this bullish bias if we saw a close back below 15-30. The calendar in the Eurozone is not particularly inspiring next week. Most of the focus will likely be on a few scheduled speeches by ECB officials. President Lagarde is due to attend two events on Monday and Wednesday, but most attention will be on the remarks before the Committee on Economy and Monetary Affairs. At this stage, most of the focus is likely to remain on any comments around the ECB strategic review, given the lack of indication of any imminent change in a monetary policy stance. From a technical perspective, the Eurodollar reversed from our target support area this week and we saw follow-through buying into Friday's close. We're now up testing descending trend line resistance and we could see some consolidation here at the beginning of the week. However, if we can get a close above 111, that will encourage bulls to target a test back up towards the 112 level. However, if we fail to break the descending trend line resistance, look for a further pullback to retest bids back down towards last week's low at 110. Whilst we're looking at the Euro, let's check in with the DAX. The DAX has traded down significantly from our upside target at the 13,658 level and we're now down testing support at the 12,860 level. A close below the median line here of the channel at 12,760 would be a bearish development, opening a retest of the yearly pivot from above down towards 12,327. Caution is obviously warranted with the Chinese markets coming back online after the Lunar New Year holiday and their first chance to react to the coronavirus. If we can find support at the 12,800, look for a move back up to test 13,400, where are we going to anticipate some resistance and the potential for a bigger head and shoulders pattern to emerge. At this stage, look ultimately for a move down to test 12,315, the yearly pivot from above. The UK has officially extended the EU and markets have already moved on really and they're focused to what lies ahead for the UK, which is the bumpy road now to striking a trade deal with the EU and other countries. And certainly around this topic appears elevated and this may keep the upside for the GBP broadly limited curbing the currencies momentum after the hawkish hold by the BOE last week. On the back of such uncertainty the market should continue pricing in a probability of a cut in the second half of the year. Obviously the BOE revised both the GDP and CPI outlooks lower. Now we did see month-end buying in the sterling pound as we held the ascending trend line support. And now if we can get a close above the 132.30 area we could look for a move up to test resistance at 134 and then on towards the post election spike highs of the 135.16. However if we fail to get a close back above the 132.30 area then we can continue to see range trade between the 130 and 132 handle. Japanese yen implied options volatilities look pretty low at the moment in light of the risk stemming from the coronavirus and given the Japanese yen's position as a strong hedge against equity risk plus no exposure to commodity exports markets expect the Japanese yen to remain in demand and would expect equities to have a difficult open to the week as I mentioned the Chinese stock exchange reopens on Monday and can potentially drag down global bosses so for now the dolly end is going to trade into some pivotal support here with this 108 handle being the key level to watch at the beginning of the week. If we breach the 108 then we should look for a move down to test the 106.50 support area. However if we do hold 108 to support then there's potential for us to trade back up and test resistance up to 109.60 level the Australian dollar ended its worst week since last summer and heads into another crucial week really with the RBA meeting on Tuesday and markets have recently slashed their expectations for a cut from almost 60% of the plie probability to currently 17% in only 10 days. Two key drivers of such repricing have been a reduction in the unemployment rate and an advancement in inflation knows however that the increase in employment has only been driven by part-time workers while full-time hiring was actually flat inflation has been close to 2% but remains far from central bank's midpoint of 2.5 target with the bushfire emergency as well as concerns related to the coronavirus and its impacts on the Chinese economy. It's likely that the Australian economic outlook should convince the RBA to lower the cash rate by 25 basis points this week. Alternatively a hold should still probably be characterized by a more dovish tone hence suggesting an imminent rate cuts given that the implied probability for a cut is very low. Marks to expect the downside potential for the Australian dollar could be significant especially if the coronavirus story keeps the market in a risk-off mood. From a technical perspective we're testing some pivotal support here down towards this 66-60-66-50 area. If we breach this on a closing basis we look then for a quick move down to test 65-70 and then ultimately down to the yearly S2 pivot down at 63-68 so this can be a key week here for the Australian dollar if we can hold this yearly S1 pivot and this descending trend line support going back to 2016 then there's a chance we can recover and see a move back up to test offers towards the 68 level. The major focus for the Canadian dollar next week is going to be the labour report. The jobs market is indeed under scrutiny after the Bank of Canada with its dovish message from its last meeting acknowledged that job creation has slowed. Marks to expect their payroll change to have the plus sign but possibly quite a low figure and employment may tick up and wage growth may edge lower. All in all markets expect the labour market will lose momentum along with the whole economy. Also keep an eye on POC Deputy Governor Wilkins speech which might shed some light on the fresh dovish tone of the central bank. From a technical perspective the Canadian dollar is testing internal trend line resistance here at the 132.50 area also trading just above the yearly pivot. If we see a rejection from these from this resistance area then look for a move back down to test the 131 support however if we're going to close above this trend line resistance 132.50 look for a quick move up to test major descending trend line resistance at 133.90 to 134 within yearly R1 pivot just above the 134.49. That concludes the weekly market outlook for week commencing February 3rd.