 Welcome traders to Tick Mail Weekly Market Outlook for week commencing the 2nd of August with me, Patrick Mullerley. After a week where the Fed made another step towards tapering and Chinese government's regulatory clampdown generated a risk-off wave that spread across Asian and global markets, one would have thought we would have seen a stronger dollar across the board, but in fact the dollar hosted one of its worst weeks of 2021 as it lost ground against all G10 currencies. Indeed, US real yields touched record lows, but real rent differentials have not proved to be a determining factor for FX moves since markets have turned more skeptical about the global recovery story. Main trigger for the dollar correction was Powell's post-FOMC press conference where he still sounded cautious about the recovery, but I doubt such comments, which were a mere reiteration of his recent rhetoric were enough to dent expectations that the Fed will soon, and potentially at the Jackson Hole symposium late August, announce the timeline for an asset purchase reduction, or enough to force a price out of rising expectations around a 2022 rate hike. Instead, the dollar correction appeared to be mostly a profit-taking event, with markets that had already priced in the extra bit of hawkishness at the July FOMC and cashed in on some of the long-dollar positions. In the week ahead, some key data for July will tell us what pace the US economy has continued to recover, but it's worth keeping an eye on debt-sealing discussions in Congress and the potential impact on the US money markets. Economists expect the ISM surveys to keep reporting strong demand, but once again highlight the constraint on the supply side. The other main release, obviously, is the July Jobs Report, which should see employment gains at around 900,000 according to estimates, which is largely in line with the broad consensus, and should underpin the notion that the labor market is on a solid recovery path. On balance next week's data flow should allow markets to cement their Fed's tapering expectations when combined with global recovery sentiment that remains mixed and the material risk of more equity shocks coming from China, which are likely to have already exacerbated portfolio outflows from emerging markets. I think it's too early to call for an end to the dollar's recent good momentum, and I think we could think about a pickup into this week. From a technical perspective, we've got a nice reversal on Friday from the S3 there and this projected internal ascending trade line support. If we can hold this 9170 as support, I still see the potential for this final leg up into the Equality Objective at 93.73. At this juncture to suggest or call an end to this current corrective phase, we'd have to be taking out the 91, pitchfork support there and that would open up a move to test the 89.40 lows again. But for now, if we can get some follow-through on Friday's reversal, still looking for this 93.73 test and potentially the yearly pivot there at 94.11. Moving on now to the Euro. The cautious Fed offered some helping hand, obviously, to the Euro and the subsequent dollar softness facilitated a pop in the Euro. However, upside looks limited. The cautious July FOMC meeting is now in the price and although the Fed doesn't appear to aim to disrupt markets, it will nonetheless be ahead of the ECB in terms of monetary policy normalization. In contrast, the conclusion of the ECB Straction Review does point towards a very cautious ECB that should keep the policy ultra-conversative for a prolonged period of time. From this perspective, high-than-expected Eurozone second quarter GDP and June Eurozone CPI didn't really affect the Euro much on Friday given that the dubbish ECB bias is very clear. Domestically, it's a very quiet week in Eurozone data front. Really, the only piece of data note will be June retail sales given on Wednesday. I don't think that'll have much impact on the Euro. So from a technical perspective, we traded up into the 119 resistance zone for a bit of profit-taking late Friday. If we can hold 118.30 of support, there's the potential for a broader correction to test descending trendline resistance before resistance up towards 120. However, if the pullback doesn't find support at the 118.20, 118.30, we still have a downside objective, a quality objective, versus the largest swing structure here at 116.30. So it's going to be pivotal that the Euro attempts to base above 118 if we're going to see another leg to the outside. Otherwise, we can anticipate a break at the cryolos and the 117 on route to that 116.30. In Japan, let's look at the Japanese Yen, take a look at what we're doing here. Dolly Yen has attempted to enter a more sustained downtrend and to consolidate below the 110 level around which the pair has been hovering really since early July. Record low real rates in the US and the waves of risk off generated by Beijing's regulatory clampdowns are indeed offering a broadly supported environment for the Yen, although the large majority of the moves in the pair are driven by the dollar dynamics. The Tokyo 2020 Olympics are heading into their final week, and despite the near total absence of crowds of events, there had not been any virus related interruptions so far. What is, however, an element of concern and may impact Japan's growth outlook is the flare-up in COVID cases in Tokyo. Let's see if this will start to have an impact on the Yen, which may struggle to hold on to recent gains in the week ahead if, as expected, the dollar stabilizes and solid US jobs data may fuel the recovery story. So from a technical perspective, as we hold 110.70 as resistance, I'm still looking to move down to test the approach objective at 108.58. Really at this stage, we'd have to get a close above that 110.70 to refocus on the upside objectives of 112 and then on to potentially 140. But for now, whilst we hold the low on 10.70, let's see how we trade at 108.58. Next, we'll take a look at Sterling, cable dollar here. All the focus next week will be on the August BOE meeting on Thursday. I don't expect any new guidance on the interest rate path and look really for a repeat of the prior language that significant progress is needed before stimulus is removed. A couple of members are likely to vote for an early end of QE, as this should not come as a surprise to markets and the guidance should be seen as neutral. The impact is probably going to be limited with Euro dollar stabilizing and the dollar experiencing some tentative progress. Sterling is likely to trade with a bit of weight at the beginning of the week here. So from a technical perspective, as we hold that 140 descending pitchfork resistance there, look for a move back to test 137.50 as potential support. Buyers do step in there, then we can really start to focus on the upside. But if we fail to find support at the 137.50, then we can certainly get another test of 135.80 on route to an ideal 134.95 before attempting to put in another leg to the upside. So really going to be key to see how we open up the week here. If we get some follow through to the downside, watch how we trade at 137.40, 137.50. And last but not least, down under in Australia, concerns about Beijing's regulatory clampdown. Well, if that wasn't enough to a nerve the overexposed Australian market, a plunge in iron ore prices put strong curbs on the Aussie's ability to cash in on the dollar weakness last week. Iron ore futures reverted to May's lows after China stepped up with more measures to curb steel production, which have included the imposition of tariffs on steel exports. Domestically, the focus will be on the Reserve Bank of Australia, August meeting, which is held on Tuesday. Look for policymakers in Sydney, a city that is about to spend the whole month of August in lockdown will not make any amendment to the current policy stance after the adjustments announced in early July. The jump in inflation to 3.8% in the second quarter should be dismissed as transitory. And the bank will likely wait for more indications from the labour market before reacting on the policy side. The recent spread of the Delta variant, which is triggering fresh restrictions in Australia, is likely another reason why the RVA should revert from sounding more hawkish or upbeat on the recovery of this meeting. It's key to note that from the US and Europe, only 14% of Australians are fully vaccinated, so don't think the RVA will be able to lift the Aussie next week. From a technical perspective, Aussie trade into the resistance highlights in the daily market outlooks at the 74th handle and we found fresh sellers coming into the close on Friday. I've been looking for follow-through early in the week to get a test down to the Pivotal 7270. If we don't find support there, then we can extend lower into the 71.33 zone and that will be a Pivotal test just below there at 70.92, which is sending pitch for target there. So we'll see if we get the follow-through early in the week and then we'll watch how we trade at 72.60s to see if we can try and base there and make another attempt at a correction. As always, trade us, plan the trade, trade the plan, most importantly manage your risk. Until next week, thanks very much.