 Welcome to Tick-Mail's weekly market outlook for week commencing the 7th of June with me, Patrick Mumling. Friday's slightly soft and expected U.S. May employment numbers stand to set the tone for the week ahead. This provides the excuse for the Fed to say that substantial progress towards its goals have not been achieved and to defer the tapering debate a little longer. All will be revealed at the June 16th FOMC meeting. Before that, however, this week sees the May U.S. CPI release. Expect headline and call to jump to 4.3% year-on-year respectively. This may well be the peak in year-over-year rates, however, as peak base and bottleneck effects might be seen in these figures. Last month, FX and rates markets looked through the jump in inflation and I suspect the same may be true this month. In effect, the combination of higher U.S. inflation and a Fed prepared to do little about it is a negative environment for the dollar. Assuming dollar bears can pass through Super Thursday of U.S. CPI and the ECB policy decision unscathed, the dollar could stay gently offered into the major risk event of the month, which is the FOMC decision. The week ahead also sees the G7 summit in Cornwall, Chinese trade data and what could be another 50 basis point front-loaded hike from the central bank of Russia on Friday. From a technical perspective, the dollar index remains below the 91-pixel resistance area, as it does look for a break of the 8950 to set up a test of the 8874 area, which is monthly range support. From there, we could see some back and filling and look for a move to test trendline resistance at the 9109. However, if we don't find support at the 8870, then look for a move down to the long-waited test of the 8750 area. The highlights of the week for the euro will be Thursday's ECB meeting, the main objective of the day being to avoid taper talk. Rates markets have backed away from the idea that the ECB will slow down PEP purchases, potentially meaning there is little downside for the euro from this meeting. Yes, the ECB will not want to do anything to encourage a stronger euro, yet it seems hard for them to adopt any more of a dovish position than they already have. This week also sees German ZEW investor expectations, as well as the German industrial production for April. In reality, the trade-weighted euro has not moved much for the last 10 months, and it seems hard for policymakers to express too much concern over a stronger euro right now. The continued opening up of the European economy and another leg higher in European bomb yields and demand for European equities seems on the cards. So from a technical perspective, the euro dollar, whilst we hold 121 as support, we look for a move through the price at 122.60 on towards monthly range resistance at 123.88. From there, unexpected little back-and-filling, especially if we have continued momentum divergence. However, if we fail at the 121 support, then look for a quick move to test monthly range support down to 119.80 and the prior trend line resistance at 120. With the uninspiring May US employment figures giving the Fed an excuse to be patient, the subsequent soft USD dynamics have driven deeply negative front-reel rates, likely to further underscore by next week's US May CPI. This should keep pressure on the upside for sterling. I don't think concerns whether the full restriction easing is delivered by the June 21st deadline will weigh too much on sterling. Even if the day is postponed and there's talk about it being July 5th, the impact on economic activity should be limited. On the UK data front, the main focus will be on April UK GDP delivered on Friday. The reopening of shots and outdoor hospitality in April will, and surprisingly, lead to another decent month of growth, reiterated by the positive UK economic outlook and supportive of sterling. Focus will also be on April industrial and manufacturing production also released on Friday. So as sterling holds the monthly pivot support at 140.70, look for a move through the prior cycle highs at 140.240 to test resistance up to 140.340. Again, as we still have significant momentum divergence, I would look for a bit of back and filling from there, potentially to move down to test trend line support back to 41.35 before we set up for another leg higher. From the downside perspective, really, it's going to take a loss of the 140.70 to test trend line support back to 140.17. If we got through there, then I'd be looking for a move to test monthly range support down to 138.20. But for now, focus seems to be on the upside. In terms of the dollar yen, other than the expected US employment gains and the five basis points decline in US Treasury yields, some steam has been taken out of the dollar yen rally on Friday. It's hard to see the US yields going an awful lot lower from here, suggesting that it's dangerous to chase dollar yen down here through the 109. They really require a significant catalyst. One such catalyst could be a re-rating of Japanese growth prospects as Japan belatedly ramps up its vaccination campaign. That does seem to be the case over the last month. There has also been a report that PM Suga could call a snap election this autumn once the Tokyo Olympics and Paralympics have concluded. Such a call could be accompanied by an extra budget and prompt re-rating of Japanese equities and the yen, which is not out of the question in a world where investors are chasing the next growth story. Also this week, look out for the Biden-Suga bilateral at the G7 and Japan's April balance of payments data. So from a technical perspective, dollar yen continues to cling on to trend line support just above 109. If we do fail through there, then I'd look for a quick test down to the 10850 on the downside. However, if we continue to hold the 10930 as support, then we look for a move up to test range resistance at 111.18. And lastly, in terms of Australia, their stabilization in iron ore prices after a tumultuous month of May is limiting Aussie downside. In a week where the Reserve Bank of Australia didn't deliver any surprise at its policy meeting, first quarter GDP, however, came in stronger than expected at 1% year over year. The consensus was for 0.6%. This kept fueling the narrative that lower restrictions in Australia successfully limited the economic damage from the pandemic. With the exception of May's job numbers on June 17th, they aren't many key releases to watch ahead of the July RVA meeting when the bank will have to decide whether to roll out its yield curve control scheme to the November 2024 and whether to taper asset purchases. In light of this, the stronger GDP numbers will likely appoint in favour of the Hawks. Next week will be a very quiet week in Australia from a data perspective and external factors should dominate the price action. As the Aussie dollar continues to hold trend line support at the 76-30 area, look for a move through the monthly pivot now at 77-74 to test monthly range resistance at 78-16. Only a loss really of the support at 76-30 would set up a deeper corrective move to test monthly range support down to 75-50. And that concludes the weekly market outlook for week commencing the 7th of June. As always join me on Thursday for my live trade and market analysis session where I cover over 20 instruments in more detail. As always, plan to trade, trade the plan. Most importantly, manage your risk and have a great week.