 Welcome, traders, to another Tick Mill weekly market outlook for a week, commencing the 26th of July with me, Patrick Mundley. Looking for the dollar to stay supported into Wednesday's FOMC meeting. Despite lockdown concerns, I'll swear in the world, fuelled by the Delta variant, expect the Fed will have to deal with the realities of above-trend growth and inflation, while it may not specify exactly when it's ready to taper. The toes should generally support the view that tapering should emerge in the fourth quarter of this year, with the possibility of a first hike coming in Q4 2022. US data this week will provide a first look at 2021 GDP growth, expected at 8-9% quarter over quarter annualised plus also June readings for personal consumption and the PCE deflator. In addition, we'll also see updates on durable goods orders, consumer confidence and new home sales. The week ahead will also see the IMF release an interim update on its world economic outlook. In April, the funds saw the world growing by 6% in 2021 and 4.4% in 2022. It will be interesting to see if the IMF downgrades China's forecast, much if us all. In April, the IMF had China growing at 8.4% in 2021 and 5.6% in 2022, with emerging market economies. Understandably, lagging in the vaccination race portfolio flows to EM have been in reverse over recent weeks, which is another factor why the dollar may stay supported in the near term. So from a technical perspective, key level was tested in a week at 92.50, by a step back in and was recalled above there. I'm looking for an extension to 93.73, a quota objective, and then the yearly pivot at 94.13. This stage really, only a loss of 91.50 would be of concern to the near term bullish thesis. In the Eurozone, it's a big week for Eurozone data, but the first look at second quarter GDP and the flash July CPI release on the former. The consensus expects a 1.5% quarter on quarter expansion as the Eurozone exits its technical recession. Reports for much stronger growth in third quarter are under a little pressure, however, as the Delta variant hits confidence. A pickup in Eurozone headline CPI to 2.1% year on year looks unlikely to move markets. This comes after the European Central Bank Policy Review, which shifted forward guidance such that the ECB will not consider raising rates until CPI is substantially at 2% over a 12 to 18 month forecast horizon. Finally, the ECB says CPI at 1.4% in 2023. Other data of note will be the July German EFO and also the Eurozone confidence surveys for July. German July PMI is actually held up quite well despite fears over supply chain disruptions. We'll also see European leaders discussing the emergency fiscal support plans, the recovery and resilience facility. Some of this money should be dispersed later this year, although Hungary's request for EU funds is running into delays given the stand-off with the EU over LGBTQ issues. So from a technical perspective, the Eurodollar continues to trade in this descending wedge. Whilst we hold below the 1.1850, look for a grind lower to certainly test the 1.1707 on route to an ideal equality objective at 1.1627 for a more meaningful correction than we put into place. We're at this stage, we need to see a close above 1.1975 to return to looking at upside objectives. Last Monday, it looked as though the Japanese yen would be one of the strongest currencies on the week as risk assets came under pressure and the Fed's tightening cycle was reprised lower. This proved a false start, however, as equity markets quickly reclaimed their losses. The coming week is big one for US earnings, with big tech heavyweights due to report. It still seems far too early in the cycle for equities to really turn substantially lower. Thus, the JPY will probably remain an underperformer. Locally, the focus will be on the start of the Olympics and whether it can proceed as planned during the pandemic. Clearly, the lack of spectators is a major loss of the Japanese economy, but a cheap exchange rate and a generally buoyant international manufacturing sector should keep Japan's export machine going. We'll get some insights on this from Monday's July PMI releases. From a technical perspective now, as we hold below 1.1072, we look for ultimately a test of 1.0858, which is the equality objective. Really at this stage, we need to see a close back through 1.111 to refocus on the upside targets of 1.1200 onto 1.3000 of the equality objective. Finally, down under in Australia, inflation could spike here and apply some pressures of the RVA. With risk sentiments remaining unstable, the Aussie has moved below the 74 level for the first time since late 2020, with a correction in iron ore prices also likely playing a role. Next week's main event in Australia is the release of second quarter inflation figures. Economists are looking for headline CPI to grow 3.5% year over year, which is marginally below market consensus. So far, the Reserve Bank of Australia has not budged, sticking to its dovish stance, despite many developed central banks having moved to the hawkish side. It is still likely that one high inflation reading won't be enough to generate a U-turn in the RVA's tone, as evidence that inflation pressures are more persistent will likely be needed. But there should still put some pressure on the RVA to start discussing an earlier start to the tightening cycle. Markets are only pricing at 40 basis points worth of tightening in Australia in the next two years. By comparison, the pricing in New Zealand, for example, is now for 100 basis points. So there's considerable room for markets to speculate on a hawkish tone in the RVA's language in the second half of 2021. From a technical perspective, whilst the Aussie dollar holds below 74.50 now, look for a move down to test 72.70. Really at this stage, we'd need to see a close back through 75 to start to think about a more meaningful correction to test 76 from below. And lastly, we will check in with Sterling here. It's almost overlooked Sterling. Sterling has been struggling due to both specific negative news on Sterling and the declining UREDI. Next week should offer no real changes with the July Firm seed meeting posing a downside risk to the low yields versus the dollar. Should the Fed drop some hints about Jackson Hole or tapering in September? On the Sterling side, UK clashes with the EU in trying to renegotiate the conditions of post Brexit trade in Northern Ireland should also tame any meaningful Sterling upside. It will be a very quiet week on the data front with limited spillover into Sterling. Really, we've only got July nationwide house prices on Wednesday and June consumer credit and June mortgage approvals both released on Thursday. So from a technical perspective, Sterling has recovered off those loans posted just above 1.3570 potential now that we trade up into the trend line resistance here, the internal trend line resistance of 1.3825. However, if we hold current levels at the start of the week, it could be that we roll over to retest the prior lows en route to this 1.3495 before getting a more meaningful corrective bounce in Sterling. And that concludes the weekly market outlook for week commencing the 26th of July. As always, traders, plan the trade, trade the plan. Most importantly, manage your risks. Until next time, thanks very much.