 Welcome to Tick Mill weekly market outlook for week commencing the 7th of December, with me, Patrick Nunderley. Dollar continues to broadly decline, recently dropping through major sport levels against both European and Asian currencies. This pro-growth dollar decline needs to be fed by good news on growth and vaccines and a federal reserve is still prepared to keep rates on the floor. On the former, markets have been watching out for the progress of the $908 billion bipartisan stimulus bill in the US Senate. And also whether the Food and Drug Administration approves the Pfizer-Binotec vaccine when it meets on Thursday. Progress on both of these is good for risk assets and bad for the dollar. The US data calendar will be light after the non-farm payrolls release, though there will be focus on November's small business optimism, NFIB, November's CPI and the December University of Michigan data, including consumer sentiment and inflation expectations. Any pickup in the 5-10 year inflation expectations currently at about 2.5% suggests that the Fed has been successful with real US rates falling and the dollar bear trend should continue. So, from a technical perspective, the dollar index took out the key 9170 sport area, and we may have an interim low in place around this 9050 area. However, as any corrective moves are capped by the 9175, we now look for a move to test the primary downside objective at the psychological 90 level. From here, we could anticipate at least a minimum of a three-way correction back into the 92 zone, before ultimately trading lower to test the quality objective discussed in last week's weekly market analysis session at the 87 handle. So, in the euro zone, Thursday is shaping up to be a massive day for European event risk. The EU leaders summit beginning Thursday should shed light on progress on both the EU recovery fund and Brexit. Credible threats from Poland and Hungary out of the EU recovery fund, even if it means shifting to emergency budgets in January, should be enough to secure or compromise here. Brexit talks could be resolved by this time as well, although it appears unlikely at the moment. We'll also see the European Central Bank decision and press conference. A top-up and extension of the pandemic emergency purchase programme is widely expected. Let's see what President Lagarde has to say about the euro. The market won't buy any description of euro gains as brutal. The trade-weighted euro is merely at the top of its four-month range owing to strong gains in Asian FX. There's not much on the European data calendar next week, apart from some October industrial production data. The German ZEW, as most FX watchers think that something like Chinese FX reserves Monday may actually be more interesting for the euro dollar. Korea has already reported a $10 billion increase in November reserves, which points to a potentially large increase in China FX reserves. Some maybe 20-30% of this increase in reserves may get rebalanced into the euro, annoying for the ECB, but something that has to be accepted as the world's number two FX reserve currency. It's from a technical perspective, the euro dollar achieved our 21-20 minimum upside objective. It's awesome profit taking on Friday, as anticipated. However, as any pullbacks remain supported by the prior highs at the 120 area, we now look for an advance to test the major projected ascending trendline resistance and monthly projected range resistance, all coming in at the 123 handle. From here, we can then anticipate a minimum of a three-way corrected move back down into the 119-120 area again. So, in the UK, the roller coaster of news about Brexit negotiations saw sterling whipsaw this week. In practice, we don't know much more than we did last week, really, in terms of the possible compromise on the key issues. Level playing field and fisheries continue to be discussed. What we know, however, is that more than one official has pointed out, a deal may be in the offering this weekend. However, expectations have been once again frustrated and we look to the week ahead. On the other hand, France has significantly tougher its stance and officially threatened to veto any deal if it does not like the terms. Question about the time in the outcome of negotiations remains open and leaves sterling in for another make or break type situation. Market watches are still inclined to think a deal will be agreed and it looks like both sides want to finalize the negotiations before the EU summit, which kicks off on Thursday. Positive impact on sterling will be a function of A, where the France or other EU countries sound unhappy with the terms and keep threatening to veto the deal, and B, the content of the deal, especially when it comes to the implications for the service sector. The most likely scenario is that the deal will be a skinny one, mostly focusing on trade rather than services and leaving a certain degree of uncertainty for UK businesses. Should this be the case and considering markets and maintaining an optimistic stance on the deal, we may see a pullback in sterling. In terms of other data this week in the UK, we have GDP and industrial output figures for October, but these will be largely overshadowed by Brexit news. The technical perspective sterling retested those prior highs at the 13480 and we did again see some profit taking on Friday. However, as the 133 area continues to support, we would now look for a move to extend through the prior highs at 135 on route to a fifth wave upside objective at 13917. At this stage, only a move through 132 would concern the near term bullish bias, opening a move back to test support to 130 before higher. In Japan, steepening in the US yield curve is a mixed blessing for dollar yen. It's typically associated with yen under performance on the crosses, but at the same time yield curve steepening encourages Japanese investors into US debt to increase effects hedge ratios by selling dollars. If this view is correct, with a broadly positive week for risk, i.e. no major tremors out of Europe, then strong flows out of the dollar should continue to see the dollar yen pressured. Local Japanese data includes the October current account, normally a yen positive with a rebound expected to about 1.8 trillion yen, and some core machine orders data. As an aside, the major advances in the Chinese Yuan, Korean Won and the Taiwan Dollar should make Tokyo more tolerant of strength in the end. So from a technical perspective, it continues to consolidate in and around this 103-105 area. As 105 caps any upside, I'm looking for a break through the 103-18 lows, initially targeting a retest of the year to date lows at 101-20. At this juncture, only a move through 105-65 would delay downside objectives, suggesting a return to test resistance at 107. Finally, in Australia, the Aussies continue to inch higher, largely on the back of dollar weakness. But it outperformed, it was actually outpformed by most of the G10 currencies in a week where traders largely rotated from conventional prostitucals to the likes of the Euro and the Swiss. The Reserve Bank of Australia meeting proved to be a non-event as it left the perceived and effective stance of the bank unchanged. Better than expected GDP data proved interestingly supported to the Australian recovery story, leaving the market more doubtful about whether the RBA will need to add further stimulus down the road. In the week ahead, it's going to be a quiet one in terms of domestic data. The calendar does not include any market-moving data and the speech by RBA Governor Lowe may simply be confirmation of his remarks from last week's parliamentary testimony. Meanwhile, China allowed one coal cargo from Australia ashore last week. Let's see if this is followed by more baby steps towards a de-escalation of trade tensions, which would add fuel to a potential number like high for the Aussie dollar. The Aussie dollar, from a technical perspective, took out those price at the 74.50. Again, we did see a bit of profit taking on that move. Any pullbacks now that we see corrective moves look for support in around the 72.80 to 73 area, as bids emerge here and certainly as we hold the monthly pivot at 72.50. I'm now looking for a test of the primary upside objective towards the 77 handle. At this juncture, really only a move through 71.50 would concern this bullish bias. That concludes the weekly market outlook for weak commencing 7 December. As always traders, be sure to join me on Thursday for an update on all of these charts and plenty of other instruments that we're watching in terms of... commodities and the futures markets as well. Join me on Thursday at 1pm UK time. Wishing you all a prosperous trading week. Thanks very much.