 Welcome to Tick Mill Weekly Market Outlook for week 20th August with me, Patrick Munley. Dollar heads into August after being under considerable pressure in July, having seen its largest monthly decline in three years. The nature of the sell-off suggests a different dynamic is at play. This is not the benign dollar decline we did market envisaged but instead one seemingly being driven on a new risk premium being inserted into US asset markets on the back of a resurgence in the US COVID-19 cases and perhaps as well as November's presidential elections that are starting to make their mark. The dollar did not appreciate President Trump's suggestion of delaying the November 3rd election. The US week ahead will be about jobs and benefits. Expect July bounce back in jobs with ADP and AFP that will not be quite as strong as consensus believes. The non-farm payrolls could actually decline in August. Markets will also be focusing on Congress where the $600 per month unemployment benefit boost has now expired and the parties are wrangling over the design of the Phase 4 stimulus package. Delays here may upset asset markets which typically tend to struggle a little in August as I discussed in last week's live analysis session. The US data calendar will also see some encouraging ISN numbers but the market is now more wary about the US lockdowns rather than the modest uptick in business optimism. From a technical perspective, the dollar index tested the projected ascending trendline support at the 9250 area and we saw a key day reversal on Friday with profit taking and buyers stepping into the market. What we'll be looking for now as we head into Monday is some follow-through price action and I'll be looking initially for a counter trend corrective move to target this symmetry swing resistance at 9450. However, if we take out Friday's lows then I'll be looking for a move down to the 91 level as the next downside objective. But the preferred scenario at this stage is that we see some corrective action now and we're going to move up to this 9450 area. The speed of the Euro rally has surprised many and embodies what I think is a positive reassessment of the Eurozone project as well as a reconsideration of US risk. Speculators looked to have been positioned for the rally but not for its speed. The need to hold dollars is now less acute as evidenced by the just $107 billion dollar being drawn on the Fed's dollar swap lines versus the peak of $450 billion dollars in late May. Typically the month of August is slightly friendlier to the dollar which may generate some consolidation in the Euro rally. However, it's a long three months until the US election and with US dollar hedging costs so cheap we can suspect that the dollar will stay on the back foot. For the week ahead in terms of data we'll see some German real sector data for June, industrial production and factory goods data but markets suspect the US story will continue to dominate with fewer fears over dollar liquidity. The big question is whether the weaker US data and relatively weaker US equities now actually may be dollar negative rather than positive as the risk on dollar off paradigm starts to change. The technical perspective of Euro dollar has tested its projected descending trend line resistance and we did see a key day reversal closing below near term volume wasted average price. So I'll be looking for follow-through early in the week to get a move down initially testing 116.50. If we don't see sufficient bids come into the market there then I'll be looking for a deeper pullback to test the midpoint of the channel and the 161 extension of the symmetry swing move which would have us testing 114.90. The highlights of the week in terms of sterling will be the Thursday's Bank of England meeting negative interest rate policy is under active review at the BOE but I think it's probably a little too early for BOE to make any decisive moves here. The BOE will probably prefer to hold off on the use of negative interest rate policy until some clarity emerges on the UK-EU relationship from 2021. Currently in money market futures price the bank rate currently it's 0.1% moving into negative territory early next year. Also there are no expectations at this meeting for a change of BOE's $745 billion APP target. From a technical perspective whilst we hold Friday's highs I'll be looking for a symmetry swing pullback to test ascending trendline support back to the 126 area. Obviously if you take out Friday's highs then the upside objective is going to become 135.20 which is the projected ascending trendline resistance. It's been, market's been surprised really to see the dolly entered under 105 and the move a reminder of a new perceived flaws in the dollar. We can assume that some of the Japan's largest fund managers including the GPIF will be using the opportunity to buy US debt securities unherged thereby slowing this decline. The move under 105 also prompted remarks from the Japanese authorities over vigilance on these FX moves. The Japanese week ahead sees final first quarter GDP Tokyo July CPI and some final July PMI numbers. Nothing to independently really move the yen. Instead the market may focus on the latest chapter in SoftBank's divestment strategy. A reported $32 billion sale of its UK arm tech holding. Divestments proceeds finally the way into the end could limit the upside over the coming months. From technical perspective as we discussed in the live analysis session last week we were looking for this 104-15 area to be tested and we saw a sharp bounce on Friday key reversal pattern but we're now sitting right at resistance here this 106 area prior support and if we can't get follow through here then I think we're likely to retest the current lows but if we can get a move through this 106 area then I'm looking for a symmetry swing upside objective at 108. The Australian state of Victoria remains in full emergency mode as the lockdown restrictions are failing to flatten the contagion curve. Now the risk is that even stricter measures will be imposed in the state which keeps the balance of risks for the already uncertain economic recovery tilted to the downside. As the RBA announced his monetary policy next week investors will specifically be looking at how the bank will factor the flare-up in Victoria cases in their monetary policy stance. The most straightforward move could be to simply reiterate the correct accommodative stance and the determination to do more if needed. At this stage further tapering comments will hardly find any space in the statement. Likely in the previous meeting markets will be very sensitive to any currency comments to track any change the currently very relaxed stance on the Aussie dollar strength. With markets likely positioned for such a scenario the Aussie may see somewhat limited impact from the meeting. The week in Australia is packed with other releases with trade and retail sales data from June and the RBA statement of monetary policy later in the week. Markets however may look beyond such data given the recent developments in Victoria and having given fresh concerns on the economic outlook and the Aussie may only marginally benefit from any upside surprise in the data. From a technical perspective like the other majors here we saw a key reversal on Friday in the Australian dollar from that 72 area that we talked about in the live analysis session and now what I'm looking for is a symmetry swing pullback to initially test the 6930 area and again if we don't find sufficient bids here then I'd be looking for a deeper pullback to test this 6750 as the interim downside objective and that concludes the weekly market outlook for week commencing the 3rd of August. Like I said be sure to join me on Thursdays at 1 p.m. UK time where I will be giving live market analysis sessions, overviewing trades and developing opportunities in the market so be sure to join me then on Thursday at 1 p.m. Thanks very much and have a good week.