 Welcome to Tick Mill Weekly Market Outlook for week commencing the 20th of January with me, Patrick Munley. In the US, it's a fairly quiet week on the data fronts. December US existing home sales on Wednesday should not materially change or impact the dollar trading. Rising speculation about possible US tax cuts might be seen as marginally positive for the US dollar versus low yielders like the Euro. As it would benefit the dollar in two ways, one on improved growth channel and secondly on further reduction of the odds of the Federal Reserve cutting rates this year, which is almost fully priced. From a technical perspective, the dollar index pulled back as anticipated and tested the pivot confidence of the weekly, monthly and yearly pivot at the 97 level by a step in on Thursday, followed through on Friday. In our testing trend line resistance above here we have some symmetry swing resistance and the monthly R1 all sighted at 97.80. I'm looking for sellers to emerge in this area looking for bearish reversal patterns. We've also got some momentum sentiment divergence developing. So if we get some bearish reversal candles in and around this 97.80, 98 area, that would be an opportunity area to step into short positions. However, if we don't see any participation on the sell side of these levels, look for a push through and a move up to test towards the 98, 40, 98, 50 level. Also we're talking about the dollar. Let's check in with Gold. Gold had pulled back as anticipated from the short reversal scene last week as we tested up into our target zone. We've seen consolidation throughout last week with bids supporting back on a retest from above at the monthly R1 level at 1545 to 1540. I do note here the confidence we're seeing in terms of similarity in price action. I highlighted in my chart of the day, towards the back end of last year, similarity in the price action we saw in Gold, the breakout consolidation. We could be replicating the consolidation phase we saw back in the early summer here and if that is the case, I look for a topside break, a retest of the prior spike highs at that 1610 area push up towards the yearly R1 at 1630, where I would then anticipate we see some consolidation potentially similar to that, which we saw throughout the mid to late summer. However, if we fail to hold the 1537 area, 1535, look for a move back to test, sending trendline support back down towards 1500. In Canada next week, the Bank of Canada meets immediately after they released December CPI readings, which should continue to indicate that inflation remains on targets. While the bank is unlikely to change its current stance while in better than expected labour market data, traders will be keen to look at any change in the monetary policy report outlook to assess the possibility of a cut in the coming months. Markets are still somewhat unconvinced of this probability of BOC easing, but we could see some correction as soon as next week if the monetary policy report forecasts signal a less upbeat term for the economic outlook. From a technical perspective, the Canadian dollar staged a recovery from the 12950 support highlighted in last week's outlook, and we trade up now towards the resistance, the monthly pivot, 13080. Whilst we don't see a close above 13080, I see the potential for another leg of downside ultimately to test down towards the 129. However, if we do get a close above the 131 level, this would suggest further upside corrective patterns, which should see us testing the 130192 to 132 area next week. The European Central Bank meeting is the highlight next week in the Eurozone. They meet on Thursday, but it should probably be a non-event. No new economic projections are published, and the Board's assessment is unlikely to change compared to the December outlook. While the ECB's strategic review is set to begin soon, it won't be completed until the year ends, and in the meantime the narrative is unlikely to change, hence a fairly limited impact on the Euro, stemming from this meeting. As for the January Eurozone PMIs that are released on Friday, look for some modest improvement there, though the manufacturing PMIs should remain in contractionary territory. Still stabilizing modestly, improving Eurozone's PMI fit the current ECB outlook for stability and hopes for a rebound. From a technical perspective, the Eurodollar held the resistance area that we identified at this 111.50, 111.70 area, and sellers did step in. I'm now looking for some follow-through to seven tests of the ascending trendline support here down towards this 110.50, 110.40, 110.60 area. I'll be watching closely to see if we can get some bullish reversals in and around here to play for another leg of corrected upside in the Eurodollar. However, if we don't find support, we don't see those bullish reversal patterns emerge in this zone, I'll be looking for a move down to retest support towards 110, the figure. While we're talking about the Euro, let's check in with the DAX. The DAX continue to trade higher as anticipated, and we are now just coming shy of the target zone at the 13,658th area, a long-awaited target I've been highlighting. I've been looking for a test up into this area, and then I see the potential for a symmetry swing correction which should see us trade back down towards support at the 13,000 level. If buyers reemerge at this 13,000, then I think we have a clear path towards a retest of the swing highs, which are likely to be in this 13,600 area, en route to a test of yearly R1 up towards 14,250. In the UK, a stream of disappointing data has confirmed the NPC's concerns and sharply increased the odds of a rate cut, both November's UK employment data on Tuesday and January's PMIs, which are released on Friday, will be crucial factors to watch this week. A downside surprise or signs that the data is not improving would likely cement market expectations of a cut to come imminently. However, the market has already penciled in this move and its base case, about a 70% probability, is looking for another partial cut in the remainder of the year. This suggests that the downside to sterling may be limited from here. Indeed, disappointing retail sales for December sparked only a muted reaction in the currency on Friday, although we did close at the lows. So let's just take a look at the technical picture here, expecting the close we saw on Friday to see some follow through earlier the week. Look for a retest here of the yearly pivot down towards the 129 area. The potential is that buyers will step in here and if they do, we could then see a recovery backup to test range resistance now on 32. However, if we fail to see these bullish reversal patterns emerge in this support zone, look for a test of ascending trendline support down towards 128. The Bank of Japan will announce policy on Tuesday, but the potential for surprise appears to be low. With no military ammunition left to support the economy, BOJ Governor Karoda will have to be content with $120 billion of fiscal spending announced in December to soften the impact of the recent consumption tax hike. CPI numbers out on Thursday may show marginal advance, but it's unlikely to lift the depressed Japanese rates environment. From the technical perspective, Dolien has been supported this week with the risk environments and risk sentiment also on the front foot. Now looking for a test of this equidistant swing target at the 11045 with ascending trendline resistance up towards 11060. I'll be watching closely this area. We've got some momentum and sentiment divergence developing. If we see the bearish reversal patterns close below the near term V-MAP will all be potential signals for me to do something on the short side in the Dolien, certainly targeting a retest of the breakout level towards the 10960 to 10950. If we don't see the anticipated offers developing this 11040 to 11060 area, then I'll be looking for a push higher as an extended drive really to test the 111 and 11150 area. Finally, down under in Australia, domestic drivers are likely to really be directing the trading this week. Although stabilizing risk sentiment of a supportive underlying narrative to the Aussie dollar focus will be on employment days for December, which is out overnight on Wednesday and Thursday, early Thursday morning, European time zone. The markets increasingly torn around the prospect of another rate cut in the next few months. Certainly, the bushfire emergency is likely offering additional support to RBI action. However, market watches will be keenly watching the employment data as that has been the key driver for the RBA in the recent meetings. Market watches are anticipating an inline with consensus rating, so employment held at 5.2% in December, with the employment change slowing to 11,000. But obviously there are significant downside risks related to the bushfire crisis on a relative basis, much higher than its peers in the commodity block the Canadian dollar or the Kiwi dollar. The portion is warranted on the data. From a technical perspective, the Australian dollar, Tesla monthly pivot sellers stepped in, closed below the near term VWAP and we saw a follow through selling on Friday. I'll be looking for a retest now of the 6840 sport area and then into the 6820 ascended trend line support. If we can get some bullish reversal patterns here, once again I would be prepared to step in on the long side. However, if we don't see that support emerge and we breach the 68 level, look for a move down to 67.50 this week. And that wraps up the weekly market outlook for week commencing the 20th of January.