 Welcome to Tick-Mail We-Tee Market Outlook for week-menacing the 10th of February with me, Patrick Munley. The dollar is continuing to outperform. Once again, as the coronavirus and its impact on global supply chains is seen as a greater problem for Asia, Europe and the commodity producers. With European effects under pressure alongside Asia, the dollar index is now pushing higher, heading towards even a test potentially at the 100 level, which we know that President Trump had said back in August of 2019 that this level was too strong. Clearly this is a market led move in Asia and European effects and not a managed devaluation as such. So these dollar index levels may see the president demand more raid cuts from the Federal Reserve rather than criticise its trading partners. Indeed, the story of President Trump potentially instructing the U.S. Treasury to weaken the dollar may resurface again. On the data side, record highs for equities are lifting consumer confidence and should in the coming week contribute some strong retail sales data for January, which was released on Friday. Thursday should also see CPI headline and core inflation coming in at around 2.2 to 2.3% year over year, perhaps limiting the downside for U.S. rates at the short end. That will be the case unless, of course, U.S. equities finally succumb to the datum grade of global growth caused by the coronavirus. Also, markets will keep keen eye on Fed Chair Powell's testimony. What he has to say about the outlook and how the economy and monetary policy may fare given the worries about the coronavirus. From a technical perspective, the dollar index cleared some significant resistance this week at the 98-50 level and looks poised now to make a test of the equidistant swing target and the yearly R1 pivot at the 99-15 level. I'll be looking for resistance here as we trade into this level, watching for daily reversal candles as an opportunity to do something on the short side, looking potentially for a retest back towards this 98-50 level. However, a daily close through the 99-20 would be a significant bullish development, putting at risk the prior swing highs of 99-67 and then we would likely see a test of the psychological 100 level. So all eyes this week on the test of this 99 level and how the market responds at that level. As we're talking about the dollar, let's check in with gold. Gold continues to track the pattern that we saw play out last summer after the breakout from the consolidation similar to what we saw at the back end of last year. We're now consolidating and a breach through the prior highs at this 15-92 level would be a bullish development suggesting another leg of upside initially targeting the 16-28 area, which is the yearly R1 pivot and the current monthly R1. But if we get a close through there, then we look for ultimately for a test of the top side of the projected ascending trend line coming in towards the 1700 handle. At this stage, only a breach below the 15-30 would suggest that this current symmetry pattern is failing and that we're likely to see a move down to test trend line support back towards the 14-90 level. So far there have been very little signs of optimism in the eurozone manufacturing sector, especially in Germany. In fact, German industrial production fell a staggering 6.8% year over year in December. Warning of another weak eurozone reading, December industrial production will be released on Wednesday. Data also points to downside risks to the German fourth quarter of 2019 GDP data, which will be released on Friday. Concerns are that this will the black zero level, commonly referenced, could come to reference German growth and not just the balanced budget, but more normally associated with the phrase. This is all before the shock of the coronavirus is absorbed by the global manufacturing sector. For example, reports about European car plants struggling with supply chain issues are beginning to emerge. Money markets are yet to price in further ECB easing this year. Currently, the Iona one year over one year rate is still quite steady, but that could be at risk if markets start to price in further downside. From a technical perspective, Eurodollar is sitting at a pivotal weekly trend line highlighted in my chart of the day on Friday, which you get through the blog. If we take out the 10920 level, and I'm looking for a quick test of the yearly S1 pivots and the monthly S2 pivots and the prior lows in 2019, October 2019, down towards this 10870. This level will be pivotal, because if we can put in a potential double bottom here, then I'll be watching for bullish reversal patterns to set long positions. Once we're talking about the Euro, let's check in with the DAX. The DAX is back up, retesting the prior swing highs, which are the major equidistant swing target towards this 13,650 level, saw some selling on Friday pointing to a potential double top here. We've got significant momentum and sentiment divergence. So watching for some follow through, if we see some follow through to the downside, I'll be looking for a test back towards this 13,160 level. Only really a close over 13,650 would be a bullish development, opening move up to test 14,000. Next week in the UK, the key data releases are pretty much condensed to Tuesday, when fourth quarter preliminary GDP numbers will be reached alongside the industrial production numbers for December. Markets expect growth has probably slowed year over year, while industrial production may have mildly rebounded in the month over month gauge, all in all markets expected. We'll probably balance impact of data on GBP next week, which suggests that the currency will remain vulnerable to further downsides, certainly on the back of jittery sentiment when it comes to the UK and the future trade relationships. Also known as on the political side, a reshuffle in the UK cabinet may trigger speculation around a more or less accommodative stance ahead of trade negotiations. From a technical perspective, the selling last week and we're now testing pivotal trend line support and the yearly pivot points all around this 129 level. If we see sustained selling at the beginning of the week, look for a move down to test 127.50 on the downside. However, if we can put in a sharp reversal on Monday and Tuesday, then there is the potential we will hold this third test of the selling trend line and then we can look for a move back up to test the 131.50 area, which represents the monthly pivot points. Next week will be a quiet week in terms of Australia in terms of data releases, certainly the coronavirus will once again be the key focus in the primary driver for currency movements. I expect the Australian dollars to pretty much continue to underperform its pro-signical peers if sentiment remains choppy, but also needs to bear in mind the longer term perspective and thus it bears a bigger deal of downside risk if the RBA are going to move to a competitive stance and start cutting rates once they start to see the impact of the coronavirus and certainly the bushfire emergency as well over the coming months. From a technical perspective, the Australian dollar is sitting at pivotal support here. As discussed in last week's daily market outlook, the Australian dollar saw resistance at the symmetry swing objective around this 67.60 area. We've now printed a new low so technically have made the minimum conditions for this cycle to the downside to be complete and we are sitting at a weekly trend line support on the yearly S1 pivot. So we'll see if this sharp selling we saw on Friday can be reversed beginning of the week to set a base here for the Australian dollar. If we can't find any bids in this market then we would look for the break of the trend line and a quick test down to the monthly S1 at 65.60. If we don't find support there then the next stop is going to be 64.80-65. However, watching for any bullish reversal patterns at the beginning of the week to potentially set long positions to look for a move back above 68. In Japan next week, the local Japanese datacamner is really quite light, but presumably the bank of Japan will at some stage have to be not off a consistent view of virtuous cycle of corporate profits employment, consumption and inflation. That will certainly occur if global equity markets take a turn for the worse and that could impact the Japanese yen. However, for now, the yen appears to remain supported. We're now trading back up into the top end of the recent range. You can see some profit taking on Friday at the monthly R1 pivot. Whilst we trade above the new term volume weighted average price, we look for further tests back up through the 110.31 area and then up to test this 110.50 which is the equidistant swing objective. Through there then we would look for the 111 sending trend line projected resistance to be the next upside target. However, if we do see sustained selling at the beginning of the week, closed through the near some volume weighted average price, we'll open a move back down to test the 108.70 level and more likely than not the ascending trend line is forward down towards 108.30 and that concludes the weekly market outlook for week commencing the 10th of February.