 Welcome to Tick Mail Weekly Market Outlook for weekmen singing the 12th of October with me and Patrick Mundley. Dollar goes into Monday's US Columbus Day to Public Holiday, slightly offered. Supporting risk assets and pressure on the dollar seem to be the hopes for fresh US fiscal stimulus. An investor settling into the view that the presidential election outcome will not be contested. I don't expect these views to be challenged too harshly in the week ahead since the second presidential TV debate looks to be delayed and neither party in Congress wants to be seeing killing stimulus prospects. US data this week comes in the form of NFI Beats More Business Optimism, retail sales, industrial production and consumer sentiments, which should all be relatively supportive of risk assets. One challenge to the modestly upbeat sentiment may come from the IMF autumn meetings which start in Washington on Monday. Closely followed World Economic Outlook is released on Tuesday and we'll see an update of the IMF's well-growth forecast. We expect to see a minus 4.9% in 2020 and plus 5.4% in 2021. Whilst we may see a modest upgrade to the 2020 number, I expect more focus to be on the downside risk to the 2021 figure based on second-wave challenges. A concerted push for fresh fiscal stimulus from central banks speakers looks likely too. Also note that US secretaries will take their cue from the start of third-quarter earnings releases from the US banks. The big question is how these institutions handle some of the aggressive provisioning made in the second quarter and could possibly see some positive surprises. From a technical perspective, the dollar index is trading in a relatively well-defined five-wave pattern. We have the fourth wave complete at the ideal 94.50 area, which is an equality objective and a symmetry swing resistance zone and the descending trend line resistance. Traded down to test ascending trend line support. Got a bullish reversal last week and looked like we may see prices move higher. That candle was invalidated and we closed on the weak side on Friday. If we can get down through this 92.60, 92.50 area, then I see the potential that we trade lower to complete the five-wave pattern looking for a test of the 90 handle. However, if we do see some bullish reversal patterns developing this 92.70, still the potential that we get to move up to test 94.50, although that's not the base case at this point. The euro has stayed relatively supported despite much verbal intervention from the ECB, obviously very low inflation with core at 0.2% euro per year, gives the ECB good cause for concern over euro strength, but broader global factors are at play here. The euro is indeed participating in the global reflation story, steeper yield curves, particularly in the US, and it will probably take a loss of confidence in the global recovery rather than the ECB rhetoric to turn the euro materially lower. Apart from the EU summit on Thursday, which in addition to Brexit, could look at fresh sanctions on Russia and Turkey. It does not look like there's enough macro data to give oxygen to ECB guards fears of a double dick. The only data noting the euro zone is the German ZEW and, more important, October PMIs have not released until the following week. Instead the biggest challenge probably comes from whether European lockdowns broaden Israel is the only country to see a second national lockdown at this point. So from a technical perspective, obviously inverse to the dollar index, we have a potential way for low in place for the euro. One area of interest is the equality objective versus this current structure, which is this 1.1915. We want to pay attention to how prices trade there. We've got a bunch of prior highs there. So this area could prove sticky. However, if we overcome this 1.1950, then I'm looking for a fifth wave to complete into the ideal 1.2116, which is also the equality objective versus the initial move off the low. I'm looking for that 1.21 area as we hold 1.16 as our support. Now, in the UK, all eyes are on the EU summit Thursday and Friday, and Boris Johnson's self-imposed 15th of October deadline for the negotiations. I expect the deadline to be breached in negotiations to continue until the end of October early November. There's not enough sufficient progress has been made. For the UK government to justify the breach of the deadline, both sides are likely to claim that some progress has been made, and hence negotiations continue beyond next week. Such a relatively constructive message should be positive for sterling. Sterling does not mean that the end of sterling volatility and the two-way price action in weeks thereafter. As negotiations will remain tough and the news flow may turn negative again, even if temporarily and even if the deal is eventually reached. The data front focus is on the employment data Tuesday. UK employment rate shows another slow uptick as the forth coming end to the furlough scheme continues to add pressure on the labour market. That is again the domestic data will probably pay a second fiddle to the importance of the UK-EU trade negotiations. So, from a technical perspective, a sterling trades above 1.30. I'm now looking for a test of the 1.32 area. You could see a pullback from here, if we clear 1.32, then look for a retest of price cycle highs at 1.34.90. Only a close now below this 1.27.70 area would put the bullish thesis under pressure. Dolly Yn really remains beholden to the US yield curve dynamics and the reflation story, especially so since, one, the US economy is performing well, and two, the US looks closest to receiving fresh large-scale fiscal stimulus. Assuming neither side nixes the chance of fresh stimulus, look for a little more US curve sterling, which should support the Dolly Yn with the front-end of the US curve and could particularly focus on the 10-30-year curve. Now, the steepest level for a year of a nine-week, on the data front should keep JPY within its current ranges. From a technical perspective, Dolly Yn held its equality objective here at the 1.05.90, and we did get a bearish reversal pattern on Friday, which has taken the daily VWAP bearish. If we get some follow-through selling early in the week and take out the monthly pivots at 1.05.30, then I'd look for a retest of 1.04. Last but not least, in Australia, I think expectations around further reserve bank of Australia easing are probably overdone, and the latest policy statement aimed at stressing the centrality of the jobs market for future policy decisions rather than signaling an imminent cut. Next week will likely be key in directing monetary expectations with two market-moving events in focus. Employment data is due on Thursday, and I suspect that the consensus is too much on the pessimistic side, expecting the employment rate to edge above 7%. It could be scoped from an upside surprise from there. The other event is speech by RBA Governor Low on Wednesday. Still giving the speeches before the release of the jobs figures. There's possibility that Low will not change his rhetoric just yet. As usual, markets will also be on the lookout for currency-related comments to track any possible change in the so far very relaxed stance of the RBAs to the Aussie's strength. All in all, expect the potential for some scale down in the market's dovish expectations around the RBA, and therefore there could be some room for some Aussie idiosyncratic outperformance next week. From the technical perspective, whilst we hold this 70-90 level, I'm looking for a test of the equality objective 72.95, which is also the underside of this prior ascending trend channel. We'll set the 78.6% retracement coming in at 73.20. From there we can see a pullback back to the 72 area, but whilst we trade above this swing point at 71, I've been looking for a retest of the prior cycle highs up to 74.12. That concludes the weekly market outlook for a week commencing the 12th of October. As always, join me on Thursdays at 1pm for live market analysis. Thanks very much and have a great week.