 Welcome to Tickmill Weekly Market Outlook for week commencing February the 17th with me, Patrick Munley. Coronavirus story appears to be mutating into some background noise that is preventing any material recovery and risk, but equally still not triggering a fully fledged flight to safety. This is translating into a breeding ground for the dollar to retain its recent strength. As the absence of a slump in rates is pairing with robust domestic data and the notion that the US should be more protected than other economies, especially the Eurozone, to the coronavirus downside risks. Looking at the US calendar this week, the FOMC minutes for the meeting on January the 29th will likely take the center stage with particular attention to any mention of the coronavirus impact. A number of Fed officials are also set to speak, but markets do not expect any change in the rhetoric after Fed chair Powell recently reiterated that the committee is quite comfortable with the current stance. Political side, the Democratic primaries will be on pause until next Saturday, the 22nd of February when there will be the Nevada caucus. For now, the key takeaways from the first two rounds of votes appear to be that Democrats seem to have lost consensus in general, raising the chances of a re-election of President Trump. Secondly, that Sanders and Buttigieg campaigns appear to have more steam than the other contenders and more importantly that Joe Biden, his role as a front runner to challenge Trump appears to be under pressure. From a technical perspective, the dollar index is testing this pivotal resistance zone that we highlighted in last week's review and we close at that level on Friday of the 9915. If we do see some selling early in the week here in the dollar index, look for any moves back towards this 9830 area to be supported on the first test of this level. If we hold and buy as do step in the 9830, I'd be looking for a retest of the swing high of the 9915, 9920 area to ultimately be taken out and then see prices retest the 9967 high from last October. As we hold above the 9920 then only pullbacks, look for an ultimate test of the big monthly sending trend line which comes in around the 100.40 level. This also would coincide with the sending projected trend line resistance of the current channel that we're trading in. Bulls would really only be concerned at this stage on a break of the sending trend line support back down at 9780. Once we're talking about that dollar, let's check in with gold. Gold is still tracking this pattern of last year's spring and summer price action. We've been consolidating as we did during last July and August. And we look to be making a breakout here to the upside with momentum and sentiment indicators positively orientated now. I'll be looking for a breach of the 1595 to 1600 level to open a move to test 1630 and then on towards the ascending trend line resistance up towards the 1690 level. Really now at this stage only a loss of the 1545 level would concern this bullish thesis and suggest a move back down to test the sending trend line support down towards the 1490 to 1500 level. The Euro dollar has lost ground in seven of the last eight sessions as the already grim economic outlook was hit by a round of pretty unsupported data and mounting speculation around the negative impact of the coronavirus related disruptions to supply chains and demand. On top of that, the funding characteristic of the Euro prevents it to fully cash in on any recovery and risk sentiment as we witnessed last week. And the dollar is showing more and more resilience. In light of this, it won't be easy for the Euro dollar to invert the bear trend that it's currently in. And this week may actually see things from a data perspective and further pressure because in the Eurozone, we're going to be watching surveys particularly the German said EW will be the first post coronavirus indicates and should therefore attract particular attention despite the impact on the Euro haven't been quite negligible in the last instance. Elsewhere, Eurozone PMIs will be released on Friday and markets expect contraction that should mostly be reflected in the manufacturing age. This may raise or at least decisively postpone those expectations for a rebound in the Euro area economy that's been building since the second half of last year. So from a technical perspective, Euro dollar took out the 2019 lows at the 108.77 level and we're now sitting on projected descending trend line support with the equidistant swing objective this 108.50 to 108.20 to 108.20 area. Now, if we can see a reversal back through the near-term volume weighted average price currently sitting at about 108.70 to 108.80 then there is a potential for a recovery in the Euro however expect strong resistance to be seen on any move back towards the 110 level. If selling persistent beginning of the week look for a quick move down to test the pivot confidence around 107.40 to 107.20 where we also have an open gap. So that would be the level on the ground side to pay attention to. But again, if we can see some recovery here then look for a retest of 110. The bounce in Stirling last week came on the back of speculation and that the UK government will move towards more aggressive fiscal stimulus. The trigger was the resignation of Chancellor Sajid Javit who will now be replaced by Rishi Sunak. While markets expect some fiscal stimulus it is unlikely the government will want to use all of its ammunition with the next election likely so far off. In turn, markets may receive this little indication to endorse such expectations next week which may fuel a correction in Stirling. A slew of key data releases will also be closely watched next week. Markets suspect it's still too early to see any real post-election rebound in December jobs day to due on Tuesday. Consensus expects a slowdown in employment growth and wage growth may also inch lower. Inflation numbers due Wednesday for January should get a boost from higher fuel prices. Last but not least, pair mart is due on Friday and there may be some give back after the strong January print. Manufacturing gauge may start to suffer from coronavirus fears and the related concerns about the disruption in supply chains. All in all, expected slightly dovish tone to date next week in the UK which should increase the perceived probabilities of the BOE's in the coming months. From a technical perspective, that rebound we saw in Stirling from this ascending trend line support highlighted in last week's review suggests now that we can see some follow-throughs to the upside to certainly test descending trend line resistance and the monthly pivot at the 131.40 area. If this level does stem the upside here, then look for a quick retest of the 129.30 support area and a breach of last week's load at 128.75 will be a bearish development opening move down to test the 127 level. However, if we get a sustained close above the monthly pivot at 131.40, then we can see further upside to test prior range highs towards 133. Japanese yen is still failing to rally on the coronavirus story. Markets expect that it would likely need a decisive turn for the worse in the virus news flow. That is a switch from a Chinese-only story to a global pandemic fear. Instead for now, trade has seemed to have settled with the idea that the repercussions of the global economy from the upcoming Chinese slowdown can be sizable but likely time limited. This notion may continue to prevail next week and the Japanese yen gains may remain relatively cat, especially as equities continue to show a significant resilience and the US yields fail to move materially lower. The slew of domestic data in Japan next week, the GDP, machine orders and CPI readings should only have minor impacts on the Japanese yen. Growth may come in mildly better than expected but still deep into negative territory for the quarter on quarter read while the CPI read for January should keep painting an uninspiring inflation picture. From a technical perspective, as highlighted in a daily chart of the day last week, the dolly yen appears to be poised to test a potential double top here. And as we test these prior highs at the one 1020 to one 1010 area, pay attention to the developing divergence that we're witnessing in both the sentiment and momentum indicators. If we don't get a close, a quick close above this one 1030 level, I'm looking for a pullback to ultimately test ascending trend line projected ascending trend line sport all the way back down at 10830. From there, we may make another base and attempt a test of the projected ascending trend line resistance up towards the one 1120 area. The Australian dollar has found some respite this week. On the back of slightly recovery really seen in global sentiment, especially in the first half of last week with booming loans data and some residual impact of the Reserve Bank of Australia's hawkish surprise. However, next week might be a completely different story. While the sharp increase in coronavirus cases isn't proving particularly detrimental to pro-syncrical currencies, it simply limits any sustained recovery for now. Data may come back to hold the Australian dollar as well as we have employment numbers for January that should show the unemployment rate moving back to 5.2% according to consensus. We can also really can't exclude any worse reading as the impact of the bushfires may also start scraping. We must also note that the latest strong jobs reading was solely driven by part-time hiring. It'll be worth keeping an eye on whether full-time employment extend its downward trend, considering that the RBA refers to the resilience in the labor markets as one of the foundations of its surprisingly upbeat tone. You could see a sharp reversal of that hawkish pricing that started last week and the Aussie may be maybe an underperformer really in the G10 space next week. From a technical perspective, we held descending trend line resistance at the 67.45 area and a close back through the 67 level would be a bearish development and I'd be looking then for a quick test of the 65.60 area and the projected descending trend line support accompanied by the monthly S1 pivots. Only a close back through the 67.70 area would suggest a move to test the monthly pivots at the 68 handle. The Canadian dollar is definitely less exposed to the coronavirus than its Australian peer and this is due to its lucid ties with China. Oil is a key channel through which the virus story is making its way to hit the loony and the recovery and crude prices this week has given some support to the currency. The International Energy Agency did revise its oil demand forecasts but given the strength seen in the market this week, it suggests participants were factoring in even larger demand hits as a result of the coronavirus. However, the developments in the OPEC action remains a key driver moving ahead and the indecisiveness of Russia to agree to more output cuts remains a key risk for the oil outlook. Unable to fully rely on an oil rebound at this stage, Canadian dollar bulls will need to direct their hopes once again to domestic data. They may well find some breathing ground as the inflation report is set to display headline CPI inch up and core likely to stabilize at marginally above the central bank target. The read may pair with the strong jobs numbers last week to further dissipate bets on an imminent B.O.C. back to Canada easing and provide some help to the Canadian dollar to offset the negatives from coronavirus and the possible additional regular oil prices. From a technical perspective, the correction that we saw in the loony whilst it holds the symmetry swing support this 132.30 area, I'm now looking for a test of the major descending trend line resistance up towards 133.88 to 134. Note we also have the yearly R1 pivot and the monthly R2 pivot just above their 134.40 area. This will be a key area to watch price action. I'll certainly be looking at any bearish reversal set ups in this zone to sexual positions starting to move back down to test support at the 132 angle. And that concludes the weekly market outlook for week commencing the 17th of February.