 Welcome to TickMail Weekly Market Outlook for week commencing January 27th with me, Patrick Munley. The key data event in the US next week is likely to be the Fed meeting on Wednesday, following the easing of trade tensions. The Fed is likely to reiterate the message of stability in monetary policy for now. The large young change message should not lead to either a material move in the dollar or more meaningfully a repricing of the US rate path. The latter was recently more driven by the China virus related concerns, which led to lower rates globally rather than a US specific consideration. With the Fed are likely to induce a dovish repricing of the US curve, that's less likely to lead to a softer dollar as such. From a technical perspective, the dollar index is testing pivotal resistance, sorry, at the 97-80, 98 area that we suggested in last week's review. This level retains symmetry swing resistance, so we have an A, B and a C equidistant D point here. We also have the halfway back for the decline from the October highs into the end of 2019 lows. So we're going to be watching how price responds here at the beginning of the week, potential obviously for a Monday high to be put in the dollar area. So really keen to see how we trade on Monday. If we get a bearish rejection here from this 98 level, bearish outside bar would be an opportune signal to set a short position. Certainly from my perspective. But watching to see how we trade, if we take out for a second day on a closing basis above this 97-80 area, then I'll be looking for a move up to test the equidistant swing, which is A, B, C, D, the quality move up towards that 98-40, which represents a 61.8% retracement of the decline from the October highs. So we'll see how we further with the dollar. Moving off from the dollar, the gold put in a reversal last week. We've got a number of green closers here versus the near term VWAP. And we're looking now potentially for a pushback up to retest price swing highs at the 1611 and then up towards the yearly R1 at 1625. The only thing that will really negate this upward bias will be a move back down that takes out Friday's low and then would set targets. Let's just draw it in here while we're looking at it. If we hold Friday as a high, then we would have an equality move back down towards this 1500 level. Anyway, let's check in with Canadian Dollar, the Bank of Canada surprise markets with a double shift last week. Now that a rate cut seems a more realistic option, attention is really going to be paying to data releases over the coming weeks. On Friday, for example, we get November growth data. This will be closely watched. The question is whether the month-on-month gauge will remain in negative territory. In terms of other drivers, the wind of risk aversion coming from China may keep on capping risky assets. Although the Canadian Dollar should be less exposed than its antibody in counterparts from a technical perspective. If we can hold Friday's low, then all roads at this stage point to attest to be 130-190 to 132-20. That's a symmetry swing resistance and equidistant swing resistance. We also have the monthly R1 coming in there just about 132. Watching again for bearish reversal patterns in and around this potential price reversal zone to set short positions. In the Eurozone, data should confirm the January ECB meeting assessment of incoming data pointing to stabilisation of growth dynamics and indications of moderate increase in underlying inflation. German January IFO data is released on Monday and is set to increase. And core Eurozone January CPI released on Friday is to stay roughly around the 1.3% year over year. So as was the case of the ECB meeting, this does not mean a stronger Euro as such as outcomes are in line with ECB expectations and thus don't necessarily lead to a need to loosen monetary policy. However, the Euro from a technical perspective is testing key support. We have equidistant swing support down to the 110-15, we have symmetry swing support, the 110-36 and we now have projected ascending trend line support coming in around this 109-90. So we're testing key support here for the Euro dollar. If we can put in some bullish reversal patterns in and around these levels, I'd be looking to position on the long side. However, if we take out the 109-85 ascending trend line support, then really all roads point to a retest of last year's lows down towards that 108-80. In the UK, the market is still split on the odds of the Bank of England raker. Pricing is at 50% probability of a cut, although this is reduced obviously from the 70% prior to the better than expected UK PMIs released on Friday. The pricing is still meaningful and it has two implications. One, the GBP is likely to appreciate in a response to an on-the-hold decision because of that 50% probability of a cut being priced in. Two, the scale of the GBP upside may not be pronounced as the uncertainty about the UK economic data and the tightest voting margin behind the BOE decision. Not to cut rates suggests that the market will continue pricing a non-negligible probability of a cut coming in the coming months. So the market will postpone the expectations of a cut rather than fully reverse it. In the same way, the GBP reacted to the January UK PMIs on Friday, popping higher an issue, but then we closed at the lows. And from a technical perspective, at this stage, whilst we hold that 131.80 resistance with the Friday close, flipping the near-term and volume weighted average price bearish on the closing basis, a break below the low on Friday would open and move down to test the yearly pivot at 1.2908. And then we have symmetry swing and equidistant swing and ascending trendline support all coming in around this 1.2830. So those are the key levels on the downside, watching for potential bullish reversals in around this level to set long positions targeting certainly a retest of the 1.3180 and then potentially on up towards that 1.3280 area. However, if we fail to hold support in around this 1.2830 zone, then we've got to look at the move back down to test 1.26 next. Risk markets are carefully monitoring the spread of the coronavirus. 2020 has so far been a good year for asset markets and the impact of the virus has been largely contained to Chinese markets. However, in the S&Ps on Friday, we did see a weak close. In the foreign exchange phase, the Japanese yen has shown a bit of outperformance on the crosses, but the FX options market is not so far anyway showing real signs of alarm. I doubt that the Fed will have much of an impact on the dollar yen this week. But from the Japanese side, we get updates on Tokyo CPI, employment, industrial production retail service. And it's recent meeting the BOJ modestly upgraded growth and downgraded its inflation forecast to leave its complicated monetary policy unchanged. It's hard to see BOJ policy having much impact on the JPY this year. And really looking at the headlines out of China over the weekend, I would anticipate we might see some follow through on the downside earlier in the week on the dollar yen. Certainly looking for a test back of the monthly pivot of 108.90, potentially yearly pivot back down to 108.50. And then we have ascending trend line support projected coming in at around 108. But until we take out or flip the daily chart bullish, as per a close above the VWAP, currently around 109.60.70, downside looks to be in favour as we go into the beginning of the week. Finally, down in Australia, we saw markets slashing their expectations for first quarter monetary policy using by the Reserve Bank of Australia. In only one week, the pricing of the upcoming meeting, which is due February 4th, moved from minus 14 basis points to minus 4 basis points. The trigger was that unexpected drop in unemployment from 5.2 to 5.1%. However, the market has been probably a little bit hasty pricing out easy. The jobs report was encouraging, but the employment gains were only driven by part-time hiring. Also, the unemployment rate is still far from the level that would start to push up inflation. Speaking of inflation, we get CPI numbers for Q4 2019, they're released Wednesday. And the market expects them to flatten at about 1.7%. This should prove an unexciting read, considering the RBA target is 2-3%, and may really hinder the upbeat mood on the Australian rate expectations. Markets may also start to reassess the fundamentals of such expectations, and the Australian dollar may face some continued downside pressure next week, also considering the coronavirus and the impacts of the bushfires. From a technical perspective, the Australian dollar is about to test key symmetry swing support, ascending trend line support, or coming around this 68 level. If we get some bullish reversal patterns in and around here, this could be an opportune level to set some long positions. However, a failure below this 67.90 will be a bearish signal, opening the move back down to test 67.50. And that concludes the weekly market outlook for week commencing the 27th of January.