 Welcome traders to the first weekly market outlook for 2023 for week commencing the 9th of January. With me Patrick Muddly, happy new year to everyone. I hope you had a happy and healthy holiday period. Let's get into the fundamentals for the week ahead. Looking to the US it's clear that economic headwinds are intensifying and business surveys are softening as a result with business leaders becoming more pessimistic. Markets expect this to translate into weaker hiring and eventual drop job shedding as companies look to cut costs. Comparative pressures amid a weakening demand environment also suggest that inflation should slow too. However, Federal Reserve officials continue to indicate that they think they have more work to do in the battle to get inflation back to the bank's 2% target. They remain concerned that policy needs to be more restrictive and to stay restrictive for a longer period of time to ensure that demand moves into balance with the economy's supply capacity and price pressures subside. In that regard the key data point in the week ahead is going to be US CPI. Markets expect to see a further moderation in the annual raise of inflation from 7.1% down to 6.6% but this is still more than three times faster than the Federal Reserve's 2% target. Federal officials have made it clear they expect good prices inflation to continue to soften. Expect another big drop in the price of used cars given the steep decline in new vehicle sales as consumers pull away from major purchases and lending criteria become stricter. But officials are seemingly focused on the services ex-housing. The consumer spending story looks okay right now and that is likely to keep core inflation pressures somewhat while it is too soon for the weakening in the housing market to show up in clear moderation in the cost of shelter since it's typically lags by 12-14 months. So that is more of a story for the second quarter into the third quarter of this year. Meanwhile medical care costs have fallen for two consecutive months and are unlikely to be quite so helpful in depressing overall inflation. Still the 0.3% month on month print would lead to the annual rate of core inflation hitting 5.7% versus that 6% in November. Marks expects much sharper falls in the annual rate of inflation from the early second quarter onwards. Other things to look out for include consumer confidence and small business confidence. Both are likely to remain weak given the impact of falling asset prices. High inflation and more headlines regarding job losses from some big corporate names are likely. Also look out for comments from Fed officials and most importantly Fed Chair Jerome Powell who speaks on Tuesday. So from a technical perspective Dollar Index has put in a double bottom at the 103.17. I'm anticipating whilst we hold the pivot here 104.20 in the high volume mode 104 look for another leg to the downside to take out the lows and test into that 102.50 area. From there I'm watching for bullish momentum divergence to develop watch for bullish reversal patterns here to engage on the long side looking for a three-way corrective move back into test 105.50. At this stage it would take a move back through 105.80 to suggest a more meaningful low in place and then we'd be starting to think about upside corrections on the weekly timeframe back into that 108.109 handle. For now focus remains on the downside. Moving to the Eurozone and the Eurozone kicks off the year with new labor market data. October saw unemployment drop more despite deteriorating economic conditions. The question is how long the labor market can continue its run of improving unemployment rates. If indeed we see unemployment decreasing further this could unleash more hawkishness from the European Central Bank. Besides unemployment we also get trade and industry data. Industrial production has been resilient despite the energy shock but survey data is point to weaker activity regardless. The trade balance is important to watch as expensive energy imports have completely flipped the Eurozone trade balance from surplus to deficit. October saw an encouraging improvement in the trade balance and the question is whether softening natural gas prices have caused further improvements. This is important for the fair value of the Euro dollar. From a technical perspective looking for the Euro dollar to ultimately retest and fail just above the 107 handle then we're looking for a corrective move to play out ultimately taking us down to initially test monthly projected range support 103.50s and then into more meaningful sport just above the 102 handle which coincides with that weekly trend line support and from there I'd be watching for bullish reversal patterns to re-engage on the long side looking for the next leg to the outside to develop. At this stage it would really take close back through that 102 on a weekly scale to suggest a more meaningful high in place and then we'd be looking to move back down to test support into the 99.50s moving to the UK. The UK's monthly GDP figures have been a bit all over the place recently in part because of the Queen's funeral last September but strip out the volatility and the economy is clearly weakening and the constant downtrend in retail sales through last year is one such example markets expect a negative monthly figure due for November after October's artificial bounce back following the September's extra bank holiday. That and other such decline in December would probably be just enough to lock in the second consecutive quarter of negative growth and mark the start of a technical recession in the UK that's likely to last until at least the summer. For now markets are penciling in a 0.1% fall for overall fourth quarter GDP when the figures are released next month and just over 1.5% Peachtroff fall in output over several months. From a technical perspective Sterling Dollar has put in the first leg of a potential three-wave decline here so I'm looking for any push up into the 122.60, 122.90 area which would bearish reversal patterns there to engage on the short side and we are looking for a move down to test monthly projected grain support just below 1.1650. At this stage it would take a close back through 1.2440 to suggest a false downside break and set sites firmly on that weekly projected trend line resistance coming in 1.2780. Now moving to Japan it's going to be interesting to see if the Japanese yen continues to positively correlate with risk if China experiences a bumping reopening post the January 8th deadline for that reopening. If the currency is dragged lower by growth concerns given China's importance to Japan as a trading partner. Tokyo inflation data is an important partial indicator for nationwide inflation and further acceleration could be read by investors as putting more pressure on the BOJ to begin normalizing monetary policy by adjusting their yield curve control in the coming months and giving a further boost to the Japanese yen. From a technical perspective I'm looking for a three-wave corrected move to test into support at 1.3050 and then I'm looking for another leg to the upside up into projected monthly range resistance 1.3712 and just above there we have 1.38 from there I watch for various reversal patterns to re-engage on the short side and we're looking ultimately for a three-way correction to develop and I'm anticipating a test down into the 1.20 area as the ultimate corrective target. At this stage we really take a close back through 1.3930s the high volume level and four hour chart here to suggest a more meaningful low in place and that would set up a move like I say up into that 1.40 test as the next upside objective. Moving down under to Australia again obviously this January 8th reopening date is going to prove a point of focus for Australia as China reopens and investor attention will increasingly be pulled towards anecdotal evidence of infection numbers. Australia's monthly inflation data will continue to attract investor attention if not the RBA attention. The Reserve Bank of Australia expects inflation to peak around 8% in Q4 so significant acceleration in the monthly inflation data from the current 6.9% Euroview is indeed needed to confirm this forecast. A lower than expected peak in inflation could mean a lower peak in the RBA's cash rate. Australian retail sales data will continue to soften as a weak housing market and falling consumer sentiment both due to the RBA exert gravity on household consumption even in the face of a tight labor market. From a technical perspective whilst the Aussie Dolly holds on to the 6820s and looking for a push-up into monthly projected range resistance 6950s and from there I'm looking for a three-way corrected pullback into ascending train channel sport 6630s before we set up the next meaningful leg to the outside. Ultimately then we're going to be looking for a test of weekly projected trend channel resistance coming in at 7320s. At this stage it's going to take the close back through the 6580s just a more meaningful high in place and then we'll be looking for a deeper corrected move to develop and we'll just round things out quickly by checking in with our weekend risk barometer Bitcoin. I'm looking for a test of the 17,000 level here which is the equality objective versus this current swing structure and there I'll watch for bearish reversal patterns to re-engage on the short side looking for a retest of the lows here through 16,200 set up a test of weekly projected range support down to the 16,000 level. At this stage it's going to take a close back through 17,200 set up a test of 17,300 and then on to 17,500 and that concludes the weekly market outlook for we commencing the 9th of January as always traders plan the trade, trade the plan and most importantly manage your risk