 Welcome to Tick Mill Weekly Market Outlook for a week commencing the 19th of October with me Patrick Manelwy. The US Joe Biden's lead in the opinion polls has been narrowing just slightly over the last week. President Trump will hope that this Thursday's second and final TV debate in Nashville presents an opportunity to score some points up by it. This is perhaps the last big opportunity to do this before the November 3 election. Any narrowing in the opinion polls will probably be taken as a negative by risk markets increasing as it does the chance of a contested election. This comes at a time when the financial markets are priced towards a benign outcome in the form of a democratic clean sweep. The debate comes against a backdrop of rising double dip fears and what stands out currently is the divergence between Europe, the US and China. Europe is priced towards a sharp slowdown. US markets are called in the middle, while Chinese markets are priced for a v-shaped recovery. In terms of data, next week it's going to be largely in the form of positive housing data. It shouldn't really be a game changer for the US assessment, nor should the Fed's page book, however, initial claims could receive a little more attention after a poor outcome last week and speculation could grow that the October non-farm payrolls released right after the election could actually be negative. Unless fresh fiscal stimulus comes to the rescue, this cocktail of data and events look slightly risk negative and dollar positive. So from a technical perspective, still tracking this dollar decline. As we pulled back last week, we didn't take out the sport area at the 9250 discussed in last week's session and instead buyers came in there and we have found some support. So now what we're looking at is a new equality objective at this 9570 to 96 area, this prior support zone. Now to act as resistance in an equality move that should set up a wave 4 peak and then looking for that wave 5 decline into the psychological 90 area. So, as long as we hold the last week's lows at 9295, look for a grind high into the elections beginning of November and then we'll be looking for that next leg to the downside. In terms of Eurozone, broadening lockdowns across Europe have taken their toll on European asset markets and taken some of the steam out of the Euro. The macro focus this week will be on the October PMIs released Friday where the services index is expected to fall again, but manufacturers should just about keep the Eurozone composite figure above 50. There's a whole host of ECB speakers due again this week, but it seems European fixed income markets certainly have received the message of the double dip. Here, German bun yields have recently made a new low for the year. Progress or lack thereof on Brexit will also play a role in Euro pricing this week as will Monday's OPEC Plus meeting. There have been periods this year when cyclical currencies including the Euro have rallied alongside all throwing focus on whether OPEC Plus members will dial back from planned output increases next year. If better Chinese data activity prompts another leg lower in the dollar one, then we could see some potential early support this week in terms of the Euro. From a cyclical perspective, tracking the potential five way of advance here and we're in a way for corrective pattern. Certainly that view will receive confirmation if we can take out this 116, but as we hold this 117 area, there is still the potential that we've actually seen the three wave decline here and that we have our fourth wave low in place and we could see a move up to test this 122 target. The base case for me at this stage is that whilst we hold the 118.20s resistance, I'm looking for a test now of the 115 to 114.50 area, where again looking for this election low in terms of the Euro and a high in terms of the dollar, so I'll be looking at long positions then targeting the 122. In terms of the UK, despite Prime Minister Johnson's comments about the UK government's willingness to go for the Australia style trade deal, the reaction in Stirling and the UK rates market was fairly limited as the UK Prime Minister did not call for an end to negotiations. One can interpret the latest comments as a face saving exercise characterised by tough talk, continuation negotiations, beyond the UK government self-imposed deadline of October 15th whilst Stirling fell in response to Johnson's comments, scale of the currency decline was relatively muted considering that no risk premium has been priced into the currency for some time. If the market credibly believed in the threat of a no deal Brexit, Stirling would have traded materially lower. What I'm looking for now in terms of the UK and EU trade negotiations, they're likely to continue next week with rhetoric coming out from both sides. On the data front, we should see a modest uptick in both headline and core UK September CPI released on Wednesday from the rather depressed levels. But with price pressures remaining low, the extension of QE in the November BOE meeting looking as a done deal and the odds of negative rates to be primarily driven by the outcome of the UK-EU trade negotiations, the UK data should have limited impact on Stirling. What I'm looking for now is Stirling to continue to trade within its range of the 12650 to 13050 area. I'm looking for a slow grind into projected ascending trend line support now coming in at this 127 handle before then we have the potential to retest price cycle highs 134.85 on route to an ideal 136. Dolly En remains trapped in very tight ranges and certainly is trading a non-correlated pair with global recovery. It's hard to see that changing unless the threat of a contested election becomes more real where traders would then even choose to avoid the dollar as a safe haven currency. Flow reports suggest a large amount of foreign bond buying by Japanese residents in the last report in weeks suggesting a 105 level remains an attractive area to go into the overseas assets. Let's see whether those purchases are repeated in this week's industry of finance portfolio flow data. The Japanese data calendar is light but should culminate in another minus 0.4% year on year reading in core CPI confirming very little progress in Japan's multi-decade battle against inflation. From a technical perspective, as we hold 105, I'm looking for an equality move initially testing ascending trend line support 10660 on route to an ideal 107 test. Breach of 105 would certainly open a move down to 10435 before another attempt to move higher. In Australia, the combination of Australia-China trade tensions and rising chances at the Reserve Bank of Australia will add more stimulus soon, approving to be a toxic mix for the Aussie dollar and in an already unsupportive environment for risk assets. On the first factor, it's still too early to understand how much the Chinese ban on Australian coal was indeed part of Beijing's protectionist agenda or whether diplomatic tensions were the main motive. Should the latter be true, the threats of more Australian exports being targeted may be a narrative for the coming weeks and may undoubtedly weigh on the Australian dollar. Looking at the second factor, the RBA Governor Lo's hint about the extension of bond purchases could prove to be more impactful and many think that a move will come at the November 3 policy meeting. Australia's 10-year yields dropped below 75 basis points for the first time since April on the back of the announcement. But there is still likely some sizeable downside potential for rates markets if markets fully buy into the prospect of the RBA buying 10-year bonds. Next week we will get clarity with the minutes of the RBA policy meeting released on Tuesday and a speech by Deputy Governor Guy De Bell. All in all, the Australian dollar now seems highly vulnerable to more risk appetite contractions, really more than any other G10 currency at this stage. So from a technical perspective, as we hold 72.40 cents as a potential B wave high, I'm looking for an equality move down to test 68.35. Again, I've got this date towards the back end of this month, at the beginning of November, where we should see a shift in terms of sentiment across the board reflected in the dollar. But for now certainly, as we hold 72.40, I look for a break of the 70 cents level to set up this quality move down to 68.40. As always, please join me on Thursday for my live market analysis session where I go into more details about the charts. As always, have a profitable and safe trading week ahead. Thanks very much.