 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's supply and demand for what's in gold, fundamental and technical analysis for the week ahead, starting the 13th of November. So in upcoming week, the focus in the US will center on the eagerly awaited inflation rate data with retail sales and speeches by Fed officials, also taking the spotlight additionally, attention will be directed towards producer prices, industrial production, export and import prices, as well as building permits and housing starts internationally. The UK, in the UK, investors will closely monitor inflation rate, retail sales and unemployment rates, a lot going on in the UK. The week will also unveil Q3, third quarter GDP growth rates for Japan. And finally, Germany will release ZEW Economic Sentiment Index and Australia will provide updates on both Westpac consumer confidence and NAB business confidence and that's from TradingEconomics.com. So lots of potential catalysts, fundamental catalysts for price this week. So looking at the charts, it's really starting off on the dollar index and last week we did have some news that came out with regards to non-farm payrolls and I did think that prices would start to maybe this in the last week kind of come down a bit before being a buyer but it looks like prices ended up, you know, reversing straight away from Monday and didn't look back. I know a lot of traders were, you know, definitely short and so my overall bias was it's still, you know, long dollars but I thought like in the short term prices may come down to certain levels before looking at long trades. So this week didn't really get into any dollar trades although there was definitely an opportunity to or lots of opportunities to one on dollar crosses but this week I think any pullbacks on the dollar are definitely buying opportunities. So looking at the dollar index, what you're looking for is and again you would use the dollar index as more to do with confidence is really kind of a pullback into, you know, a bit of a demand zone before looking at going long and to kind of support that bias is the fact that we have and let me just take this off, it says stubborn core inflation helps explain some Fed restlessness. So underlying price pressures, inflation pressures are seen advancing at a pace that backs apprehension among Fed reserve officials to signal all the all clear in their inflation fighting efforts. And so core inflation is, you know, maybe going to stay a bit sticky says is while considerable progress has been made since hitting a multi decade high a year ago, the pace of inflation remains elevated and above the Fed's goal, which is around 2%, having paused tightening at consecutive meetings, leaving the benchmark rate a 22 year high policy makers are proceeding deliberately and not ruling out further increases. So they're you know, they're they're a bit hawkish because of the fact that inflation hasn't necessarily come down as much as they would like. It says here that if it becomes a quote, I think from Jerome Powell says if it becomes appropriate to tighten policy further, we will not hesitate to do so, Chair Jerome Powell said on Thursday, we will continue to move carefully, however, allowing us to address both the risks of being misled by a few good months of data and the risk of over tightening. So it sounds a bit hawkish or more hawkish than dovish for sure. And so that should support the dollar at least in the short term if the data does come out and inflation remains sticky this week. So for me, any pullbacks on the dollar potential buying opportunities, but if inflation does come out and it comes in lower than expected, then it really kind of takes rate hikes off the table and then you'll probably get maybe a follow through to the downside on the dollar. But I don't think it will be, you know, the beginning of any kind of dollar trend to the downside or anything like that because there are currencies that are in a much worse position. So moving on to the dollar yen and again this week, I was waiting for prices really to kind of pull back into, you know, these zones before looking at the potential for a long trade or an opportunity. I think the yen at the moment, there is some news out or supposed to be out this week with regards to GDP. And I think that if again that kind of supports the monetary policy change from the Bank of Japan, then that will definitely be supportive for the yen. But buying the yen at certain levels to the downside or buying the dollar at these levels within this kind of wider area of demand wasn't necessarily a bad, you know, play. It's just obviously starting Monday prices just went to the upside. Now we are in an area where you can look for short trades right now in anticipation this week. So, you know, not only do we have, you know, core inflation news and inflation news for the dollar, but we also have GDP news for the yen as well as balance of trade. So lots going on. I think the path for these resistance is still really to the upside, but the catalyst for buying any of the yen would be better than expected data. And I do think, and I said this last week and I'm going to continue to say this, I do think that the yen is going to be a very good buy in or could be a very good buy in 2024 next year as we get into next year. And as the Bank of Japan or if the Bank of Japan starts to remove yield curve control and increase their interest rates while other banks are not, and they're actually looking to cut next year, then the yen should be really the dominant currency in that environment. So let's see what happens here, but these are really the levels. Or if you're looking for short trades right now, then you can look towards the one five ones or just above there, zooming out a bit. I think the high really, since the last intervention was at the one five ones. So anything above there and even potentially you could look for a stop hunt into the one five twos would be decent to the downside. Looking at the dollar CAD, dollar CAD prices again came down, but were supported at this demand zone, the one three six area. Again, looking for maybe a bit of a deeper pullback before looking at getting long, but that didn't happen this week. So again, my bias is still to look for long trade. So let's see what happens if we do get a pullback. But again, a pullback prices come back down into that zone. But if, for example, inflation comes out really much lower than expected, then you could see, in fact, prices come down a bit more. But I do think these demand zones are potential buying opportunities seen as the dollar from an economic perspective is a lot stronger than Canada. Canada is pretty much on the on the on the border. In fact, let me get a go to trading economics to sex. Yeah. So this is the GDP growth rate for the United States. And if you want to compare, you know, countries. So what you do is go to compare right there, pick a country and then go to Canada, which should be here. And then what you want to do is pick indicator and then look for the same indicator to compare it to. So it would be GDP growth rate right there. And then you can see, in fact, if you zoom in a bit more, you'll see that the Canadian GDP growth rate is currently at zero. Yeah, right there, the black line, whereas obviously we've seen that the US GDP growth rate is currently at I think it's like 4.9 percent. So who's closer to a recession is is really the key thing. So for me, you know, any any any pullbacks on the dollar in terms of the short term, I think of buying opportunities as they are the furthest away from a recession. So that's where my bias is New Zealand dollar, US dollar. Again, a bit of a pullback dollar strength this week. The New Zealand dollar is, I guess, decent. They did have some better than expected growth GDP recently. But I think overall, the dollar should be the one. The US dollar should be the stronger of the currencies. And so any pullbacks into the, you know, the 60 cent and probably beyond should be decent for a short trade idea. But if you do want to get long on the on the New Zealand dollar based really on any kind of dollar weakness, then I think if prices pull back down to these demand zones and then you get like a bit of a fundamental catalyst, then that is a decent buy opportunity down at those lows. Pound dollar. So pound dollar this week after this major move to the upside came into the supply zone and then pretty much sold off right on the Monday straight sold off. And so I know a lot of traders would have been definitely going long breakout traders are caught up at these areas and we're talking about breakout traders. So breakout traders would have been looking at that level in the daily trading that breakout. And now they're caught on the wrong side of the market or they've been stopped out. If they don't use stop losses or move and remove their stop losses. This is what's known as a CPR matter of fact. This area here, capture pain relief. I have videos on capture pain relief so you can have a look at that kind of setup. And I do think that prices do come back up to here. This could be a decent area to look for a short trade, providing, of course, the data supports both selling of the pound and buying of the dollar and talking about the UK. It says here, sorry, I've gone a bit too far. It says UK staves off recession for now with stagnant quarter. So the UK economy flatland in the third quarter defying forecasts for a small contraction and ensuring a recession is avoided this year as strong trade came to the rescue of poor domestic activity. So you can see here that pretty much with flatland, the expectation was actually for a negative growth minus 0.1 percent, but it came in at basically zero. It says here that Britain's Britain is in a stagnation. It is, sorry, is a stagnation nation that has struggled to secure sustained economic growth since the financial crisis. It says James Smith, research director at the Resolution Foundation think tank and falling domestic demand may also help to convince the Bank of England policymakers they have done enough to bring inflation under control after raising interest rates from 0.1 percent to 5.25 percent in less than two years. And so interest rates are definitely having an effect on the economy and contracting the economy. And what Bloomberg Economist says is that the latest GDP data offers some hope for the economy might be able to dodge a recession despite the strain from higher interest rates, though it's too early to sound the all clear just yet. About half the impact of the Bank of England's actions today is still to hit the economy. The jobs market is cooling, while both excess savings and fiscal support are dwindling. In short, the line between stagnation and contraction will remain a fine one in the coming quarters. So though they may potentially avoid a recession this year, there could be a recession next year. And it says here that traders are betting that rates have peaked with the Bank of England expected to begin cutting them from next from August next year. The path remained broadly unchanged on Friday with a 15 percent chance of a 25 basis point increase next month and almost three quarter point cuts by the end of next year. So yeah, so not looking great for the UK at the moment in terms of, again, recessions or just avoiding the recession, which is mildly positive. But overall, again, if you compare where the US is in comparison to the UK, unless the UK is seen as, you know, not only avoiding the recession, but growing, then, you know, the pound could rally. But I think for now, the path of this business is still to the downside when you consider not just the trend, because the trend is as a result of, you know, the fundamentals, right? But, you know, for anyone who is, you know, trend following, you can see where the dominant trend is. So yeah, any pullbacks to these areas and even just above there, I think going to be good levels to look for any kind of short trades. But if there's a reverse in the fortune of the fundamentals, then a pullback into these 120 areas, I think is going to be decent for a buy trade for the pound. But again, you would need supportive fundamental data on that one. Looking at the pound yen and again, the pound yen, I think I'd really want to be a buyer of the yen over the pound at the moment or try to position anyway, simply because of, you know, what may happen next year in terms of a monetary policy change. So as we're coming up into these actual hires, I think anywhere around these hires, the 186s, 187s, I think it's going to be really nice, I think, for a potential short trade. So let's see what happens with that. But if you are looking to be a buyer of the pound and there's some positive data, then I think any of these levels, the 184s, 1837s, and the 1827s are probably going to be the areas to look for potential buy trades. Euro dollar, Euro dollar decent move to the downside, prices popped just above that supply zone but ended up hitting this supply zone here, which was from the 107 50s. And then we've kind of sold off from there with a hawkish fed. Now, the guard was also, Christine the guard was also slightly hawkish, I guess she kind of has to be. But it says here that the European Central Bank, Christine the guard said that keeping a deposit rate at 4% should be enough to tame inflation but officials will consider raising borrowing costs again if they need to. So let's see what happens with that. Of course, the inflation target is 2% and if inflation remains sticky or goes higher then they're going to have to try and high crates. Now, I don't know whether it would be positive or appreciative of the Euro because of the fact that the Euro is in a potential, it was in the contraction phase, the last GDP to come out was at 0.1, minus 0.1%. So hiking in a recession only really kind of contracts an economy or is likely to contract an economy even more. So it says here that weeks after policymakers refrain from further increases for the first time since their tightening cycle began last year, she signaled an event organized by the Financial Times that the central bank is gaining confidence that current monetary policy settings to do the trick. So higher interest rates or interest rates staying at 4% is getting inflation down is the theme. So it says here, the quote is the level where we're at at the moment, if we sustain it for long enough, we can debate that of course will make a significant contribution to bringing inflation back to our 2% target that guarded on Friday if major shocks come up, depending on the nature of those shocks we'll have to revisit that. So again, nobody can predict the future, right? So there could be an energy crisis, for example, there could be, you know, recessionary forces. And so if there is, for example, some sort of energy, you know, oil starts to go back up or energy shocks, a really cold winter that drives energy prices up, energy prices will contribute to inflation. And then if inflation rises, then the central bank may have to start to high crates. So it's important to keep an eye on other markets as well. But we also have here, Mario Draghi, who was the ex European Central Bank, head of the European Central Bank, he says that Eurozone recession is almost sure to happen. So the Eurozone is nearly certain to experience a recession by the end of 2023, former European Central Bank president, Mario Draghi said, according to The Financial Times, speaking on Wednesday to a conference in Brussels organized by the newspaper, he said, the slump probably won't be deep or destabilizing. He said, it's almost sure we're going to have a recession by the end of the year, or by the year end. The FT cited the Ex-Central Banker and former Prime Minister of Italy as saying, it is quite clear the first two quarters of next year will show that. So, you know, not saying it's definitely going to happen. Again, he says, almost sure to happen. Of course, there are things that can, things can be avoided, but in the trading world, we're looking at probabilities. And so with recession fears going on, I think, again, the path of these resistance is to the downside. I'm not saying it's going to go down this week, you know, all the way down this week, nothing moves in a straight line. We could even see prices pull back, but I think any pullbacks, if you've missed out on shorting the Euro, I think a decent opportunity is to look to reestablish short positions. Euro, yen, took actually a small trade here, end up pretty much breaking even around here. But yeah, we're seeing prices go higher and higher now. Again, I think a fundamental trigger on this will be this week. So in terms of looking at supply zones to look for short trades, it's, I think, the nearest supply zone or the nearest level is going to be not until what was this, 2008, I think we've got levels. So you can't really kind of count these areas here. So I think trying to look for short trades, you'd have to wait for proof of value to prove that the yen is selling off and then wait for a pullback into a zone before looking at going short. So that would really be where you're looking at what price actually you're looking for. If, again, the data does support buying the yen, if you are looking at buying the Euro, then you've pretty much got that area there and looking for, in fact, within that area. One of the things you can do is look for an area of support and resistance. So I think that zone right there within that area of demand is decent for a potential buy right here. And then look for intraday. You can look for intraday. If you're trading intraday, of course, for our one-hour entries, we have our strategies of trading 180 to look for buy trades in here, but I'm personally not looking to buy the Euro. If anything, I'm looking to buy the yen over the Euro towards or from now into 2023. And just hoping that the data does support yen buying. Looking at the Aussie dollar and looking at the daily. So looking at the daily, we've pulled back on the Australian dollar. Now there was a rate hike on the Australian dollar this week. I think most people expected prices to go a lot higher. I think that we're now really within an auction. I think that although the Australian dollar is hiking rates, I think they're coming to an end of their hike, but we could see prices move to the upside. Risk sentiment is also having an effect on the Australian dollar. Could be having an effect on the Australian dollar. So let's see what happens there, but this isn't really a pair that I would look towards buying or selling or trading, simply because you've really got two currencies, I think, which are two of probably the strongest pairs and what we should see when you have two pairs that are potentially appreciating, you will get what is known as a range or what I term as an auction, right? Always known as an auction. So that's what I think is going to happen in and around these areas. So we could see if, again, the dollar comes out and inflation comes down worse than expected, or we get some more positive news out of maybe business confidence this week or the consumer change confidence change, then we could see a move to the upside. So, but yeah, either way, I think at these highs or just above these highs in the fresh area of supply, one at 0.654s or around these lows, around the 63 to 62, 50 cent area would be where I'd be looking for buys or sells, but not really looking to trade this pair. Then you've got the Aussie Yen. Again, Aussie Yen came up to really this high, recent high of June 2023. It was an expensive area here and it seemed expensive here, but I think at the moment, again, a tricky pair to kind of trade in terms of risk sentiment and fundamentals, but if you do want to be a buyer of the Australian dollar, look for buy trades just at the start of this demand zone. If you are looking at trying to get short on this, and again, to buy the Japanese Yen against the Australian dollar, you know, you could definitely do it, but I think there are better or there are weaker pairs than the Australian dollar to buy against, like for example, the Canadian dollar. Then you can look for a move back up into this area if you've missed this move to the downside or just above and then look for some short trades. And finally, looking at gold and gold is pulled back after this massive run. Whenever you get a big run like this with really any kind of deep pullback, at some point you're going to get a deep pullback. So if you are a bull bullish on gold, just look at this as a discount, right? So if this is a cheap area, this is a bargain area, and this is an expensive area, yeah? So this is bargain price. Wouldn't anyone who missed out on this move higher would have loved to have got involved in gold at 18-tenths, right? So now this is seen as the most recent bargain. Now this is seen as expensive, right? $2,000 an ounce for gold is now seen as expensive. Why do we know that? Because prices haven't gone higher. If it was seen as still a cheap price, then we would see prices go higher. So, but at this point in time, it's not, right? It's seen as quite expensive. There's profit taking going on, et cetera. So in between an expensive area, right? And a cheap area is known as fair value, right? Fair value is 50% of discounts and premiums. So we're pulling back into what is known as fair value, right? And so I think that, in fact, will start anywhere from now into maybe the 1930s and below to 19-tenths, starts to now look like a really nice area to look for the resumption of buying gold if you are, of course, a gold buyer. So remember as well from a medium to long-term perspective, central banks are now coming to the end of their hiking cycle. And although the Fed is hawkish still in the short term, going into 2024, the expectation is for a contraction in the economy, right? Is for contractions in the economy. And that's not just across, you know, that's not just in the US, that's across the globe. So central banks are expected to now start to cut rates. And so to kind of, you know, help to avoid the sessions. And so because we have economic cycles. And so in that environment, gold could do very, very well. So any pullbacks, I think to gold, with gold for at least a medium to long-term, I think are gonna be really nice buying opportunities. And gold could in fact reach these highs and beyond. So short-term wise, of course, no one really knows the exact turning points of things. You know, we just speculate on gold and manage our risk or not just gold, but anything, but overall fundamental should, if they do play out, then we should get a move to the upside at some point, whether it's in this demand zone or this demand zone. Of course, no one truly knows 110%. The collective will of the market, right? So that's it for this week. Hope you enjoyed the analysis and found it useful. I hope you have a great trading week. Until next week, take care and speak to you soon.