 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's supply and demand forex and gold fundamental and technical analysis. I hope you had a great trading week last week, and if not, don't worry. There's always the next few weeks, months and even years to improve and get your equity curve growing. Don't forget to like, subscribe and share if you like the content I provide every week and let's really get into the analysis. So starting off on the week ahead, going to the Trading Economics website. Zoom in a bit, one second, let's zoom in. And in the week ahead, after last week's last week's sell off in equity markets, US investors are paying close attention to several speeches by the Fed officials, including Fed, Chair, Power, Testimonies before the Senate Banking Panel and the House Financial Services Committee. So why is that important? Because the Fed is going to give guidance as to what they're doing with monetary policy. And so it's always good to maybe get some maybe some potential new information, because really, that's the reason why the markets are focused paying attention on Fed officials, because that's what really moves the market. It's not, you know, price is not. It's just a reflection of, you know, fundamentals and liquidity and value. So also flash PMIs, surveys for the US, UK, Eurozone, Japan, Australia will be closely watched. Finally, CPI data for the UK, Canada and Japan is set to be released. So let's see what happens this week, but let's go on to the charts and a bit more in depth fundamentals as to what happened last week and potentially what may happen in the future. And starting off on the Dollar Index and the Dollar Index, just a measure of dollar strength against various other currencies like the Euro, the yen as well as the pound as well, right? So quite a large demand zone there. This is a daily timeframe chart and looking at where, you know, what the dollar has been doing. It makes sense really for the dollar to keep going higher, especially in the short term. Any pullbacks I think of buying opportunities. The Fed pretty much have hiked rates by 75 basis points with the same again in July ING thinks that the Federal Reserve has increased rates by 75 basis points and has a signal to willingness to maintain its pace of tightening at the July's FOMC knee. And so the Fed funds rate will end the year well above the 3% target with a dollar set to stay strong, but moving harder and faster comes at economic cost rising recession risk means rate cuts will be on the agenda for summer of 2023. So they're already thinking about 2023. And yeah, so there are potential recession risk, but not for now, not again until the summer of next year. So maybe about a year's time and maybe you're going into next year, the beginning of next year, you may see the dollar start, economy start to go into the contraction phase doesn't mean it will go into a recession. But for now, presently in the short to medium term, the next three months or so, unless the data comes out, you know, absolutely terrible. You know, my bias is still to continue to buy the dollar so yeah, there's really nothing changed in my fundamental bias. So any pullbacks into zones are buying opportunities, not necessarily buying on the dollar index per se, but just using the dollar index as confidence. And I think I had another I didn't I thought I had another new story, but pretty much that's that's it from a fundamental perspective again, understanding where the value is and potentially going to be. It's really for dollar buys. So if you are looking to buy or sell the dollar for whatever reason, maybe you want to go counter to, you know, what everyone else is doing in the medium to long term, there is a bit of a supply zone. They're not the strongest area of supply. I could just be profit taking who knows, but it's pulled back. So it's, you know, near as high as but if there is any pullbacks, I think for me, that'd be really kind of buying opportunities on not dollar index, but the dollar yen dollars, not even the dollar Swiss, I've changed my bias on a dollar Swiss, we'll get to that in a sec. But I'm looking at the dollar yen. So dollar yen pulled back a bit. I know on the daily on the on the intraday timeframe, traders might have been saying, well, how comes the dollars, you know, sold off after the 75 basis points, you know, hike. And it's really because it's for the liquidity, right? So just on a really kind of basic level and understanding why price moves in the short term, it's generally for liquidity purposes. So if you have, for example, you know, everyone wants to get long, right? The smart money understand what interest rate hikes typically do for a currency and retail traders, you know, are obviously catching on, right? The ones that do understand fundamentals as well to a basic level. Now, everybody wants to buy. Yeah, now, if everyone wants to buy, the liquidity is the sell orders, right? So in order for there to be buying, you need sell orders to facilitate the amount of buying that needs to be done, right? So if there's not enough liquidity, they're not enough sell orders above the market, right? To facilitate the buying for liquidity, then the market has to search for the liquidity below the market, right? And if you're buying, you know, your stop-loss order is a sell order. Yeah, this is where the liquidity resides. Hence the reason why you get these moves. You can get these moves to the downside and then all of a sudden it goes to the upside. So traders, it draws traders in. It has the also the effect of not only triggering stop losses, but drawing traders in to go short. All those technical traders who, you know, follow things like Elliot Wave and, you know, momentum and stuff like that. They start to see these big moves, start to fomo into going short, yeah? And that induces more sell orders because they're pressing sell to get short on this, right? And then who's taking the other side of their trade? Again, the people that want to buy for cheaper, they don't want to buy up here. That's expensive. They want to buy down here. So that's what happens in the short term. You know, forget all that nonsense about, you know, technical analysis and being able to read certain things. The thing is really nobody knows what's going to happen in the short term, right? Yeah, there are patterns that repeat themselves, but ultimately it's all driven by liquidity, which is the reason why you need to understand, you know, key levels, supply and demand to a, I guess, a more advanced level, because if you don't understand this, then you're always going to get caught on the wrong side of the market just following price because price. And I wouldn't say this is a manipulation. This is more just a function of how the market has to work. But if you don't understand this and you're just following price and saying that's a big move and then you're going to want to try to go short there or shorter levels because you're looking at lower highs and lower lows, you're just going to not understanding the bigger picture is that the dollar is they've just hiked rates, right? And they're looking to buy for cheap, yeah, which is what the smart money did. Then you're just going to keep getting caught on the wrong side of the market constantly. So combining fundamentals with technicals and understanding liquidity, at least in the short term, is what needs to be advantageous to your trading over the medium to long term. Anyways, and that's really what's happened here. So I don't know what saying that prices are going to continue to go higher. And you know, nobody knows what's going to happen week to week, but generally the path at least was just that it should be to the upside, right? It should be to the upside. Now I wouldn't be surprised if prices did pull back to, you know, get more liquidity, right? Draw more traders in. Again, the smart money is already bought down here, made some money on the upside. People tend to fomo in seeing large candles and then it just rinses and repeats, man, but they're not on the timeline that you're on. They can, you know, rinse and repeat for days and weeks. Right? See this down move here, right? It lasted four weeks. But guess what the smart money was doing? They were just buying, buying, buying iceberg orders. You can Google iceberg orders, you know, hiding their, their big orders because they understood that they wanted to go long, right? Based off of, you know, policy, monetary policy divergences. That's what, you know, the smart money are doing over the medium to long term. Whereas, you know, retail traders and day traders looking at week to week trading, the smart money is looking at just the path at least resistance over the long term. So yes, prices did, you know, go down. But ultimately, when you're looking at where prices ended up, it's, it was always prudent to try to go long, you know, at, at specific levels. Anyways, my bias is to the long side. So still until the, the bank of Japan, who are really the last bank, central bank, major central bank anyway, to start to look to high crates, unless they start to change their tune, then I'm still long on the, the, the, the dollar yen. So until that time comes, it's probably just pull backs into any kind of demand zone. This is a demand as well, but it's not, I wouldn't say it's a strong area of demand at all. Although intraday, you can probably get away with trying to trade maybe around the one, the one, three, two areas, one, three, yeah, one, three, two to one, three, one, 50 or so. And then there's your, again, your, your, your supplies only if you want to get involved in that. Moving on to the dollar Swiss and the Swiss Frank ended up, the Swiss National Bank ended up surprising the market, wrong foot in the market with the first interest rate hike in 15 years, totally wrong footed traders. I was actually looking to buy the Swiss Frank before this, but I needed them some confirmation from the central bank. I got it, but it was just obviously a bit too late to take advantage of the immediate move. But my bias now for the Swiss Frank is to the long side, but not really against the dollar, but against weaker currencies. But we are now down at these, these lows and where there was demand here and there was that supply zone from obviously last week. But, but yeah, you do want to be a buyer of the Swiss Frank against the dollar, then really waiting for prices to kind of come back up here, which wouldn't be a bad shot to be fair. I think if the prices did come up here, I can't really see the dollar going much further than this, this area here. If you don't want to be a buyer of the US dollar, then that's going to be the first opportunity, but I'm no longer interested in, in trading this currency pair anymore because the fundamentals have, have changed. But those are really the levels to look for if you're looking to buy or sell either currency, dollar CAD, dollar CAD again, not really interested in, in trading this pair simply because you've got two central banks that are looking to, that are hiking rates. Most central banks are hiking rates. So not to say that they're slim pickings, but there's definitely lots of pairs to trade, but that kind of goes beyond what I'm showing you in this Sunday video. But yeah, the dollar, again, the dollar CAD isn't really a pair that I'm looking to take, but if you are looking to get short, then I think now is actually a decent time to look for any kind of short trades. If you're going to buy the Canadian dollar, if you're looking to buy the US dollar, then pull back into that one, two, nine, one, two, eight, fifty area or six free area is going to be the first area you wouldn't look for potential for a buy. The New Zealand dollar, US dollar, I do think that there's actually an opportunity to go short on this and buying the US dollar. If prices do come back that high anyway, sorry supply, yeah prices do come up back up here. I think there is a potential opportunity to get short. Probably more look for a stop hunt around that level, but it's, and that's really because I think the New Zealand dollar may have some economic issues in the, at least in the short term anyway. There was demand here, really a nice technical setup if you wanted to buy the New Zealand dollar, but I don't know where the prices will really make their way a lot higher. New Zealand dollar is still, you know, their Central Bank are hiking rates, but I think they've, economically they've stalled a little bit, so I'm not too keen on the New Zealand dollar, although I will buy it against maybe some other currencies, but it's down the pecking order on my list of currencies to trade. Moving on to the pound dollar, the pound dollar, I am still short on this, been saying if you look back on my weekly videos, I've been saying to probably get short on the dollar from around early April and you can see, you know, what's happened. So I do want to get involved on the dollar, sorry, the US dollar against the, that goes there, against the pound, the pound are, you know, the UK economy is really, out of the major economies is probably one of the ones that is doing, not doing so great. Let's go to the Bank of England or was it, that's it, that's the one. So Bank of England resists pressure to follow the Fed into faster tightening, so the Bank of England is stuck to its, stuck to its guns and hiked rates by another 25 basis points, resisting the pressure to go faster. So I think the expectation was for them to do a 50 basis point hike, but the hawkish spin in the policy statement suggests a 50 basis point is entirely possible in August, but the bigger signal is here is that a pricing, a terminal rate closer to 3.5 next year, markets are overestimating and tightening still to come. So I think they may be trying to jawbone the rate hike. Again, high inflation going higher would probably indicate that they probably may have to start to hike rates a lot, you know, a lot, a lot more in so far as a bigger rate hike, but again this is at the risk of pushing the economy into a recession sooner, because the recession has, the economy has to be able to support rate hikes. So if it can't, then obviously there's problems, right? Now there is a Bloomberg article that says Bank of England and SUNAC set to step up fight against inflation and so, you know, Britain's policymakers are hardening their attitude towards inflation, preparing to deliver a tough dose of medicine at a time when a cost of living crisis is weighing down on, weighing down growth and consumers. So at the moment we're suffering from stagflation, although people don't want to say it, but there is stagflation worries, the economy contracting and higher, higher inflation. If you want to know what stagflation is on my YouTube channel, if you type in stagflation in the search, then there is, and if you search in the channel, the last few videos, I think I've released a video which basically explains and breaks down what stagflation is and what the effects are, but I do think that the UK economy is probably one of the worst when it comes to dealing with the inflation problem. So I think any pullbacks are going to be nice shorting opportunities. There is demand here, but not really something I'm interested in, not at all. We're probably waiting for a pullback up here or there's probably some sort of intraday stop-hand trade that I'm interested in around these one, two, four, 1.2407 area. Euro dollar, Euro dollar, so Euro dollar is an interesting one. The Euro, the ECB held an emergency meeting on Wednesday to avert a debt crisis, debt crisis 2.0 and it takes, so basically the ECB, the headline is the ECB tool to avert debt crisis, 2.0 takes a take shape as a market on edge and so policy makers are working on measures to avoid a bond turmoil. So it's quite a complex thing and it gets into kind of bonds but a very long story made as short as possible with the fact that the Euro, the European Central Bank are trying to avoid a fragmentation of Europe. So they're looking to hike rates in in July and but because the European Central Bank have 19 economies and countries to worry about, hiking rates isn't as simple as say hiking rates in the UK or in the United States or Switzerland or Canada, right, where you just got one single economy. If you hike rates it might benefit for example Germany or France but you know in maybe somewhere like Italy or you know Portugal a rate hike might not be the right thing to do, it might tip them into a recession sooner, right, which may drag everyone else down. So they're basically creating a potential tool, a financial tool to help to prevent that fragmentation. That's the long story short. So they had to hold an emergency meeting because you know the bond market is very sensitive to interest rates as well as inflation. So as our currency is right so the two are in to link those two asset classes. So understanding that the European Central Bank have got a lot on their hands at the moment. So for me at least until you know certain things are sorted and I personally again still you know shorting the euro although my bias will change once the European Union and Europe start to sort themselves out if they ever sort themselves out, right. So any pullbacks for me are shorting opportunities up to you know the 107.5 to 108. I think anything around there is decent, there is another level above that as well probably somewhere around there. I think the limit of this move is going to be around the 109s possibly the 111s I think. But either way I'm not going to go long on the euro. Any euro rallies for me are shorting opportunities so that's my bias. If you do want to go long on the euro for whatever reason there is you could look at this area as an area to look for any kind of long trades. I mean the move is already happened now so you know if you wanted to get long then it was really you know down here at demand zone. Any kind of pullbacks is decent but the more times the level is touched the weaker it kind of becomes so it's not really something that I'm interested in. I'm not looking to buy the euro anyway until there are some monetary, well I wouldn't say monetary policy but I would say more economic changes. Aussie dollar and the Aussie dollar I'm not looking to trade this pair but if I was a difficult one I'd have to say probably the US is still the one to buy but just barely, it's pretty simple I would say just if you want to be a buyer of the Australian dollar then you're looking for pullbacks into a demand zone if you're looking to be a buyer of the US dollar which also is well benefits from risk sentiment as well risk off sentiment which there is a lot of risk off sentiment. The dollar does tend to do well so but you know you're looking for either a pullback up there or if prices break through that demand zone any kind of pullback to supply would be nice and that would be where the supply zone would be. Aussie yen and with the yen still being in the bank of Japan still being quite dovish, our bias is still to the upside on this currency pair I think it really starts from around the 90.22 but let's see what happens I think there is an opportunity intraday to get involved I'm not going to go over this setup but it's somewhere around these 92 areas but from a daily demand zone perspective I think that's decent for a potential buy yeah I think probably the lower and the 87 if you can get down there that would be very very nice if you're looking to short then the 95 91 area to 9688 will be the one to the level the supply zone to look for any kind of short trades moving on to finally the gold right and gold again it's been a bit of a strange one there was again there is some daily demand there daily demand zoom out a little bit yes there was a bit of demand there as well so yeah gold for me is still a is still a buy last week I spoke about central banks to increase their gold holding holdings over crisis concerns so central banks are buying gold you know and again the cheaper it goes then the more they're probably going to end up buying and there was an interesting article as well from gold's floor prices getting higher top producer newmont says the support is firming it around the 1,500 to $1,600 CEO Palmer says CEO says prices around the current levels in the next year or two which is a bit negative for gold I guess and then the head of the biggest producer isn't about to join the bullion bugs in predicting a price value but Tom Palmer does see a higher floor forming under the market as years of stimulus dissolve into a fight to contain inflation and basically he says that the as global markets will on fears of stagflation gold has stayed relatively resilient given its haven status price prices are set to stay around the current levels of $1,800 an ounce or even a little higher amid inflationary economic and geopolitical uncertainties says newmont newmont corporation's chief executive officer and that's downright conservative a downright conservative view amongst industry peers who have been predicting a much higher price after an unprecedented period of fiscal and monetary stimulus but Palmer is willing to project more support when prices did previously the floor was around $1,200 and now it's probably more like $1,500 or $1,600 he says so looking at a price chart he thinks that probably somewhere around these levels here down at the uh technically it makes sense I guess you can see where there was definitely strong buying around here these are the $1,600 I don't know if $1,500 right that would be basically where the when the pandemic happened that's April 2020 so prices do go down now I'll be very surprised but you never know again the central bank's buying and they're buying for the long term so you know I think gold should be supported at least down around this 1677 area so let's see what happens so there I think gold is supported even way with higher inflation and then if gold if there's a recession next year or you know the world starts to contract well the economy starts to contract then gold is still a buyer right so either way you slice it gold should be supported based off of the risk of sentiment so let's see what happens I think there's definitely a nice buying opportunity any pullbacks around there in today or even on daily I should say and then you've got this supply zone right here as well quite a wide one but it's there supply let's keep in a cap on gold at the moment so with that being said I think that's this week's fundamentals and technicals done I hope you have a great trading week again don't forget to like subscribe and share with your fellow colleagues as it's a free way to support the channel and I hope you have a great trading week and all the best until the next video