 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com, a welcome to this week's supply and demand, Forex and Gold, Fundamental and Technical Analysis. If you're new, a warm welcome to you, and if you're returning, an equally warm welcome to you. And for those of you who were expecting a video last week, unfortunately, I caught COVID, so couldn't make a video last week. But I'm back this week with the usual weekly analysis. Please don't forget to like, subscribe and share the video content with your colleagues and just support the channel, I guess, freeway to support the channel and get the quality content out there to those who will benefit from both fundamental and technical analysis to really make the best trading decisions. Anyways, let's get into the week ahead. And I guess I'll zoom in a little bit. Week ahead in the US, the center stage will be taken by the latest FOMC meeting minutes, retail sales and housing data. Elsewhere, the investors will pay attention to inflation figures for the UK, Japan and Canada. Other important releases include ZEW, Economic Sentiment Index with Germany, Industrial Production for China, Unemployment Rates for Australia and UK and Second Quarter GDP Growth for Japan. And there are some devils in the detail when it comes to the specifics. And I definitely advise you guys to go to tradingeconomics.com and basically have a read up on the specifics and what's happening this week. Also as well in Australia, outside of obviously the major three currencies, you've got Australia Unemployment Vigas will be released, RBA will divulge minutes from its August meeting, sharing insights behind essential banks, 50 basis point rate hike. In the meantime, the RBNZ, the Reserve Bank of New Zealand, is expected to raise its official cash rate by 50 basis points as well. So definitely worth keeping an eye on if you're trading those currencies. Yeah, so let's get into the charts and some more fundamentals and looking at the dollar index. The dollar index has been an interesting one. Last week, or say the week before, I was saying that I'm still a buyer of the dollar and looking for some opportunities. And the dollar, when we look at recent inflation data, it came out as coming running cooler as far as inflation coming down. Now, one of the things that you have to understand if you're watching this and you're thinking about, you're not too sure about inflation and interest rates and how it all works in the economy. I have a free webinar on YouTube. It's called the Fundamental Analysis webinar, the three steps to generating a profitable forex trade ideas. And it really kind of breaks down the rules to the fundamental game, right? The why inflation, interest rates and GDP are really the why you should understand the relationship between the three and how central banks dictate monetary policy, right, whether they're high, cold or cut rates, based off of those three macroeconomic data points. So, and that creates either demand or supply for a currency and appreciates or devalues a currency. So it's important to know, you know, why when inflation goes higher and above the 2% target that central banks have to high crates and if it goes below their 2% target, inflation target, then central banks generally typically have to cut from where they should hold. Otherwise, you really are at disadvantage when it comes to understanding what pairs and currencies to trade. Anyways, so the inflation figures decelerated in July by more than expected, reflecting lower energy prices, which may take some pressure off the Fed or Federal Reserve to continue aggressively hiking rates. And yeah, it was interesting, but we really need to see a sustained, I guess, pullback in inflation or inflation as it's pulling back needs to be not just a bit of a blip and what you're seeing as well is that Morgan Stanley's chalet warns of head fake in inflation data. So premature for market to celebrate CIO at the firm says. So, you know, inflation, yes, has pulled back, but doesn't mean that necessarily the Fed are going to stop hiking rates or looking to even cut rates, which is on the cards probably next year. But for now, all the data is still pointing to the fact that they still will want to high crates. And this is from Wells Fargo. One second. Yeah. So Wells Fargo 12th of August. Again, just this little bit here where it says piecing together the implications of the week's softened and expected inflation data. We've last week's blowout non farm payroll report for the fed's policy path is top of mind for many. The FOMC has made it clear that it needs to see inflation slowing on a sustained basis. Yeah. So doesn't mean that, you know, the Fed are going to stop hiking rates. Looks like they're probably still going to continue to high crates. Hence the reason why I personally am still a buyer of the dollar. But until inflation proves that it is trending back towards a two percent target, right? That would be maybe the the for me anyway, a signal to potentially look to actually start to sell the dollar. But again, there are other things that come into play there as well. And also as well, this is just, I guess, some confluence from a city bank. And city bank are pretty much saying that if you look around here, the triggers for a sustainable. And again, there's that word again, sustainable DXY, a dollar index reversal would need to be for the Fed to reconsider its current tightening cycle. So again, they would only really consider that current tightening cycle if the if inflation starts to come down and it looks like it's trending back towards their two percent target. So again, if you don't understand what I'm talking about, or you know, you're a bit fuzzy and, you know, just a bit confused when it comes to, you know, inflation interest rates and GDP, then this really is the webinar, watch it's two and a half to about two hours has all the information you could possibly need to get started with understanding inflation interest rates, GDP and really generating profitable forex trade ideas. Anyway, let's get back to the charts. So for me, you know, it's just a case of, you know, buying the dollar on pullbacks. And so using the DXY dollar index as confluence, it's just a case of looking at, you know, pullbacks into certain zones and then using the trading the maybe something like a dollar yen or a dollar, maybe a dollar Swiss not really a dollar Swiss fan at the moment, we put a euro dollar and pound on a short and using the DXY is to basically just just confluence. So for me looking at still buy trades. If you are looking at sell trades, then in fact, there is a supply zone around around here, quite a large one, but pretty the better area would be the fresher area of supply around a 107s before looking at getting short. But yeah, again, using that as confluence, I personally wouldn't necessarily short the dollar regardless, whether it comes down this week. I'm looking at more medium to long term trades as far as, you know, what prices are likely to do over the next month, two month to three months. Anyways, moving on to the dollar yen and the dollar yen. Again, after the so-called, you know, technical recession, we did have prices start to go down. Again, I did was saying that I'm going to be a buyer of the dollar and we did see, obviously, the dollar come higher, pulled back a bit and it's it came down to a nice so matter of fact, but didn't quite get an entry this week, wanted to come down a bit lower to the one three one fifties. That's what I was really looking for. If it does come down here, then I will be a buyer of the of the dollar yen. I say it will be, but it depends on the entry and whether it gives me an entry. But that for me now is starts to be a decent demand zone. If you are looking at sell trades, then you have got a supply zone right there. So any pullbacks into this area here is decent for a sell trade. If you're looking to think the Japanese yen is is a bargain at these prices, the one three five one three five fifties. Moving on to the dollar CAD and the dollar CAD strength and sorry, sorry, the dollar Swiss, sorry, the Swiss has strengthened against the dollar, you know, risk of sentiment, etc. And it's not really a pair that I'm interested in because you really do have two central banks that are looking to hike rates. The Swiss National Bank is hiking rates as alongside the US dollar, whereas the dollar yen, the Bank of Japan are not looking to hike rates at the moment. So for me, again, understanding divergences and monetary policy divergences, the easier trade is the dollar yen. Any pullbacks, if you want to be a buyer of the US dollar, then that's where you should look for a sell trades, I'm sorry, buy trades. If you're looking for short trades on this currency pair, looking to buy the Swiss Frank, any pullbacks into that 95 50 area is where you're looking for a short trade. Moving on to the dollar CAD, dollar CAD, CAD strengthening against the US dollar at the moment. And again, maybe just maybe some sentiment. But again, not really a pair that I'm interested in fundamentally because you've got two central banks, hiking rates. And it's not just really about the hiking of rates, because some hikes in rates aren't always positive. There are such things called dovish hikes. But if you are looking to get long on this currency pairs in by the US dollar, then I think you'd have to really kind of wait for prices to come down to this demand zone or prove that there's demand right there and then wait for a pullback down into the zone and then look for a buy trade there. If you're looking for a sell than anything within this supply zone, looking at sell trades, but again, with more risk off coming into the market in the market, I'd probably say the dollar might be the buy out of the two, but again, not really a pair that I'm interested in. New Zealand dollar US dollar. I think the, the hike that the New Zealand dollar were looking to the RBNZ are looking to do this week is being priced in. So yeah, a little bit of dollar weakness, I guess, and and the pricing in of the of the New Zealand dollar rate hike. I think this might be a decent buy the rumor sell the fact type of trade. Again, not really interested in this in trading this pair simply because I'm actually a buyer of the New Zealand dollar against other currencies. So and if I was going to be a buyer of the New Zealand dollar, definitely would not be against the US dollar, not right now anyways. So any pullbacks I think a decent buying opportunities technically, or if you want to buy the New Zealand dollar against the US dollar, if you want to buy the US dollar against the New Zealand dollar, then you're looking at a pullback into this 65 area 65 50s for for a bit of a sell trade. Moving on to the pound dollar now, this is something that I am interested in and pound fundamentally is isn't doing great. And we have UK economy shrinks for the first time since COVID lockdown in June's reading stronger than expected but may revise down and the UK economy shrank for the second quarter for the first time since the pandemic driven by decline in spending by households and on fighting the coronavirus. We sure are fighting that coronavirus. So it says David barrier head of research at the BCC says the UK economy is moving in an alarming direction. Yeah, while some consumer facing industries have benefited from further withdrawals of COVID restrictions on travel, the retail sector saw 1% decline in the quarter reflected in unprecedented pressures from inflation and global supply chain disruption. So it's not looking great for for the UK and the pound is something that I am looking to to short and then in world now from now next coming months. So looking at well against the dollar anyway, and any any pullbacks into it is so not just waiting prices didn't come up high enough for me to get involved in a bit of a stop on that around that 123 area. But if prices do come back, I'm looking to get involved in that trade to the short side or any trades. If prices do pull back into into this zone this 123 to 124 area for any short trades. If you are a buyer of the pound and you want to be a buyer of the pound, then you do have I guess a bit of a demand zone right there. But yeah, not the strongest area of demand there. But yeah, maybe the one year one 2080 area for a decent buy trade. But if you're looking at where we are in terms of what's expensive and what's cheap, then you're looking really I think the lows are going to be the 118s 117s are going to be the best area to look for any kind of buy trades. Moving on to the euro dollar and the euro dollar is again something I'm interested in selling. There was a bit of a supplies and that has been touched several times. And as we know, the more times the level is touched the weaker it becomes. Now fundamentally, Europe, I think everyone's in the pretty much the same boat. But interest rate hike for wires, the ECB will limit interest rate hikes to this year. Only HSBC says and the European Central Bank will stop hiking interest rates after the end of 2022 when a euro area recession and easing price pressures will restrain monetary policy tightening according to HSBC cuts to Russian natural gas supplies and result in surges in energy costs will drive inflation higher than previously expected to a peak of 10% in October HSBC economists, double digit inflation led by Simon Wells said Friday in a report to clients, the squeeze and household incomes will make a recession probably unavoidable. And so we also have a bank MEFG are also looking to, you know, opened up a new short euro dollar trade. And they're adding to euro dollar shorts, you know, with Europe risk set to continue to wait on FX performance. So this is this is their analysis of again, who's got the who's the dog with the least fleets, right? So meaning that who's the who's the best of the worst? And it looks when you're comparing Europe with with the US, it looks like Europe are in a worse situation than the US, which would continue the, you know, the continued downturn, right, not saying it's going to go do that this week, it could go higher before it goes lower, right, but overall, the Parfoli resistance is probably still to the downside. And let's obviously certain things change. And and again, that would be things like the Nord Stream Pipeline. So going back to Citibank, you know, any, any, you know, changes in euro dollar shorts would be, you know, for the threat of Europe's economic recovery from Russia to clearly subside. So if that starts to happen, then you probably might want to actually look for any kind of euro buyers because there will be probably a bit of a rally on Europe if they can, you know, survive economically from Russia's Russia turning off the tap. So my bias is to the downside still. But if you do want to be a buyer of the euro, then you're looking at probably the bottom end of this demand zone to look for any kind of long trades there or right, you know, again, around parity for any kind of long trades to the upside. Aussie dollar, Aussie dollar has just made, gone from strength to strength, the Australian dollar is doing decent economically. And yeah, so we're seeing a bit of a pullback as long as your pullback to be fair. And but in a straight fight, probably we'll see the US dollar in a risk off environment should, you know, should strengthen and there should be a decent if you do want to get short on this currency pair, short on the Australian dollar, that would be a decent area to look for any kind of short trades for going to be a buyer of the Australian dollar. Any pullbacks down to this 70 cent area is decent for a buy. Not really much to say about that. Although I'm a buyer of the Australian dollar, I'm not a buyer of the Australian dollar against the US dollar. So not really a pair I'm interested in. Aussie yen, I am interested in. And again, some of the guys have been doing really well in this trade. We was talking about this or my bias anyway, to buy the Aussie dollar. And we did get a bit of a spike below taking out all the stops and we've made higher highs, higher lows since. So buyer of the Aussie dollar, one second, there actually has to cover the whole spectrum right there. So yeah, any pullbacks into probably say this area here. Well, you've also got support and resistance with supply and demand. So this 92 round number is probably going to be decent for a pullback and then a decent buy. Providing obviously the Japanese yen and the Bank of Japan is still looking to maintain their dovish bias on the yen. So yeah, any pullbacks I think into a zone, I think the 93s is a bit too much of a shallow pullback. I think probably the 93s is there going to be the start of it down to 92s to get anything. And even the 91s would be an even better price. I think that would be a very nice trade technically if prices do come back down there. But if you do want to be a buyer of the Japanese yen, you know, risk sentiment can shift then pretty much now and even up the highs I think are going to be decent sell trades technically to buy the Japanese yen and gold. So gold has rallied a bit on, I guess, global recession fears. I was saying again a few weeks ago that you know gold was a buy and you could pretty much see what's happened, right? A decent area to look for buy trades on gold. If we're looking at one second to go forward, if you think that the dollar is weak, I guess one of the things that you should do is maybe if you don't want to sell the dollar look to buy gold and I think a pullback into that 176 round number is going to be decent. I think if it does come all the way down to the 1700s, I think anything around there and it just below it is going to be nice as well. So as we head into next year, as we head into next year and potential recession fears, a lot of the smart money, if you go back through my previous videos last couple weeks and look at the gold analysis, I was explaining this and breaking this down that the smart money have been buying gold as prices have been going lower and lower, right? They don't buy like how retail buy, where they're just trading with tight stop losses and day trading, they're accumulating over the long term because they understand that in the next 12 months, for example, if the world is going into a recession and central banks and have to potentially look to cut rates into 2023, which is only maybe less than five months away now because we're in August, the smart money we're buying well before the retail and I think prices on pullback should definitely be buying opportunities, even if you're buying just physical gold, etc. But yeah, that's pretty much it. I think I'm definitely a buyer of gold on any pullbacks. So that's my bias for the medium to long term. Anyways, guys, that will be it for this week. I hope you have a great trading week and speak to you all soon.