 Hi, my name is Leon Rowe currency trader and trading coach at trading 180 comma welcome to this week's supply and demand Forets and gold fundamental and technical analysis if you're new or welcome to you And if you're returning an equally warm welcome to you and please don't forget to like subscribe and share the content that I provide Press that like button. It does help get the YouTube algorithm to recognize that this is good content and Get to up the charts, right? So we're gonna start off on the week ahead and Let's look at what's going on and what's potentially coming up So the week ahead the fourth quarter running season So that's with the with the stocks and elsewhere central banks in Japan. This is what we're focused on Japan and So basically Japan will be deciding on monetary policy while the ECB European Central Bank will be publishing meeting Minutes and that'll be important. So again It's it's looking at what the European Central Bank is saying about things like inflation and what they're going to do with regards to The economy etc, right and continuous potential monetary supports or a reduction and that is important because it has the effect of Increasing the value and appreciating a currency or devaluing a currency, right? So Canada UK and Japan inflation data China fourth court of GDP figures is also important Generally because if China is continuing to grow then we should be more in a risk off Scenario sorry risk on scenario I should say and Eurozone consumer confidence and Australia employment figures So that's also going to be important as well for those trading the Australian dollar. So a few market moves Events potentially so let's see what happens But let's get into the technicals and some more probably in-depth fundamentals So let's look at the the dollar index and the dollar index is just a measure of Dollar strength against the basket of currencies like the pound the euro and the yen and Maybe a couple others as well now starting off on I guess a brand new first shot and What we did have last week was a demand zone around here and Prices have obviously gone through that but my personal bias is for a potential buy and For those of you who have joined the course You'll recognize this actually as a as a CPR zone, right? And we basically bounced off of that off of that CPR zone. It's a level CPR Right and the level really kind of started from here Right was right there and in fact, I do talk about that in my 2022 market analysis and The the link to that should be somewhere up at the top and if you go back to that market analysis You'll see that basically I was talking about the this basically this this I would say necessarily set up because we're not looking to Trade the dollar index, but it's a it's a confluence. It's a level confluence that we use when buying the dollar and Looking to buy the dollar ultimately if this is the low and this is, you know, the high what we're looking at is Is is really understanding where we are from a value perspective This is obviously an expensive area for the dollar and this is, you know, bargain area for the dollar, right? So if that's a bargain and if prices come back somewhere down to this zone Potentially we could see some upside and why would we see upside price doesn't just move by itself It moves because of the fundamentals in the medium to long term short term is more to do with liquidity Stop hunting market makers, etc. So let's get into why prices are potentially going to go higher on the dollar Why I think that anyway, this is not financial advice But the US inflation hasn't been this high since the early 80s So US inflation pressures show no sign of easing with headline CPI at now at 7% and core I'll put 5.5% it hasn't been this high since the days of facture and Reagan So some of you may not know who they are, but it's been a while We could be close to the peak But the risk is that inflation stays higher for longer and we could see a more aggressive response from the Fed So an aggressive response. What does that mean an aggressive response would be pretty much rate hikes, right? So the Fed will find it hard to talk about path ahead After March rate hike and generally rate hikes are positive and I say positive I don't want to use positive or negative, but what rate hikes will typically do is they would appreciate a currency Because inflation is devaluation So you have to in order to counter inflation, you have to try to appreciate the currency And one of the ways to appreciate a currency is to hike rates So the Federal Reserve officials head towards their January meeting with only tentative conviction That inflation will finish the year below 3% because they have a 2% target as they predict And are already saying that they may need to raise interest rates faster than expected So if they can just get way out of hand way above their 2% target Which means that they are in a bit of a panic mode and they have to do something to stop the devaluation of the dollar Which is generally to try to appreciate their currency, right? So we've seen a pullback and now for me, anyway, this looks like a bit of a buy Not necessarily on the dollar index, but on other currencies So pullbacks are buying opportunities if you understand that in the future At some point, in the medium term, maybe the next one to three months prices should be a lot higher If they are looking to hike rates and on the hiking cycle So let's move on to the dollar with that bias We're looking at really dollar buyers, right? So I'm not looking at supply zones, no way looking at supply zones, not for now Although I will plot supply zones just for those of you who may think that you want to be buyers I mean sellers of the dollar and buyers of the Japanese yen But there's a demand zone here and we also have a bit of an intraday support and resistance zone Which is going to be around here So what we have right here, why is that? And that's really because you can kind of refine it a little bit You can generally see that prices have kind of bounced off that zone, right? From the underside and to the other side So you've got support there, support there, a bit of resistance around there So prices have come down bounced off this zone here And we have several levels, I guess, within that demand zone For me, again, if this is a bargain area and this is the expensive area for the dollar yen Anywhere below the 50% area which is fair value is, for me, a nice buying opportunity I haven't entered this just yet looking for an entry And if prices do come down a bit further, that's going to be even nicer If you want to say nicer, use that word But it's going to be a bit more of a bargain, right? Because there's a bargain down here We know that for a fact as prices made a new, a brand new high So whatever drove prices higher, if they come back to this zone Fundamentally, we want to be a buyer of the dollar and a seller of the Japanese yen For fundamental reasons, risk being more now Coming probably more off to on, right? So in a risk-off environment, a Japanese yen does Is a safe haven and tends to want to strengthen But I think with the Fed looking to high-creates The Omicron variant not doing, you know, not having a major effect Or major impact is being kind of contained I do think that we should go to the upside Now, I don't know whether it's going to be this week Next week, who knows, right? Nobody knows, no one knows But the buyers should be to the upside And you can see pretty much fundamentally From the beginning of last year, what's been happening fundamentally So there's no reason to really kind of change the bias, right? Of that, not because prices are trending higher But because of the fundamentals behind what is happening And if you want to really apply fundamental analysis To your trading and really get some The results that you're looking for Then I literally am closing my mentoring And the enrollment closes on the 16th of January Which at the time of this recording Which is on a Saturday is one day four hours from now And really applying fundamental analysis To your trading is essential How can you call yourself a forex trader If you have no idea about what drives the forex market What is important, what to look for, right? Banks are not, they are not Using technical analysis to make their trading decisions They are not You are a technical analysis trader And how's that working out for you, right? It's not working out very well So try fundamental analysis If you want, if you're serious about this Then you will use fundamental analysis Supply and demand zones, capture pain relief Stop hunts as well as really understanding What goes on within the forex market In terms of market making, liquidity As well as get access to our fundamental analysis Spreadsheet which is generally tend to steer us In the right direction So for those of you who are sitting on the fence At the moment and wondering if you should join or not Give it a go because we've got some great results Recently from some traders And not just recently over the past year or two So again, we've got the, let me just zoom down a little bit I guess forex mentoring interviews And these are real people, real results, real experience I've got Ken Jarbread, Lawrence, Sam, Roger, John And I've got some more interviews on the way With traders who are in the group, right? They are in this group And they are seeing the results With the fundamental analysis So watch the interviews, give it a go Go to the website trading180.com And I'll see you on the other side Anyways, getting back to the technicals And let's now move on to the dollar Swiss And the dollar Swiss I'm very interested in prices of bounced up I think I might have missed a bit of an entry But I'll wait for a little bit of a pullback The guys in the group were waiting for this zone, right? We've been waiting for this zone for ages For a bit of a pullback And prices have come back I generally try not to take any trades on a Friday evening Right, on a Friday afternoon, Friday evening Into the weekend, personally But we did see prices come down into this zone on the daily And I was saying about this setup here But I think there are some traders That are actually in this trade here And for me, I'm looking at getting involved in this It's just really kind of looking for a certain type of entry To be fair But if it goes without me, then it goes without me But if it doesn't, then it pulls back Then I'm looking for really a setup somewhere around here And some of you, again, in the group may recognize this There's also a bit of a stop point If prices come further down Then I'm looking at that zone right there I think that's a very nice fresh area of demand And I think the dollar is an absolute bog in this zone I don't think it will come down there But if it does anything can happen That is going to be an absolute bargain area to look for a buy Moving on, and again, this is not financial advice So if you do want to get short, of course, on the dollar And buy at the Swiss franc for whatever reason Then your nearest supply zone actually is going to be way up top And I probably would say If you are looking to get involved in anywhere around that Around it within that zone Again, break it down kind of thing Where you've got a level of probably support and resistance I'll probably say up the top of the 92 Which is probably the best area to look for any kind of short trades Probably way up there Looking at the dollar CAD Not a pair that I'm personally interested in But we were looking at the forecast In the fundamental analysis group In the discord group And this was pretty much predictive To the downside The Canadian dollar is looking to high trades Also along with the US dollar But for me, again, I'm not really keen on this currency pair To trade, so fundamentally it's not great And then you've got I think that's probably where you're really the way the demand zone is Actually, in fact, I'll keep the other one there as well Just in case you're looking to get long or short You're looking at that area there Supply and then you're looking at Probably something just slightly higher as well I think that's a zone A higher zone at the 128 area is actually quite nice So any long trades Probably looking at right now If you're looking at getting short The underside of that zone is pretty decent Moving on to the pound order And the pound now It's gone really from strength to strength I kind of expected the pound to get a bit weaker Here and actually continue to go a bit higher Reason being is because we had some positive news out of the UK The UK growth surge takes GDP above pre-virus levels So the UK economy reached its pre-virus level in November And early evidence suggests Omicron damage may be modest enough Not to take activity back below A February bank of England rate hike is growing more likely So the market is now pricing in I guess The likelihood of a bank of England interest rate hike So you're seeing now pretty much what is going on With regards to price now The dollar has been, you know, recently It's not a pair again I'm interested in You've got two, you know, quite strong currencies Central banks are both hiking It's more of a difficult market to read To be fair in price, to predict where prices are going to go It's almost like if you compare maybe two, you know, really, you know, strong, I don't know Boxers, for example, in a straight fight It's harder to predict who's going to win, right? Whereas if you have two currencies where one is Central banks looking to appreciate their currency through rate hikes And another country is not and the central bank is not Then that's a much easier trade to take And predict where prices are going to go in the medium to long term But for me, you know, it's not really a pair that I'm looking to take But if you are looking to, you know, continue buying the pound against the dollar The first area to look for is that zone there And you actually do have some decent confluence in that area With some horizontal support Also, as well, from a cell trade perspective This area is quite decent when I think about the fact that this price action Really hasn't pulled back and it's always your pullback It's always a reversion to the mean So with that being said, I think if the pound starts to get a bit stronger The dollar starts to get a bit stronger And, you know, towards closer to a rate hike Then you may start to see at least the pullback markets have to pull back Right, they're moving waves, so even though we might go higher You probably get maybe deep pullbacks within that move higher And I do think that prices will start to come, you know, pull back at some point Where they have to, but so it's not really a pair that I'm interested in taking But what is, is the euro-dollar And the euro-dollar, you know, we're looking at trades within this area here Supply zone And the reason why I'm looking at supply zones is because Europe aren't looking to hike rates any time soon And if you look at, for example, the Germany economy shrank as much as 1% In the final quarter of 2021, so gross domestic product rose 2.7% In a full year as expected, but the recovery from the pandemic Has fallen behind France, Italy and Spain And the reason why that's important is because of the fact that Germany is Europe's powerhouse, right? If Germany economy is lagging behind, then it's not great for Europe, right? But so we had some hidden supply here And prices have literally reacted from that zone And, you know, going to the downside, so really nice trade set up that I'm looking at anywhere probably just, you know, beyond that zone as well I think the limit of the move is probably around the 115s Somewhere like that, we've seen some bank forecasts that say around 115s So the higher it comes, I think the cheaper it is for the dollar And as we get closer to rate hikes, we should see prices start to come down Prices could, you know, continue going higher That is what it is, but I think the path for these resistance Especially if you look at, again, not looking at, you know, saying that The reason why, you know, we've been going down is because of price But price has to pull back, right? There could be a decent pullback and a continuation to the downside So fundamentally, you know, right now, dollar is in the driving seat When it comes to which currency is being appreciated And which central bank is kind of holding fire and looking to appreciate their currency So for now, you know, dollar, pretty much dollar shorts or dollar buyers Which is a euro dollar short If you are looking to buy the euro, then the nearest area that you want to look for Is going to be at this 113s, 113s, 6th area Moving on to the Aussie dollar and the Aussie dollar So the Aussie dollar came up to this zone right here Nice supply zone, touched it once, touched it twice Gave a nice little pin bar, I think it was like a nice little zone Above it, did it touch that? Nope, didn't touch it, but that zone ended up holding the one below So again, looking at this area here, this is a decent short And then there was a nice little short here as well Again, the Australian dollar, there are central bank meetings on the horizon The Australian dollar might be a buy at some point, probably later in the year Or maybe earlier, matter of fact, it depends on what the data says But I think against the US dollar at the moment I think this is just a pullback, right? Again, the markets have to pull back So you've had this move, which hasn't really pulled back at all It's gone from like 75.5 to like 70 So it's gone around about 500 pips And again, between an expensive and a cheap area is fair value So what do price do? We just pull back to fair value, right? So the banks, they wanted to buy this currency pair as far as the US dollar Against the Australian dollar, they were looking at fair value, cheaper And then potentially to the downside now Again, it just depends on the Australian dollar room and the central bank But you would think that the power for this resistance should be to the downside Not a pair I'm interested in personally But if you are, then you should probably, again, not financial advice either But the power for this resistance does look like it is to the downside Because the US dollar is in the Federal Reserve are ahead of the Reserve Bank of Australia And now looking at the gold Looking at gold and gold For me, it's been a very tricky trade Not to say I've been trading gold But if I were trading gold, it's tricky in a sense of It's not reacting fundamentally as it typically should Right? As it normally does And so for that reason, you would expect really gold to start making really high highs When you see high inflation, right? It should be really up here because gold is ahead against inflation But we've seen dollar strength counteract that We've also, well, in over the past year or so But we've also seen that money might flow Or money's been flowing into, for example, bonds which return a yield Like government bonds So with that being said, gold balls at the moment are struggling a little bit I think gold is a buy if the US economy starts to fade a little bit And maybe there's maybe some lockdowns and some risk off sentiment That comes into play But for now, I do think that gold isn't necessarily a fantastic buy Even from a location perspective If we're looking at this being the absolute high And maybe this being the recent lows We're in a bit of no man's land, a bit of fair value So you really want to buy at highs and lows So really up here, if you're looking to short If you're looking to buy, it's probably down at those lows Or even zooming out a bit You probably want to even look for these lows around here So within that range, I think the ultimate buying gold for me Is prices really kind of came back down to this area here And then there might be a decent stop on around that level, etc. But where we are now, probably definitely a bit more tricky To really kind of see where gold may want to go in the future Or where the real kind of bargains are But if you're a gold bug Then gold is always going to be a buy Regardless of what prices are doing in the short term Right? So that's where we are And that brings us to the end of this week's Fundamental and technical analysis Again, I wish you a great trading week The mentoring enrollment does end on Sunday the 16th And once it's gone, I will maybe reopen Within the next three, four, five months Depends on how I really kind of feel, right? So for those of you who are on the fence Have a watch of the interviews Lots of traders giving you their personal experience And how I've helped them to really become profitable So guys, take care and have a great trading week And hopefully I'll be working with you in the group At some point, take care and speak to you all soon