 Hi, my name is Leon Roeb, currency trader and trading coach at Trading180.com and welcome to this week's supply and demand for us in gold, fundamental and technical analysis. I hope you're all doing well and for those who were expecting a video last week, I actually did record a weekly video but unfortunately the sound did not record and so I was a bit strapped for time so I couldn't record another video so my sincere apologies for not having last week's video out but we're back to the analysis for this week for the YouTube guys, for you who are watching on YouTube and for those of you who are part of the mentoring group, I have uploaded the more in-depth fundamental analysis video and that's analysis from the banks and stuff and then also as well the weekly technical analysis video as well as the group calls, the live group call recording that we have on Wednesday as well as all the other videos that I've done throughout the week from feedback to setups etc. You've got them all here for the month etc. So all the videos are here, tons of videos for you to watch. Anyways, getting into the week ahead though, the July and this is from TradingEconomics.com. Next week the payrolls and FOMC minutes will be taking the headlines in the United States. This will be followed by the release of ISM manufacturing and services, PMI factory orders and foreign trade data. Additionally, S&P Global Manufacturing PMI will be published for Switzerland and Canada. Investors are also eagerly awaiting inflation rates for Switzerland. Furthermore, focal points for investors will include Australian interest rate decisions. I think that's on Tuesday. Canada Employment Data, China Caxing, I think that's how you pronounce it. Services and Manufacturing PMI and Japan Tank and Manufacturers Index. So quite a lot going on this week. Some market moving news and so let's go to the charts and some more fundamentals and starting off on the Dollar Index, the DXY. Just looking at really what happened on Friday which was that the PALS favourites or favoured inflation gauge for services hits a 10 month low. So a measure of US core inflation prices that the Federal Reserve officials are watching closely posted smallest advance in sorry since July of last year. The reason why that's important is because it really kind of determines how much the Federal Reserve are going to hike and if inflation is already coming down then the central bank are less likely to hike and not just the Fed talking about inflation coming down globally then central banks will definitely look to pause rather than hike rates and so on Friday we had PCE data come out and pretty much it was a situation where it came out lower than expected and so what we saw on the price chart for the dollar really on the Friday was a bit of a move to the downside. The dollar kind of sold off across the board and it come up into that supply zone and sold off from there so the dollar not looking great at the moment but there is non-farms this week and so also another measure of how the economy is doing but also inflation is employment now there is something called the Phillips Curve you can Google it but basically what it says is that when employment or I should say unemployment and goes down unemployment goes down inflation goes up and when unemployment goes up inflation comes down and so they have an inverse relationship and so what the Fed is hoping in fact is that unemployment starts to go higher meaning that employment comes lower and that hopefully should also affect inflation and get inflation closer to their 2% target and so yeah let's see I think that's really going to be the determining factors to whether the dollar is going to follow through because then if that does occur then the Fed are less likely to hike which then the market will start to price out their two Fed hikes because according to their dot plot they expect two more hikes but they won't have to if the inflation isn't you know is coming down right so so there's that moving on to the dollar yen and the dollar yen has just been going higher and higher mainly due to yen weakness and this is because the the Bank of Japan are really the only central bank that are not looking to hike Ueda who is the governor of the Bank of Japan is very dovish but what there is and what's been quite interesting is that the yen the yen weakness to and it weakens to 145 per dollar in years 2022 intervention levels so yen falls to lowest level since November on yield differential and Suzuki reiterates to respond appropriately to excessive Muzo Suzuki I think he's the minister of finance and so there's a 145 level right which basically we kind of touched last week and that is seen as a kind of line in the sand when it comes to the amount of weakness that the Bank of Japan will tolerate because they don't want the yen to weaken too much no central bank really does like their currency to strengthen or weaken too much and they tend to intervene in the market and try to strengthen their currency if it's weakens too much and basically weaken their currency if it strengthens too much right and so the 145 level is seen as quite uncomfortable but I think maybe 145s to 150 is going to be seen as kind of the line in the sand but reading the article it says the end fell through the 145 for the first time since November near in a level where Japan intervened last year to support the currency for the first time since 1998 the Japanese currency dropped as much as 0.2% to 145.07 amid a reignited focus on the monetary policy divergence between the East nation and its major peers so there's again a divergence between monetary policy going on there which is causing the the end to weaken it's declined to an almost eight-month low has spurred reminders from government officials that they are watching moves and stand ready to act so last year the currency slide towards the 146 triggered intervention and the build-up to that sorry build up to that there were repeated official warnings and so again this was from last year and it was Japan conducted yen buying intervention for the first time since 1998 and that was back in September 2022 and then it followed up with another intervention around the 150s the 151s and so if the central bank is looking to strengthen their currency and intervene then that's a great I guess entity to have when you look into buy also the currency right and so nobody knows exactly when they will intervene but the higher it goes the more likely is that they will intervene and so there are reasons to actually look to potentially start to scale in to buy the yen again at the moment it doesn't look like you know they waiter is is hawkish but they want to kind of surprise the market and that's what they did the last time it surprised the market when they did their first intervention and then the second intervention basically ended up you know pushing prices all the way down to the one third beyond the 130 so that was what's that maybe about 2000 pips right so you've got you know if that the same thing happens around there there's a lot of money to be made if you can time it right so going back to the chart just keep an eye out really on if prices start to go higher for that for that yen for any kind of short trades in the meantime if prices do pull back to this to this area here actually in fact I'll use this this one here prices do pull back to this zone just naturally and normally then I think the dollar is probably still likely to be a buy against against the yen so if it keeps going higher hmm you want to potentially look to buy the yen but if it stays around this area here pulls back into this demand zone I think that's going to be a nice potential buy of course you can also look for buyers down here nobody knows which zone is exactly going to work of course you know you have to wait for your entries whatever your entries are and some other analysis that are beyond really this video but ultimately yeah you know either one of these levels to look for a potential buy on that dollar if again the Fed tend to remember gonna remain a bit hawkish at least if they're gonna hike at least one more time moving on to the dollar Swiss Frank and a dollar Swiss both central banks are pretty much hiking rates you had price pretty much move you know auction to move sideways as some people describe it but it's just a basically price acceptance between this price here which was 0.901 or 9 so yeah 901 and 0.89 cents so that's really where prices are found you know buyers and sellers in agreement of what an expensive or bargain prices are now not really looking at this pair to be fair but if you are then probably looking at either a move back down into this demand zone before looking at long trades or looking at the pullback into a supply zone maybe somewhere up at the highs before looking at a short trade but yeah this the Swiss National Bank are pretty hawkish even though that necessarily need to be because inflation is down by that 2% target but the they pretty much are continuing to be quite hawkish on their interest rates so that should support the Swiss National Bank moving on to the dollar CAD and the dollar CAD did find some support at that demand zone from from September 2022 about maybe nine months ago did react from there and so we've come up into the top end of this supply zone and so yeah you've got a central bank where the both central banks are looking to hike rates the inflation this week for Canada slowed but not enough to take hike off the table according to the markets annual rate falls to 3.4% and key core measures aged down GDP and jobs data may still force my Clems hand next month and so GDP actually came out as supporting a potential rate hike but again Canadian inflation is slow to its weakest pace in two years and core measures edge lower reducing but not removing pressure on the central bank for another interest rate hike next month so I think the the probabilities of a hike up maybe around about 50-50 and so with that I'm still a buyer of the Canadian dollar but just not against the US dollar at the moment I think if you want to delete that level and draw actually another demand zone around here I think that's a decent and then what you're looking for if you're looking for a buy on the dollar right then you're looking for problem I shall start with the buyer a buy on the Canadian dollar against the US dollar then you're looking at either a short trade from here or a short trade from just the zone further up right here now if you're looking for a buy on the US dollar then you have to make the prices to come back down into this zone and then look for a nice buy trade to the upside but again that would depend on which central bank is the hawkish who's going to be holding first and the divergence between the two which I don't really see a divergence between them too so I'm not looking to trade those that currency pound dollar so the pound dollar pull back not quite into this demand zone but there is some demand there also is where you do have actually some supply right here as well now the pound didn't really have much news last week but there was a meeting with the central banks I think it's called Sintra and where the Bank of England the ECB and the Federal Reserve pretty much all met I think that you're seeing them on the screen right now I think that's all with the all of them Christine Lagarde Andrew Bailey Jerome Powell and Ueda right a governor Ueda for the Bank of Japan and pretty much Ueda was the odd one out so the Bank of England the headline is is that the Bank of England's Bailey hints rates may be higher for longer than expected so yeah he says that he's always been interested in the market that the market thinks the peak will be short-lived in a world where we're dealing with more persistent inflation he said on the panel Wednesday afternoon and so the UK at the moment have really persistent inflation which means that the central bank are pretty much forced to continue to high crates even if they don't want to because their mandate is to get inflation down to 2% and so if that causes a recession oh then I guess so be it right but at the moment it looks like the the pound should be a buy at least in the short term until really those economic cracks really do start to show in the overall numbers and so I think any pullbacks into a demand zone is going to be a decent area to look for by trade and that is also providing that the US also kind of ease up and their inflation starts to come down to right so if the US inflation is coming down then they're likely they're less likely to actually high crates and also if the if the UK inflation remains sticky or goes higher then that's going to be a potential that's going to be a potential but a buy anyway for the the pound dollar is likely to be a buy for the pound dollar so that's where you are if you do want to get short on the on the pound because you believe that the the UK economy is falling it's going to have an influence on price then I think any pullbacks into these highs the 1 to 8s are going to be decent areas to look for any kind of short trades on the British pound so euro dollar euro dollar had a really nice really nice but a decent trade so far on this some of the guys got in as well at this at these areas the 108 maybe around 108 50s end up being a nice profit will stop on trade but yeah when when the data came out for the for the Fed that the inflation was coming lower what we already knew for that week was that the euro area core inflation quickens again in a setback for the ECB and you know again it's described as a setback because the central bank trying to get inflation down and core inflation is one of the key readings for a central bank and if inflation correlation went up which it did right so underlying gauge rises to 5.4% overshadowing their headline figure right the core inflation actually ticked up slightly and since bank is trying to get it down then it is a bit of a setback for the ECB right because they want inflation to fall but for for a trader we knew that if inflation is is is rising then it forces the central bank to have to high crates and when you've got a central bank another central bank like the Fed who are actually may have take maybe a very high core to off the table because their inflation is going lower then that should push prices higher which it did on on the Friday so the continuation will do will be determined by the jobs this week right so if you're in a trade right now in your long and you're thinking to yourself well do I take profit or wherever it is you can be driven by the fundamentals right so there's no need to necessarily exit the trade unless the data doesn't support you know your your trade idea right so you're the reason why you're going long your dollars is because you think that the the ECB are going to be more hawkish than the Federal Reserve right and so that should push prices higher but if the data comes out and doesn't support that that trade idea then you can consider taking you know the profits that you that you have if you haven't taken any kind of partial profits or anything like that but as we are right now wherever you are right now I would say you've got a pretty say this is where you've got your second supply zone when you have again wide supply zones like this one of the things that you can do is look for some support and resistance of your support and resistance within that area and to me it looks like there is probably where you've got decent support and resistance that you've got resistance there resistance resistance support there support there resistance resistance so price does come up here right and you want to be shorting the the euro then you know into that level just above it I think is decent for a short trade if you want to buy the euro I don't think prices are really proving that there is strong demand just yet so I'm not I hesitate to put any kind of demand in and around this area and so I would probably wait for prices to pull back down so they'll you know beyond the 108 to 107 eight twos before looking at going long because like I said for now there's not really strong demand in around this area but if price does you know prove that there is strong demand and all you're doing is then waiting for some sort of pullback into supply before then going long around here so yeah at the moment daily supply and demand zones is nothing there for now there is on the lower time frame though a set up around here which I term a CPR so there is a CPR intraday in this area but again I'm not really going to go into that in this video looking at the euro yen and again we've just seen the euro strengthen against the yen the yen's been weak across the board for months now as they have had a dovish central bank so we also have a demand zone right there now for me I would say the first area I'm looking to probably get involved as a buy would be where there is again some support at least some minimum as a bare minimum some horizontal support in the distance within that demand zone so you want to wait for that you know prices to kind of pull back down into that zone and then look for some sort of buy trade there or at the very bottom of that demand zone I think is going to be decent for a potential buy of course you know buying the euro over the yen as long as again the yen in the Bank of Japan don't intervene right if they intervene then all bets are off the table so in terms of buying the euro you'll be buying the yen so let's see what happens this week but as it stands I think you know the euro is a buy euro pound and so euro pound again not really a pair that I'm that interested in because again two quite aggressive central banks and then because you've got two central banks what happens you've got really an auction market a ranging market you did have a stop-hunt above the level right which basically was right there so this is where the stop-hunt was right here but again not really a pair that I'm looking to to trade because there's no real clear direction I know you can trade this as an auction as a as a ranging market type trade but I guess it's a bit more difficult to determine how far prices are gonna go you know fall in your favor right because if if you've got another strong central bank then it's more it's harder for that price to necessarily fall all the way down there might just stay here right and maybe just auction between that high and that low so the downside is limited the upside is limited so there are issues there but if you do want to look to trade this then the prices do come down to this demand zone and I think you do want to be a buyer of the euro against the pounds maybe the pounds fortunes might reverse a little bit then that's a decent area to look for any kind of buy trades Australian dollar US dollar and price did react from that area there on that demand zone I think that must have been on the Tuesday but then there wasn't great news for the for Australia as their cooler inflation bolsters the case for RBA to stand pat so consumer prices eased following an 8% annual drop in fuel costs and currency extends losses to 1% this traders paired back rate hike bets and so because their data came out and inflation again slowed was coming down the market assumed at the time that the central bank may not hike rates but that has slightly changed and I think that they will hike rates or the probabilities that they will hike rates are increasing and so let's see what happens if they don't hike rates on Tuesday then you can expect prices to really kind of fall at least down to the 64s but to me it doesn't make sense for them to to pause again they've already paused once and to pause twice is not really something that central banks really want to do but you never know this is good it's been crazy fundamentals recently so let's see what happens but I would expect them to continue hiking and so as hiking when they do hike they tend to hike in a cycle so yeah I think I think this could be some support if price does you know maybe you know push past this supply zone and probably looking for any kind of pullback into a demand zone before looking at getting long I think that's probably the best way to kind of play this but you know trying to get in right now you're in a bit of no man's land in terms of some any kind of demand zones but if you do want to get prepared for any kind of short trades because if you think you may think that the RBA may not hike rates fine if they don't hike rates and prices come up into that supply zone and I think that's going to be a very good short matter of fact gonna be a decent short to get short on this currency so again it's going to be driven by what happens on Tuesday and Tuesday is there so the RBA rate decision right 530 in the morning and then finally gold so gold not benefiting from you know the recent hawkishness from the Federal Reserve again if the dollar goes higher then gold tends to go lower but it did it has found a bit of support at this area of demand as well as support which I put in on the charts it must be a couple weeks ago so you got support support resistance support and so prices have found some technical support anyway and in terms of a demand that's a nice demand zone there fresh area of demand but what would drive prices higher right so what drive high prices higher on gold is if the Federal Reserve I guess FOMC comes out this this Friday and is you know shows that employment is going down right and I mean and maybe unemployment is is going higher so that is going to really kind of drive prices or if the labor market remains resilient and tight as they say then you're probably going to see you probably might likely see gold actually fall all the way down to the 1840s so again prices are fundamentally driven by the by the fundamental data so yeah interesting to say the least any pullbacks into supply probably might want to start to look for the potential to get involved somewhere around there or maybe somewhere at these these highs if you're looking to short the short gold and buy the dollar right so you buy the dollar gold is like a proxy for buying or selling the dollar so those are your options and that brings us to the end of the weekly video hope you enjoyed the analysis and take care until the next video speak to you soon you're right oh so I wanted to go over this euro pound trade it's not a pair that I had only on my watch list but I thought it was interesting because I know yesterday we were talking about this and I'd highlighted this this we were talking about this from yesterday and from the perspective of you know short traders being caught short traders stops being taken out but also as well I was mentioning that it's it's probably more about the liquidity side of things and so I thought I'd make a video really going over the I guess the basics of liquidity and I guess everyone kind of understands this it's all over YouTube you know liquidity is above the market and below the market but I'm gonna I guess talk about this but with the fundamental side of things right and how it actually ended up playing out which was in the favor of the fundamental right so you know liquidity is everywhere right it's always above a level and below a level but what gives you the extra edge is and the probability on you know to trade in your favor is if you understand what's what's maybe should be happening in terms of currency strength and currency weakness via you know the central banks and so first things first you know this was our typical setup which was you know stop hunt nice accurate level and what we had was let me just get the bar rebates all right so you had a nice setup here and price you know produced a nice stop hunt and as we came down pre news right so the news was was was due at 12 o'clock the interest Bank of England interest rate decision which ended up being 5% they hiked by 50 basis points and the forecast was for a 25 basis point right so they hiked more than the market expected which should be more hawkish right should be and typically it's nothing is a is a 100% guarantee there are obviously other things that the market does look at but you would expect that to happen but this is this is obviously just some hindsight bias right so the market you know the smart money was positioning themselves buying for even cheaper and then you know stop hunted a lot of traders who had their stops placed above the market yeah in anticipation of buying the British pound because in order to buy the British pound on the euro pound you have to basically go short right so you're buying the British pound to go short and so yeah so actually I won't do that so what happened was is that the smart money was getting in you know first right taking out all the retail stops above the market right so next what you have is prices go and do something like this and what I'm gonna do is I'm gonna zoom down into the one minute timeframe chart and so not only were they buying here yeah and buying the British pounds are shorting here when it comes to you know liquidity hunting one of the things that you must be aware of is that if there's not enough liquidity below the market then they will the the the institutions will look for liquidity above the market meaning that at 12 o'clock you had this move here yeah let me just go back yeah we had this move here it was a surprise 50 bases point hike nice surprise everybody is saying buy the British pound which is basically short this this currency yeah this currency pair now in order for the shorts to continue right there needs to be enough by orders which is the liquidity right so in order for you to continue to show there needs to be someone to sell to you meaning or someone needs to be on the other side of your trade right there needs to be lots of buying liquidity here but the question is is who is buying in the face of the of that news right who's willing to buy you know it might be you know some entities out there but ultimately with such a shock like what we saw an unexpected surprise the liquidity is probably likely to dry up right to the underneath the market and so if there isn't enough buying to facilitate selling yeah because as you sell there needs to be someone on the other side of that trade needs to be a buyer at this price they need to be a buyer at this price a buyer at that price buyers at that price buyers at that price there's no buyers there then what happens is is that the the market will look for the liquidity above the market so as we start to go forward yeah there's a lot of liquidity above the market so imagine you sold you managed to you know get in just before you know the the news came out on the anticipation that prices were going to drop your stop loss is also what's a buy order yeah and your take profit is a buy order because stop loss if you're if you if you bought at let's say 85 sorry 86 05 yeah and you get stopped out at 86 20 you are forced to buy back at a higher price which means that you obviously lose whereas if you you know take profit at a lower price then you bought for then obviously you win right now technical analysis says place your stop losses here above this level of you know resistance right there and it would have been a level of resistance right then and there's not too many retail traders for example that will place their stop losses you know especially on like these lower time frames like the one minute the five minute the 15 minute and even a half an hour 30 minute charts will place their stop losses you know have maybe you know 10 15 pip stop losses above a or below a level so you would have had traders who would have been getting involved in here with tight stop losses because they like the good risk reward not expecting prices to come back but because all the buying liquidity yeah is above the market and it's hardly any below the market these guys are now yeah either being stopped out or being put under pressure if they don't trade with stop losses right and it's that's the kind of capture side of things imagine the trader who bought somewhere down here right because maybe they were slipped on their broker and they even though they pressed by here they weren't filled until somewhere down here so anyways you've got stop losses you know above the market and this is what was happening because again you know who is buying where's the liquidity in the face of in the face of that you know that news and so you also had you know savvy traders who thought you know what I'll put my stop losses probably somewhere above you know that level there and so they ended up being stopped out right and when you get stopped out money transfers from the loser to the winner meaning that meaning that if you you know if you get stopped out right and you weren't sure when you're forced to sell right again in fact when you're forced to sell right because you're forced to buy matter of fact sorry if you sold right money goes from the loser which is you to the other side who's the entity taking the other side of your trade which is the broker or you know the bank etc right and so what they're doing is as a transfer of wealth first of all happening and also what happens is is that at the same time yeah a couple of things are happening it allows first of all the entities the banks institutions to do what to actually start to short yeah right and sell into lots of buying now not only are they looking there are orders being triggered that are going to them there are traders who would have looked at this large candle yeah and fought to themselves well this is a bit of a technical strategy where you don't take the first move to the downside in fact it's a fake out and I want to go long now yeah so at the same time that traders are being stopped out there's a lot of buying liquidity in this area because traders are now reversing their either reversing their positions yeah or new traders are getting involved in going yet we knew it was a fake out let's go long yeah never buy you know at the first move etc so you also have buying going on right lots of new buy orders and in order to go long on this pair right you have to buy the euros you have to you know this it's basically demand orders yeah and so there's lots of buy liquidity and who's taking the other side of that who's able to buy for a cheaper price because the entities don't want to buy you know down here especially obviously knowing that the Bank of England have hiked by 50 basis points yeah retail traders who have no patience or you know I have no don't you know understand the fundamental side of things and they just you know very impulsive and FOMO into trades you know trying to capture every move you know again you know stopped out and then they get introduced into being the other side of liquidity which is basically the liquidity which allows the the institutions to buy yeah at a better price yeah and so they've now gone long more liquidity but there's definitely more buy liquidity up to up these this price yeah and then no sooner how they got in right then prices start to go against them and so the institutions were able to buy or short right going into this area said so retail traders have been not caught only down here but now they've been caught up the top and probably been stopped out right and so the the smart money pretty much are you know doing what they normally do and the overall really direction of the market should be and I say should typically and it's never 100% a guarantee because you know that we're trading the probabilities and trading is all about probabilities but when you have a 50 basis point surprise hike yeah typically unless there is you know maybe the central bank you know may have been maybe a bit dovish in the speech afterwards who knows there are other reasons why 50 basis points might not be the most hawkish result and might not be necessarily drive prices in a certain direction but ultimately it usually should you know the price really should have went to to the downside overall and so I'll just go up to a higher timeframe like the four hour right and this is what you would see and just kind of forward and this is what eventually happened yeah because again there wasn't enough liquidity for prices to go lower instantly which meant that the market had to then go higher to take out everybody else and eventually you know it went in its direction and so yeah fundamentally it's important to understand what's going on yes you know I get you know loads and loads of questions why didn't the pound sell off or why didn't the power why did the pound do this or why did the pound do that on a very kind of short-term basis whenever truck people trying to figure out what's happening fundamentally and there's only so much I can kind of go into you know for YouTube videos but from the perspective of you know just an overall general understanding of you know why prices do what they do in the very very very very short-term if you're scratching your head and thinking to yourself what is going on here why isn't price doing what it's supposed to do then it's usually you know just a liquidity thing right it's a it's you know there's not enough orders and no one's gonna know how much orders are in the market and what you know is definitely happening and when it's gonna happen 100% of the time but whenever you see something like this happen one of the factors is the banks are still positioning themselves you know and they are just basically drawing in retail liquidity other institutional liquidity who are maybe none the wiser right and then they will push prices to where they want it to go and so yeah so liquidity basics with fundamental analysis the likelihood was for prices to go to the downside and eventually it did it was also helped as well by I think there was some good news out of the the UK today with regards to retail sales and I think there wasn't great news for the for the euro in terms of I think it was I think there must have been some German some German news that didn't come out fantastic for the for the euro so we did have what is it retail sales yeah so it was forecasted to be minus 0.2 came out as 0.3 which obviously was was was quite helpful as well so with that being said there you go there's liquidity right and this is not a strategy per se this is not okay this is what happens every time every situation is different as I said nobody knows how much liquidity is in the market for prices to do what they do right but if you see something like that happen right after really good news or really bad news and price does the opposite it could just be one of the things to look for is actually just you know it's liquidity let the dust settle and once the dust settles as nothing if nothing has changed then you can start to position yourself in fact in the direction of the of the banks and what the news you know came out and it's not again it's not every single news event it's really important news I say this all the time really look towards you know GDP inflation interest rates those are really the three main measures and market moving I guess news events that will move currency price overall if it's not been priced in of course already this is this is based off of a surprise news event as well right because if the news comes out and it's as expected just consider it being priced in and there's no edge there right there's no there's no there's no like I said no edge that you can kind of get an advantage of but whenever you have a surprise and the market is wrong-footed and these types of things happen then you can always you know there's a way to take advantage of this anyways hope that helps guys take care and speak to you soon