 Hi, my name is Leon Roe currency trader and trading coach at trading 180.com and welcome to this week's Applying Demand Forest and Gold Fundamental and Technical Analysis Don't forget to like subscribe and share with your fellow colleagues if you like the analysis that I provide to you every week So getting into some of the fundamentals in a week ahead 30th of January this from Trading Economics and let me zoom in a little bit It says will be it will be a very busy week with central bank meetings in the US UK and your area And non-farm payrolls report taking central stage also investors will follow inflation and GDP growth rates for major European economies including Germany France and Italy and Finally we it will be worth following fresh PMI readings for the US China Canada Australia and Australia As we don't really look at the others So just a little bit more detail When it comes to what's coming up So the upcoming week brings a lot of news for investors to digest among them a highly anticipated Federal Reserve Interest rate decision and the non-farm payrolls reports inflation has shown signs of cooling fueling hopes that the Federal Reserve Would slow down the pace of its monetary policy tightening by delivering a smaller 25 basis point hike on Wednesday. So That is really, you know, where the signs of pointing that they do Ultimately the the dollar should is probably on the depreciating cycle and on the other hand We've got Europe so in Europe the European Central Bank also and the Bank of England are expected to move forward with their aggressive campaign on inflation and interest rate and and raise interest rates apologies by 50 basis points on Thursday on the macro Front the key reports on growth inflation and our employment will be released for the euro area Germany, Italy France and Spain so lots going on This week on with the majors So let's get into some of the technicals and married them with the fundamentals as we typically do now going on to the dollar index and one second and the dollar index is Just a measure of dollar strength against various currencies like the euro the end of the pound and And yeah, so we've come down to this this demand zone which you've kind of hovered around for a good couple of weeks now the 101 102 area and so I think Investors and traders are waiting for and the institutions waiting for is really a sign as to what the Federal Reserve are going to do with monetary policy and and so the thinking is that the Fed is set to shrink rate hikes again as Inflation slows and it's really important that you understand You know inflation Interest rates and GDP and really the relationship between the three because ultimately it's what drives currency prices because Value and price are different. They're not the same thing And over the medium to long term value eventually shows It's you know Shows on on a price chart whereas price in this very very short term if you're trading, you know five minute ten minute charts It's all really about, you know liquidity hunts and grabs etc But if you want to really learn how to understand where prices are likely to go in the In the short in the medium to long term over the next, you know, one to three to six months It's really important that you do understand fundamentals and actually talking about fundamentals I've got a free webinar if you type in webinar on the trading 180 channel type in webinar and I've got a couple of webinars. I would definitely recommend The fundamental analysis webinar three steps generating a profitable trade idea three steps and Also as well this one here, right that will definitely get you on track as well as everything else that YouTube suggests and As well just to remind you that I do have a the opening for the trading 180 mentoring where you get the Fundamental analysis spreadsheet where we rank and rate the currencies we also and I also show you The currency value cycle and this is not spoken about anywhere online on YouTube. It's a concept that I created and Ultimately, it serves us very very well when understanding which currencies to buy and sell It's not just a case of ranking a currency one and being strong and eight being the weakest There are times where eight will be revalued and one will actually start to devalue right and so, you know The mentoring is done through Discord as well as lot regular live meetings on a Wednesday. We have some high level conversations in here It's not about just typical support and resistance We actually do talk about and understand the fundamentals to a very high level and Also, the enrollment starts on the 6th of February. So seven days from now and there are various levels of access So getting back to the the article You know understanding why this was going to happen and we knew this was pretty much happening Which is hence the reason why we've been shorting the the dollar, but also as well. It could be data surprise, right? We could see higher inflation which would then take all bets off the table, but the Federal Reserve is set to shift Down the pace of interest rate hikes again in the coming week amid signs of slowing inflation while Friday's jobs reports may show Steady demand for workers that improves the chances of a soft landing for the world's largest economy So lots going on there to think about but the general consensus is that inflation isn't is coming down. Therefore They are less likely to hike rates Continue hiking rates there their hiking cycle is coming to a potential end which then will pretty much devalued the dollar over the short to medium term and Feds what are also back slowing the next rate hike to 25 basis points So there's support there, but if obviously something changes then Then obviously the dollar will either, you know, appreciate if they go to 50 basis points For sure that take the market by surprising if they don't hike at all zero, then I think the dollar is going to Going to do devalue even more. So where we are technically technically It's all really going to be driven by what the Fed say if you want to try to anticipate what the Fed is saying in terms of rate hikes or lack of hawkishness a more dovish a dovish Statement then you could look for any pullbacks into a supply zone before looking to get short if that happens But I don't know whether it will but let's see But even if you are looking to get short on the dollar Now is definitely not the best time really and truly you really want to see Prices prove that it wants to devalue then a pullback into a supply zone before getting short So that's really the the thinking behind You know Trying to trade the dollar or any any kind of currency pair, right? You don't want to you know buy high or sell low that doesn't make any sense try and short low Even if prices go lower, that's not the smart thing to do. So always wait for pullbacks look for bargain areas to to look to buy or Or expensive areas to sell, right? So the dollar for me overall bias is still to the short side Even if prices come up in the short term unless the data proves otherwise Dollar yen again from last week the analysis just waiting for really pullbacks again If the dollar remains weak into this supply zone before looking at getting short not really much to kind of say on this other than from From last week, you know pretty much the market over the last five days has been in this really Tight auction, I guess some people would describe it as a range But the market is an auction. So Fair value auction. So it's really kind of stayed between this 130 86 and 129 so really not really much pips in there Probably about 990 pips maybe for an intraday trader and the intraday really on that lower time frame It might be enough, but from a daily perspective prices really haven't moved anywhere. So Again, any pullbacks up into the one three twos one three two fifties I think a decent even higher would be even better Um, and again, same thing if you're looking at any buy trades I think now this has probably created an okay demand zone to look for any kind of buy trades If you're looking at buying the dollar and and a reversal of fortunes in the short term for the dollar And any positive news out for the dollar. I think that's decent a decent buy Technically so uh dollar swiss again from last week. We really again haven't really moved anywhere It's just been kind of, you know Auction in between this high and this low we did come up to the one So it is 0.928 area But nothing really so again, I think for me if I'm looking at buying from a technical level I'm not really trading this pair. I'm not really interested in it But if you are I'd say the bottom end of that area the 90 91 area Would be decent for a buy trade if you're looking to buy the dollar any kind of sell trades probably further up towards the 94 Cent area is where I would look for any kind of Sell trades and you've also got the added The added confluence I guess of support and resistance right there as well so that was definitely been Traded in that 94 area. So a decent area of Of supply should be in in and around that area But that's again just determined by if you think that the swiss franc is a bargain here or the dollar is expensive Moving on to the dollar cad The cad interestingly enough And the bank of canada have decided that they're not looking to High crates anytime soon. They've actually put in one of the first banks to now start to hold rates And I have a wait and see approach and they reached their terminal rate and so For me The cad is is not a buy but against the dollar again. I'm already looking to trade this pair But I think this is a decent zone for a decent buy on the dollar anyway against the canadian dollar because you know the dollar is actually still hiking rates whereas The the canadian dollar might not actually hike rates or they're signaling that they're not looking to hike rates They've come to an end. So actually in fact if you are looking to buy the dollar I think probably the canadian dollar might be a decent buy against the the canadian dollar for now The New zealand dollar new zealand dollar hasn't pulled back right looking for pullbacks this week If you wanted to get along on this new zealand dollar, but nothing has come back. So Really looking for kind of a first pullback probably entered his zone before looking at getting long Um, you do I mean you can extend this zone probably a bit higher But I would definitely say the the round number of 63 cent would be the best area to look for any kind of um Long trades, I don't really like buying at highs. I'm not really trading this pair anyway But if I was then that would be where I would look for a A trade because if you're looking at that area be in the low one second Right. So if you're looking at this area being um Bargain price and this being a new high Uh fair value is around the 50 percent area. So that's where you're looking to you know, try and get long just below fair value um pound dollar and the pound dollar very interesting um Level uh here we've come up to a nice a decent supply zone and then we've got one just above it I think there is an opportunity to short this um, this currency pair I don't like the pound um as a as a buy at all. So um, I do think that the dollar actually Could be um a bit better than it. So if it comes up to uh, up to the uh Above the 25 25 50 area, I think that supply zone is decent for a short trade And again, it depends on what the fed really kind of do Um But if you do want to be a buyer of the pound then it's really looking at pull backs down into the one two twos one two one area and talking about the pound fundamentally Uh, UK wage inflation points to another big rate hike this week. So uh, bank of England expected to raise key rates to 4% on Thursday But policy makers are concerned about inflationary spiral. And so um, the inflationary spiral is um, you know Can hurt the economy, right? So britain's soaring wage inflation is likely to push push the bank of england into uh, another Sharp increase in interest rates this week investors and economists expect UK central bank to raise its key rate um, a half a point to 4% on thursday That would mark the highest since 2008 and the quickest string of hikes in three decades now typically again rate hikes are typically positive um, or I say positive, but they are um, they appreciate a currency or they're that's their intended function But um, the market is more forward thinking and there's probably priced that all in right now And the bank of england actually are projected to hike. Um, sorry to to actually not Or to end their hiking cycle soon as well alongside the uh, the uh, the dollar and so um There is uh, the potential for prices to kind of go higher temporarily But I think it could start to you know, pull back to the one two ones and even just below that around the uh, 119s potentially, uh, again just depending on um, what the the federal reserve do and also as well Uh, the uk's GDP, which I expect I actually expect to be quite poor Moving on to the euro dollar and the euro dollar just keeps grinding higher, right? I'm looking for a pullback Prices are pulling back a little bit I'm pulling back to this area here Um, but I do think that we are still quite high from a moving fair value perspective I know the monthly is in that zone as well. Um, so that actually gives some confluence to the to the value perspective But um, I just it's just for me just visually. I don't like buying at highs But this is going to be the first area to look for some buy trades if prices do come down to that 107s And if it comes down even further, then that would be even an even better buy I do prefer this lower zone the 105s if it can come down here That would be really really nice. Uh, but again, I think this demand zone is going to be driven by what Happens this week with the european central bank as well as uh, the federal reserve and so the ECB's rate hike week may feature slowing inflation Stalling GDP so euro zone inflation probably slowed marginally after the economy either stalled or even contracted according to forecasts for crucial data before next week's interest rate decision and so, um You know slowing inflation obviously, um, and I say obviously but uh slowing inflation Is uh would would force the central bank to kind of End their hiking cycle sooner. But um, but it's still basically quite high. And so there was a quote, I think from Um from christine lagarde who says with inflation still way too high in the words of president christine lagarde The ECB will certainly raise a deposit rate by half a point this week to continue the most aggressive monetary tightening tightening in history and um, This is a an image from um one of the banks that we uh, that we look towards in a private group Who basically have come out and um, you know ranked the ECB as being you know, still with the most tightening to do whereas canada You can see actually they've reached more their terminal rate a lot sooner, right bank of japan smb federal reserve rba bank of england rbnz Now some people might be thinking why you know, why are you short on the bank of england if they are? You know seen as hiking Quite a lot and it's really because of their economy So not again not all rate hikes are good You have to understand what the economy is doing and whether the economy can support their rate hikes because rate hikes Can be damaging To the economy if you if they hike too much and too fast because it hurts business and growth with borrowing and lending costs, right so um So for me, uh, I do want to be a still want to be a seller of the pound and at the moment a buyer of The euro until obviously the data data doesn't support that narrative. Then I probably may change my mind and Maybe stay out of the euro and while it pulls back But as long as the data supports the narrative I'm going to be long on that euro so any pullbacks into there into the this first demand zone 107 Um put at the bottom of 107 area um and even better the 106 is uh moving on to the Aussie dollar And the Aussie dollar again blast him through some levels The australian dollar had some inflation data come out which was actually positive I say again positive but more appreciative of the currency Um the inflation came out higher than expected. I think the higher since 1990 and so the expectation now is for the The rba to look to now continue to hike rates and again going back to the um The image of uh, you know priced in so the rba is still looking to you know, like the fourth on the list When it comes to central bank uh hikes and so any I think any pullbacks are going to be decent for for any kind of buy trades So any pullbacks into the 90 sorry 60 69 50 area 69 40 I think it's going to be really nice as a buy for australia also as well hoping that the China's zero covid policy comes to an end and that will benefit the australian dollar a lot more Aussie yen again not a pound looking to trade both are actually Quite strong. I'd probably say the australian dollars at the moment is expected to you know grind higher But the and I think Towards maybe the second half of the year or the end of this quarter at least the second quarter we should see in fact, um the The yen start to strengthen because they are in the midst of potentially changing their monetary policy And in acting Policies that actually are appreciative of the yen so for the first time in a very long time But again, that is data dependent So if you are looking to get along on this currency pair, then you're looking at a pullback into this zone 91 50s before looking at getting long And gold gold again keeps grinding higher with the dollar going lower You know gold grinding higher you've really got to Wait for this pullback if you're looking to get involved in gold Everything pulls back eventually People take profits. So this is going to be the first area to look for any kind of buy trades in 1900 area Or back down. I would probably say the 1870s would be the better zone to look for a Buy trade. So um, so yeah, I think it's just you know been grinding higher There's been talk about obviously, you know the deck clock And um, yeah worries about the u.s. Economy. So with all that going on Gold is you know looking to just keep grinding higher for any pullbacks. I think of buying opportunities Um, if you are looking to short, there is a supply zone just above you It is 90 50s 90 60 area and then you've got a wide zone of supply right ahead of you up to the 2000s So, um, so yeah, that's pretty much it for this week. I hope you have a great week and Take care all the best and speak to you until the next video