 Hi, my name is Leon Roeb currency trader and trading coach at trading 180 comm 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 please don't forget to like subscribe and share with your fellow trading colleagues liking and subscribing is a free way to support the channel if you find the content useful and If you are new to trading 180 and the first time you're watching this video My approach and the trading 180 approach is really to combine fundamental analysis and technical analysis to really identify the best trades not only the best trades as far as currency pairs and I don't find the best currency pairs, but also identifying The pairs that are likely to range and pairs that are likely to trend and this is all done through understanding the relationship between the inflation interest rates and the business cycle GDP and monetary policy and then we go down to the technicals and look for supply and demand and the player supply and demand strategies risk management trade entries and profit targets are combining the best of both worlds and for me if you're just doing one which most traders tend to just look for technical analysis you are literally I think Flying a bit blind on the you're giving yourself a handicap if you don't understand the fundamental analysis. Anyways Getting into this week's Fundamental news and what's coming up and what should drive the markets is the central bank in the US Japan and the UK will be deciding on monetary policy in the coming week Monetary policy is a driver of currency exchange rate value Don't let anyone else tell you otherwise fundamentals are the what moves the markets and risk sentiment and liquidity Not technicals While key data is to watch So while key data to watch For include the US and China industrial output and retail sales Japan and Canada inflation data UK consumer morale Australia employment figures and retail trade New Zealand fourth quarter GDP and India wholesale prices So I'm some market moving potentially market moving data coming out and But really we're looking at you know longer term trends when it comes to understanding monetary policy inflation and interest rates and really the relationship between that and I have a fundamental analysis courses on the YouTube channel and I'll try and remember at the end of this video when I made it in this video to put them in the Description box as well as maybe some sort of notification on the top right-hand side of the screen So let's go into the the technicals and some in-depth fundamentals as well and starting off as we always do on the US dollar index and the US dollar index is just a measure of Dollar strength against the basket of currencies like the euro the the pound the Japanese yen for example and If you see the dollar index, you know basically move into the downside Then you can expect really dollar crosses to kind of weaken and if you see the dollar index strengthening then you should see obviously the dollar certain dollar crosses strengthening and This is just basically add some Confluence to your trade when it comes to maybe the technicals again We understand the technicals aren't what moves the markets It is fundamental analysis and the reason for the recent I guess Dollar strength really is because the dollar is Really kind of back on track when it comes to employment and GDP So US jobless claims hit lowest since November with more vaccines So initial claims fell by more than forecast as restrictions ease So claims federal unemployment insurance Program is ballooned, but the point is is that unemployment. Yeah is is going down to applications for us job Benefits fell by more than forecast last week. So less people applying for for job and unemployment benefits Which is a positive sign that there is employment. Yeah, and this is as COVID-19 vaccinations accelerated and states eased more business restrictions. So again Employment businesses are going Getting back to some sort of normality. There's going to be some economic growth there. And so you're seeing the dollar in the Tender well over the past couple of weeks start to strengthen and We also have The charting the global economy. The US is turbo charging the world GDP So Joe Biden's 1.9 trillion stimulus plan isn't just boosting the US. It's also helping economies around the world so you're seeing you know US strength really or the potential for US strength boost other Countries economies, but the leader I guess so one of the leaders in the economic With economic growth and GDP growth is the US So that's always a plus in the plus common column as to why you would want to buy the US dollar not necessarily against every single other Currency right, but what you want to do is find the best currencies is look for positive growth on one Country like the US dollar and then look for something that is lagging behind or is negative and that is what? Will produce price trends because you're trading you're buying strong currency and you're selling weak currency anyways Back to the technicals for me I'm overall bullish on the dollar, which means I'd be looking for any kind of pullbacks into Demand zone as any kind of confluence if you don't get it in prices tend to move higher Then that's fine as well as long as you're seeing overall dollar strength Then I will be a buyer of the dollar and of course things can change Doesn't mean that because I'm a buyer that you know if the data has to support the other bias as well So if for example You know we get some GDP data that comes out that is you know way below what is what is expected And it's a really huge miss then I might want to think about buying the dollar But as the data is supporting, you know unemployment claims Sorry is supporting a stronger dollar I'm going to be a buyer of the dollar and that's pretty much what has been happening because the bond market You know was really the trigger for higher dollar prices and they are expecting obviously some sort of normality When it comes to the economy inflation and some monetary policy in fact in 2023 I think it is or 2024 they're expecting rate hikes So they're looking you know a few years into the into the future and rate hikes are always positive for a currency anyways If you are selling again look for any kind of bearish Confluence on the dollar index as again some sort of confluence if you want to get short on the on the US dollar Moving on to the dollar yen again in a risk-off Environment the risk sorry. Yeah in the risk-off environment apologies The yen tends to do well because in a risk-off environment Is is money will flow into safe haven assets in a risk-on Environment money will tend to flow into higher yielding currencies I've been saying this on a weekly basis if you're new and you didn't know that then now you know but if you've been watching me for some time you should understand this and This places you in a position where you can get into these trends. Yeah, it's this It's the no-brainer right the you know, we've got risk-on sentiment The dollar when you think of an interest rate perspective I think is at zero point two five zero point one I think one of the two right percent from an interest rate perspective and the Japanese yen is a minus zero point one Meaning it's gonna cost you money. You know to put to put your money in Japanese in the Japanese yen so From if we're in a risk-on environment Where traders are looking for a higher yield this again adds another tick to the tick column, right? Why would you be buying the Japanese yen in a risk-off environment in this area risk-on environment? It wouldn't so you're seeing this happen in this play out in the market. So again, if you do want to be a buyer of the dollar Not necessarily looking at the at the highs until we see some sort of proof of value proof of value would mean I'm looking for any kind of move to the upside to prevent us a higher high Then a pullback into what would be considered a Demand zone as higher highs and higher lows are the strongest areas to look for trades But until that happens for me I'm not really looking to buy at highs if we get a bit of a pullback down into that zone That would be nice. We also have a nice area of Confluence when it comes to support and resistance. So unlike again other traders who kind of look at Support and resistance and supply and demand as separate trading Strategies and entities in fact support and resistance is supply and demand and I've explained that in in another video And I'll try and again remember to put that in the description box below But basically supply and demand Is is it is really the genesis of all trading strategies and all support and resistance are is is past Supply and demand and I'll give you an example of that All right at some point this is this area here would have been Demand yeah, that area would have been demand and all that is is that that's been projected into the future and just adds Looks like support and resistance But in fact it was a past demand zone that has been traded several times and just been projected into the future as Support and resistance. That's all that is. So you do look for confluences because not everyone trade supply and demand But they do most traders with trade support and resistance so if we get a pullback into this area and We want to be buyers of the dollar and his risk on etc Yeah, then that is going to be a really nice area to look for buy trades because not only our Support and resistance traders looking to buy in this obvious You know area and at this obvious price of 107 we've also got supply and demand traders looking to get involved in here so Really nice Confluence there if we're looking for supply and sell trades Why you'd want to be a buyer of the yen right being buyer of the yen meaning that you think that the yen is an absolute bargain at this price Yeah, that's what you'd have to believe between this 109 850 and 109 15 Area you'd have to believe that that was an absolute bargain for the yen for you to want to really Think that that's going to turn around of course It could just be profit-taking but the smarter trade would be to look for pullbacks and look for You know buying the dollar again. This is not financial advice Just telling you what I would do and what I think is a smart trade moving on to the dollar Swiss and the dollar Swiss Swiss Frank is a safe haven currency and again doesn't do well in a risk On the environment the dollar for me is I'm looking for any kind of buy trades I can at the moment. Hopefully can pull back to this area here. If not, then cool That's fine. If it creates a new high brilliant, then that would be the area. I'd look for buying the dollar Against the Swiss Frank so I'm just looking at the buy trades again on the dollar If you are looking to sell then you'd look between that 94 Pretty round number zone probably somewhere within this area here to look for sell trades Of course anything can change fundamentals can change In the in the short term but medium to long term I think the the dollar is the buy as long as again data supports that narrative Moving on to the dollar CAD and the CAD has been absolutely Again, I'm a bit of a tear had some really kind of positive news With regards to the CAD where let me see if I can find it one second or do I did I actually Did I delete it? I think I might have I think I might have deleted it But the dollar CAD So I'm trying to look for it. What was it here? Screen nope. Well, the CAD had some positive news with regards to employment and again employment being Really kind of an economic marker for economic growth And this is what you're seeing is what you're seeing quite two strong currencies to be fair Go competing against each other and what we should probably see is some sort of ranging market Does that mean I want to be a buyer of the of the dollar around here? Not if the Canadian dollar is seen as stronger than the Then the US economy, so there are better trades out there even though this is a really really nice I do like this area as a buy trade, but I'm getting buying the dollar and really kind of selling the the Canadian dollar and again The question is is the dollar a bargain? It's harder to tell if it's a bargain down here AI in Against the Canadian dollar because the Canadian dollar is also, you know quite strong It's a commodity currency and in a risk on environment commodity currencies will tend to strengthen. So for me It's a bit of a tough one There are easier trades definitely out there to take even though technically I actually really really like this trade. So Personally, I'm probably gonna stay out of that But if you want to take that then, you know, obviously be my guest and again, this isn't financial advice Moving on to the New Zealand dollar US dollar Again last week, we did identify this area here as an area of you know potential reversal which happened to again coincide with some confluence of Support and resistance that level had been kind of touched twice already three times now for me I think this this zone here isn't necessarily the best Again the New Zealand dollar is a commodity currency and should do well with the US dollar also You know doing well again There are easier trades for me to take and more obvious levels and more obvious directions To kind of predict then looking at the New Zealand dollar US dollar But if you do want to get you know, if you feel like you need to trade this I'd probably say the level below that that's 70 50 and even the 70 Cent round number at the bottom of this zone would be a really nice zone to look for a buy trade Looking for sell trades. I would say the best area is not really here I would say it's probably around this zone here to look for any kind of sell trades if I wanted to be Getting short on a New Zealand dollar and buying a new the US dollar Moving on to the pound dollar and the pound dollar again to pretty strong sentiment currencies Because the the British pound has been really leading the way When it comes to the vaccine rollout and also as well, we've got a bit of UK news GDP so the UK economy shrank less than expected in January's lockdown Suspending on health and construction softened the slump and Brexit triggered a 40 7% drop in exports to continental Europe So the UK economy shrank less than expected during coronavirus lockdown in January Given by a surprise gain in construction and stronger activity in the sector. So gross domestic product fell 2.9 which is much smaller than the 4.9% contraction that economies had forecast The the government statistic office said gains from those segments also helped soften the 40 7% drop in exports to the European Union in the first month after Britain's exit from the block so better than expected GDP really which is always going to be positive for the for the UK and again leading the way in vaccinations The pound is probably going to be you know quite a strong currency going forward sentiment wise now again with two strong currencies You know Whether they're being given by sentiment or actually data These trades for me harder to take again if I was looking to take any kind of trades It would probably be to the short side because what tends to happen is if you've got two strong currencies or two weak currencies The likelihood that you'll see some sort of Ranging market at some point either it might range from there or it might range from around the you know The bigger range might be here is more Is is probably highly higher has a high probability of working out, right? So if anything if I'm gonna if I'm gonna probably trade this pair I'm probably gonna look to buy the dollar against the UK and I probably end up selling somewhere around this 1.4 to 1.41 area, but we'll see if prices do get back up to those Those prices for now we are in again a bit of a range between a high and the low So this is this hives has been seen as quite expensive Bottom of that zone has been seen as quite cheap. So from a value range perspective We did come up to what is known as fair value, which is 50% and Depending on which one you want to be a buyer or seller where it's the base of the quote currency This is obviously cheap for the dollar and this would be seen as a cheap area for the The pound GBP I should so I should put no GDP Right, so fair value But for me, I think if I'm gonna get take a trade on this I'm gonna look for any kind of short trades around this this this supply zone if it can come up to here But again, not the best Trade fundamentally to take but I do love this technically I do actually like that that that supply zone from a technical analysis perspective now moving on to the euro dollar euro dollar Um It is trade that I've been in from here and here been really really good trades and took some profit here Got a small position open on the pullback. So just looking for really pullbacks now my bias again is for long dollar and short euros and one of the Articles that I was reading over the weekend was that all eyes on Fed after ECB juices are bombed yield divergence trade so Basically the European Central Bank promises to significantly boost the pace of bond purchases is Threatening to turbo charge yield divergence with the US that could drive money out of Europe unless the Federal Reserve Ramps up ramps up its commitment to ease policy next week and basically the bond market is Is betting that the there's gonna be a recovery in the US and not so much in Europe So that's creating what's known as a bit of a yield divergence, and it's it's it's really kind of pointed out several times in this in this article So it says I think it's here from leader to laggard and global bond markets have rocketed so far this year on reflation bets But while the US and UK inoculation programs are steaming ahead Europe still remains far behind and expectations for price rises are lagging Yeah, so it was a reversal of sorts from last year when the region led the way in controlling the spread of the virus and Providing employment support via furlough programs. So again last year Europe were You know were seen as the leaders right in in supporting the economy hence the reason why you saw You know last year a bit of a move policies, you know were definitely seen as favorable for Europe Right, but now you're seeing a bit of a change in that whereas now the US is seen is being seen as Leading Europe and you're seeing this actually start to play out again fundamentals all price movements all major price movements Can be explained with fundamentals and risk sentiment? Yeah, and this is how we predict You know where prices are potentially going to go not when I want to get it right all the time Of course because there's a timing issue and things but we can get the overall Macro direction the long-term direction, right then Everything should fall into place Also in that article As well just to you know reiterate I guess the euro areas recovery is expected to lag behind most advanced economies in the garden noticed Sorry noted considerable uncertainty facing the region on Thursday and said Downside risk continue to persist in the near term In the US meanwhile output is expected to reach pre-pandemic levels by the middle of this year Which the recovery amplified by a wind-ranging relief package pushed by President Biden Some of that growth is likely to translate into higher demand for goods and services from the euro area The guard said though that wasn't Accounted for in the ECB's latest protection of 4% growth in 2021 So there are key differences as well between You know the stimulus packages and also that where the economy potentially is going and again Europe lagging behind lagging behind the US for me again, I will continue to take short trades And if we can kind of get back up to leaving this this supply zone here. It's another I guess chance to kind of You know get short around here and again We also have what would be some nice? Horizontal confluence where you've got support there support there support there support there should turn to what resistance So lots and confluence around this 2050 area and that we know this was a bargain for the dollar This was absolute bargain because we see prices Go to the downside sitting the first touches of levels are always the best areas to look for You know touches or I guess trades in the direction that you want to trade in from a fundamental perspective So for me you're a dollar Short spots if you do disagree or you see things. Otherwise, which are always Entitled to everyone's entitled to their opinions and you want to get long on the euro and short on the dollar And I'd probably say wait for a price to kind of pull back to this area here before looking at getting long so back to this 18 produce 18 118 50 or if prices do make a higher high then pull back into a zone because that would create a lower I'm sorry a higher low higher high in that area there And then you'd look for any kind of long trades within that within that zone Moving on to the euro yen and the euro yen And even though I'm short on the on the euro dollar doesn't mean that the euro yen is a short trade, right? But what we've got here is again the yen being seen is probably the weaker out of the two And the euro is You know making higher highs and higher lows So any kind of pullbacks into this zone here is a decent buy if you do want to be a buyer of the euro I probably wouldn't do it against the The dollar but I would look to buy the euro against the the Japanese yen It's a decent we've made new highs That's a decent zone to get long on if you were looking to get short There's no really immediate supply zones So I'd wait for proof of value meaning that I'd wait for price to really kind of go to the downside And then prove that there's that the Japanese yen is a bargain at this price And then look for a pullback to that supply zone before getting Short but in a risk on environment. I can't see the yen really being a buy On any with any currency pair Moving on to the Aussie dollar again similar to the dollar CAD and the New Zealand dollar the Australian dollar For me is is a buy but what I buy against the US dollar at the moment probably I say probably I definitely won't because again, you've got to you know Pretty much strong currencies of commodity currency against another currency that's growing so the chances of You know this being a bargain at some point is is very difficult to kind of see and they're really kind of established so We're kind of mid-range as well So between that high and that low if I'm looking to buy anywhere or buy the dollar It would have to be again at an all-time high If I'm looking to buy the Australian dollar it would have to be somewhere around a fresh area of supply for me though this currency pair isn't Great fundamentally is not necessarily the clearest technically though. There are some nice so this is a really nice zone a nice fresh area of supply Lower high lower low pull back to that really nice technically But we know that technicals don't drive price if the market doesn't see this as a bargain for the US dollar Because if you were looking to get short here It means that you're looking to buy the US dollar and if you're looking to buy the US dollar You're saying that the US dollar is an absolute bargain against the Australian dollar at this price point Now the question is is it really when you consider the Australian dollar is also, you know growing with GDP Is a commodity currency and normally does do well in an environment like what we're seeing now So for me, that's not it. That's really not the trade, but technically it's very nice So, you know currency selection based off of fundamentals and risk sentiment is what you know can keep you out of you know Lower probability trade so for me it would have to be up here At this 79 and again 80 cent range or probably at a fresher area of Demand but overall I'm probably not even looking at this currency pair to trade anyway But doesn't mean that you shouldn't Now moving on to the Aussie yen and as I've been saying Again, the Japanese yen is not going to do well in a risk off Sorry in a risk on environment in a risk off environment in Japanese when yen does very well But as we're growing as far as GDP, this is what you're gonna get right you're going to get this of course You're gonna get pullbacks, but you've seen this This trend since pretty much last year and it's really because of the vaccine rollout in the recovery so with that being said We are into this supply zone and there's no supply zone That's gonna stand in the way of Fundamental analysis if this is seen as a bargain for the Australian dollar Then there's no supply zone that's going to hold right in the same way There's no demand zone that's gonna hold if the market doesn't think that that that area is a bargain so What I will do is I'm gonna draw the supply zone there just for Just to kind of clear the chart, but there's also a bit of a you know wide demand zone here I would say that if I was looking to be a buyer I'm looking for a pullback into this zone and looking for probably some sort of intraday support and resistances and other confluences To look for any kind of long trades But I think the best area would be again down into this a bit of a better pullback into this 82 to 81 area the 82 round number does seem like a very nice A trade again prices pulled back into that zone there fresh areas the best area second touches are fine So I think my long-term bias is to buy the Australian dollar But I'm waiting for a pullback of this pulled back You know this goes through there then that'd be even better than I just wait for pullbacks into this a3 area as the It's the optimum trade and I want to draw also as well bit of a horizontal support In that area there Sick just change the color on that There we are and then finally we're looking at gold now gold like You know obviously trades inversely to the dollar So if you're if I'm if I'm buying the dollar then I'm gonna look to probably short gold now personally not a shorter of gold gold is you know generally Buy in the in the in definitely the medium to long term But in the short term while we have positive sentiment around the dollar I don't think gold would be the best place or is the really the best trade if we're looking to kind of buy Gold at the moment Especially with the fact that money is probably going into you know bonds as well because bonds And now paying a yield right a paying a yield So money's flowing really out of gold in a sense and into kind of bonds potentially the stock market in a risk on environment Yeah, the you know gold and precious metals don't typically do well in a risk on environment When I start to look to probably buy and accumulate gold again The wall starts to trade gold is more when inflation starts to get out of hand if there are worries about Inflation and that narrative starts to pick up then I would probably look for some sort of gold buying But until that narrative does pick up. I think gold may continue to suffer also as well There is you know a black rock article that says black rock or a they manage. I think it's Is it billion is it billions and trillions or something out and maybe seven trillion Well, they're a massive a really really big hedge fund and black rock says gold Failing as equity hedge faces risks. So global money manager Just deliver the double bowled warning on the merits of holding traditional haven gold right now Yeah, bullion is proving to be less effective hedge against moves in other assets such as stocks as well as inflation according to Russ Costa rich portfolio manager for black rock global allocation fund more of a gold faces headwinds that Or should the recovery pick up pace he warned in a blog post. So that's pretty much what you know I've been saying as well. So if if the if there's risk on Yeah, gold is gonna be a bit of a difficult buy at the moment and doesn't mean that gold won't pull back doesn't mean a gold won't go up, but I think the view on gold right now is Probably a bit bearish. So again, I'd have to really kind of see gold prove that there's you know It's it's a bargain at this price the 1716 80 to 1700 And then maybe a bit of a pullback into that zone before looking at getting long But for now, I think sentiment is against gold at the moment And with the you know, the US economy, you know picking up For me, I'm not really looking to trade this but there are obviously shorting opportunities And if you do want to get short on this Then, you know, this was this would have been a nice opportunity to get short again Intra day what you look for is pull back into a zone look for any kind of entry whatever your entry is and then look for a sell trade and Depending again on the sentiment. This is where Depends on how far prices will go right if gold is definitely seen as old the dollar is definitely seen as a bargain here Which it looks like it was that there would have been some sort of entry in there on a one hour 30 minute You know, etc. Whatever time frame you look to trade just make sure you've got enough downside risk and rewards So what I mean by that is if you're looking to enter Yeah on a lower time frame, which we always do and let's just say that that was your entry Yeah, that was your risk. For example, do you have enough downside potential? So for me, I always look for two to ones as an absolute minimum looking to double my money Before, you know, you actually get into some problem areas and what is a problem area? Problem area would be there and why is that problem area because prices reverse there and is likely to reverse Potentially or could reverse there now. Let's say for example, your risk reward is skewed and let's say for example You enter it somewhere somewhere down here. Yeah, you'll stop it somewhere here and look at your risk reward now Yeah, it's an it's basically, you know inverse so I'm always thinking to myself and there's a criteria is my you know, is my Risk reward downside is it worth it? Do I have at least a two to one before I even get to? You know that any kind of problem areas and if I do, you know, if it ticks those boxes, then I'm taking that trade but from a cell trade perspective again, it depends on whether you want to be a buyer of the Dollar and if you do want to be a buyer of the dollar then an option would be to kind of sell gold When it comes to buying the dollar anyways guys, that's it for this week I really do hope you have a great trading week and I'll try and get back to the comments on YouTube. Thank you for all the positive comments and questions and queries and Yeah, I hope you all have a great trading week and until the next video. Take care