 Hi, my name's Leon Roe currency trader and trading coach at trading 180 comm and welcome to this week's supply and demand for us Technical analysis if you're new welcome, and if you are returning Welcome back, and I really do hope that you find my analysis every week useful and applying it to your own trading so we start off with the week ahead When it comes to fundamentals and sentiment because that's what really drives the market and we understand fundamentals and sentiment because We want to understand value and bargain and where we're what we're buying at bargain prices. So Um in the week ahead trading economics website, um, we have next week's important release include us inflation. That's very important um And that really sets the tone for the federal reserve central bank monetary policy, whether they're going to be Holding or cutting rates a lot of traders are pricing in Say a lot, but traders are pricing in a A rate cut this is actually gone down slightly since I think Friday Um, this was at about 32 and now it's gone down to about 25 and this is just a the CME group fed watch tool and this gives a guide on what the sentiment is and what the financial institutions are doing um, and pricing in with regards to rate cuts and rate holds and hikes so federal reserve I think has a 25 chance based on, um financial institutions sentiment and their positioning on a an ease cut or 75 percent is no change so um sentiment wise, um potentially there could be a cut and this was really based on last week's um figures non-farm change um kind of added to that and it was the lowest figure in a while 75 000 jobs were added which potentially means that the US economy is slowing down so no, you know, no increase in jobs massive decrease in new jobs created so, um inflation is definitely now being watched and if it comes in, you know, way under target then I guess that the federal reserve may start to look to cut interest rates but for now if inflation is at their 2 percent target then we can assume that the federal reserve may want to hold and have a wait and see approach so um again coming into this week's uh news data, so you've got UK unemployment monthly GDP and trade balance China foreign trade consumer prices I think that's going to be important as well and retail sales Japan final first quarter GDP growth and machinery orders that's going to be an important one for Japan and Australia unemployment figures business and consumer morale so uh, we've got quite a lot going on this week from a sentiment perspective we have, um the front pages of, you know, Bloomberg we have really, um the trade war still in the background when it comes to the G20 meeting they are focused on that also have Italy confident of complying with Europe fiscal rules so that's in Europe European risk at the moment from Reuters you have Trump is confident Mexico will enforce new immigration deals so that if they do then that could maybe ease some of the risk off sentiment because uh Donald Trump, you know, was potentially in um enacting I guess some uh some trade tariffs on the Mexican economy which meant that um they get again a lot of uncertainty as to what he was doing with regards to potentially trade conflicts and also from market watch we have oh the uh Trump's suspends plans to impose tariffs on Mexico after reaching a deal so um this could be potential risk uh or less risk off when it comes to uh the dollar so potential dollar buying opportunity this week so let's get into the technicals and we start off as we always do on the dow jones dollar index so from uh last week what we had was prices come up into the supply zone and again a bit of weakness if we look at really what's happened over the past you know probably like you know year or so we've had this um massive you know long-term uptrend and this is really due to again fundamentals and the U.S. dollar being the strongest economy um raising interest rates um out of really the um the major uh economies and now we're getting into a cycle where we could potentially be entering into a bit of a downturn so what you've saw what you're seeing now is a bit of uncertainty around the dollar and you've had prices come down a bit and this is just normal these are pullbacks does it mean you should sell the dollar well that's a question that you have to answer and really the dow jones dollar index to measure with dollar strength against the major currencies like the euro yen the british pound and the australian dollar um so we did get a bit of a sell-off which is probably really due because prices don't go up forever so um if we enter this week into um you know and uh the interest rates as we just spoke about come out as expected or even maybe a bit better then we could have move to the upside so let's go to the chart so what again we're looking for this week potentially is a move to the upside or what you'd be looking for is for prices to kind of drift down and then you know move to the upside if you're looking to buy the dollar if you're looking to sell the dollar this week we could potentially be looking at this supply zone look at supply from here as we've made a new low new lower low so you've got the supply zone here so then what you'd be looking for is a move back up to this area before looking at getting short so again it all depends really on um you know dollar sentiment this week moving on to the dollar yen the dollar yen from last week risk being um really off the yen is a beneficiary and its strength is in a risk off environment so with the trunk trade wars with china we did have a bit of a move lower and now we've got a bit of a wait and see approach with the yen um they could get some positive sentiment as well trade deals could be done we could you know the Chinese could come out and actually say you know what we'll do a deal and in that case risk would be more on then off and we could see a buying opportunity um at the moment but again with the dollar being potentially sentiment wise a bit weak then we could see some downside but we're in a wait and see position this is a nice buying opportunity to be fair like this area of demand so if we believe that the dollar is going to gain a bit of strength in inflation it's going to go into coming to the market then what we'd be doing if we go to the chart is looking for some buying opportunities right now to the upside and if we were looking at sell trades then we'd be looking at really prices to come up to this daily supply zone before looking for short trades or we would have to wait for price to break lower this creates then a supply zone as the supply would take out demand and then with price to come back into the supply zone and then look for some short trades around here so this is going to be purely if you're buying the Japanese yen it'd be you know risk off and really what you want to do is look at the headlines and see um what the sentiment is before basing your trading decisions on just dollar strength or yen strength so moving on to the dollar swiss and dollar swiss this week again swiss frank being a beneficiary of risk off sentiment the swiss frank will tend to strengthen and again there was some negative sentiment around the US dollar as well as the uh the non-farm numbers so what you've got is a move all the way pretty much down here taking out all this demand there was no demand fundamentally or sentiment wise for the um for the dollar when I say no demand um I mean there was probably a little bit of demand but the market obviously is thinking that risk is off hence the reason why you shouldn't base your trading decisions solely on technical analysis fundamentals will give you and risk sentiment will give you your directional bias right um and again that's not to say that you should necessarily be buying the swiss frank but um we know that this week this is pretty much what's happened the data has shown it so looking at the uh dollar swiss we are down into a bit of a bit of a level where we've got two demand zones there demand right this level I think for now I'm gonna probably say it's gone so I'm gonna delete that and I'm going to this is a bit of a supply zone but it's not the strongest supply zone the reason why I say that is because my rules really dictate that um you want to see a lower low before creating a supply zone but because we've closed down here and that level of demand pretty much is is from around this level this 99 level I would probably say is gone um I'm willing to put this as a supply zone so what you want to do is look for prices to come up to here before looking to get short if I was looking to get long based on the uh demand zones I wouldn't be getting long based off of that previous demand zone which was actually around here right which was that zone there I'd be waiting for prices to kind of come down into this demand zone here before looking at some long trades and I like this and many of the traders will also understand that taking the course and this is a nice CPR retracement CPR zone as well very nice CPR zone here at this this level which put a resistance zone yeah so I do like this as a nice CPR level so um in this area nice buying opportunity for looking to buy the dollar again you want to probably see some uh some some dollar strength again we would look at the dollar index if that starts to turn up and uh dollar strength starts to come into the market as we're down into this demand zone then we're looking for buy trades if not up here then look for sell trades moving on to the dollar CAD and the dollar CAD Canadian dollar has actually strengthened got some very good news last week regarding employment way above expectations of 5 000 new jobs increased to 27 and a half thousand and an unemployment rate also went um uh beyond expectations great numbers for the Canadian dollar so looking at charts and we want to see is the CAD we can see that really price is now taking out you know supplies taking out demand so there's been an appetite for buying the Canadian dollar as you're buying the quote currency it's taking out demand right here for the dollar all right so we're down into this decent demand zone down here now so let's go to the charts and update this so what we have now is the Canadian dollar strengthening so what we have let's uh go to that to that can update this here as well your supply and this is proof of value so it's basically prices have proven that the Canadian dollar was a bargain at this price and you can see what's been happening here so into next week if you are looking to buy the Canadian dollar then you'd be looking for potential pullbacks into a level of supply like this before looking at getting short if you are looking at buying the dollar at the moment then this area of demand is where you'd be looking to really start to buy the dollar but just be it might be aware that this level is touched several times once twice three times so at the moment you're buying dollar strength or US dollar strength if there is any against a quite strong Canadian dollar sentiment wise so maybe long trades on this currency pair aren't the best trading opportunity at the moment I'd probably say maybe to the short side if you are looking at trading this currency pair so waiting for potentially a pullback into supply before looking at a short trade so next is the New Zealand dollar US dollar and this week we came down into this demand zone here and due to US dollar weakness we did get a massive move up and New Zealand dollars been doing actually quite well when it comes to their economy so this is what you're seeing you're seeing some weakness on the US dollar and strength on the New Zealand dollar and you can see where prices have really been taking out a lot of the supply zone for the US dollar so go into the charts it wasn't any appetite really for buying the dollar at any of these supply zones due to the bad data which is increased price at the moment to a decent level really to try and get short if you were looking at buying the US dollar so right now we have prices up to here we could see some profit taking going on at this level we also have a level that's been used once twice three times support term resistance within this supply and demand zone so a decent short if that doesn't work out and we get some more dollar weakness from a sentiment perspective you'd be looking at some of these areas here got supply which also got a bit of supply around there if you're looking at buying the New Zealand dollar then really be looking for prices to kind of come back into this demand zone here so prices would need to come all the way back down into here before looking at buying opportunities you can delete that as well so I think we could potentially be entering now into arranging market at some point between these uh this supply and this demand zone we've had a nice little trend down and after a trending market we tend to enter into a arranging market now is this the place where price may enter into a range could do especially with inflation numbers coming out and if inflation numbers meet targets or they're not as bad as what is once thought then this could be a decent buy for the US dollar again keep your eye on the dollar index so pound so next currency pair to analyze and the pound really has been suffering from negative sentiment due to brexit a lot of uncertainty we've got the conservative government leader contest and brexit is still on the table so we did get this week a bit of a some demand at this zone right so you had the demand zone you also had a level of support as well within that demand zone so you had definitely proven value but is this pound strength or is this basically based off of dollar weakness and I think this is more dollar weakness than pound strength there is a nice zone this is coming into I do like this 128 127 level to try and look for short trades so at the moment you do have this supply zone so looking at short trades you've got an opportunity right now you've also got that level that went 28 level pretty around there's my preferred area all I do is get rid of this longer term demand zone got demand here we've also got a bit of demand here as we did did make higher highs there so prices if you do want to be a buyer of the British pound you'd be looking for that be your first demand zone but I would say the better area if you're looking to buy the British pound to be down into this lower demand zone this 126 area but for me this looks like a decent short trades opportunity and if not then it'd be really up to this higher level it's 1.30 level before looking at any kind of short trades which are getting in really the dollar at a better price your buying a dollar at a better exchange rate because in the lead up to brexit which really is going to be October the 31st there's going to be a lot of uncertainty and a lot of uncertainty with the British pound so short trades for me all the way on this currency pair euro dollar and the euro dollar since last week again we've had some dollar weakness and they come up to this area here looked like it was selling off and then you've got some weak non-farm numbers so demand for the US dollar again faded and the euro kind of works in opposition to the dollar so when traders are not buying the US dollar in certain situations they kind of go into the euro so you've seen the euro rally but Europe isn't doing any better than the US dollar so this for me is just is allowing me to buy the dollar at a better price you know to get short and that's just my opinion so looking at the euro dollar in fact what I should have done is drawn the supply zone from there all right so if you draw the supply zone from there as that was a the the swing we haven't quite broken this level yet so if prices do start to turn lower from sunday's open I think that is a decent sell if not you'll be looking for prices really to come up into this zone before looking at sell trades and again look for structures within this wider supply zone either on the daily or intraday all right so within that supply zone so because traders will say well this is quite a wide zone how do I know what area this is going to you know bounce off of well within that wide zone you do have daily resistance resistance so you could wait for price to come all the way up to here or you go down into maybe a four hour and look for some intraday zones and it looks to be one right here see it around there just around there move back a little bit so yeah just on the underside of that level where you have resistance bit of support so bit of resistance here support resistance bit of support where it held bit of resistance there so we could look at the 1.137 level here has a level to look for first shorts but I think this 1.14 round number will be you know above would be probably the optimum trade to the downside if you were looking at short trades looking at long trades and let's delete this and let's delete this this would be where your demand zone is right there like that so you'd be looking for really a pullback into this level here before looking at buy trades if you're looking to buy the euro and take advantage of this this uptrend over the past you know week or so so moving on to the euro yen in the euro yen again some risk off sentiment coming into the market did have a bit of a you know move sliding me down but now we've got a bit of a respite so euro is strengthened a little bit let's go to the charts so there was a bit of supply here that's what looked like on the intro there you would have probably seen if you were going trading the one hour it was a trading opportunity right here up into that supply zone look for a short trade decent maybe one-to-one type move if you're basing it off of that engulfing type candle but then we've had you know again a bit of a respite markets don't move down forever so now we're up into this supply zone I still think that there's a risk off environment so if you're looking to trade the yen then you'd really be looking for prices to come up into a bit more confluence this area here before looking at short trades or again looking at intraday levels before looking at potential short trades there we can get rid of this supply zone as prices have made new highs and I'm going to add this level here as a level of demand as we've taken out some supply right there so if you're looking to buy the euro then again waiting for pullbacks into the lower end of this area before looking at getting long but risk off the Japanese yen does well in the risk off environment so anywhere from probably now and it's higher level on a demand on a daily time timeframe chart within this supply zone is you know very decent I do like that area moving on to the Aussie dollar and the Aussie dollar this week we had a bit of again dollars US dollar weakness so there really wasn't any kind of supplies I'm working for on this currency pair now we are where we are around this 0.7 round number which I do like for potential shorts as the Australian dollar is still very weak they were an interest rate cutting cycle and the expectation is for them to cut so this could just be a potential pullback and I like this for potential short if not if this trade pretty doesn't work out depending on the entry then you'll be looking at this area here as a for short trades the supply zone is still here it's still valid the same thing for the for the move above but short trades depending on again what happens with the US dollar could get some against some negative sentiment but I think overall the US dollar is really the pair to buy on this this currency pair the Australian dollar is for me a sell and they're most affected by the Chinese trade war as well but again just dependent on the data that comes out for the US and also the Australian dollar and finally we have the Aussie yen and Aussie yen this week had a bit of a turn up into this supply zone here again I think overall that as long as risk is off and trade wars are still in the papers you could still get a move higher why you still get to get a move to the high side and say hi but you know to the upside but looking at the chart that is pretty pretty just you know just some sort of pullback and again unless the trade war is really this you know is resolved I think there is a there are a lot of fears when it comes to what's happening globally global slowed down so the Australian dollar isn't going to do well as it is a commodity currency so commodity currencies don't do well in risk of the environments going to delete this one for now and add a bit of a demand zone right here so if you are looking at a potential reversal you're looking at prices to really kind of come down to this demand zone right here before looking at long trades but if you're continuing to trade the Japanese yen and risk off to the downside then you're looking at you know this higher area here this 76.2 level or thereabouts or just above this 77 round number would be the optimum short so that's it for this week hope you enjoyed it please like subscribe and share if you do have any comments definitely leave them in the section box below and I'll get back to you as soon as possible so guys take care hope you have a great trading week and I'll speak to you soon