 Hello, my name is Leon Rowe, Covenancy Trader and Trading Coach at Trading180.com and welcome to this week's supply and demand Forex Technical Analysis. If you're new, welcome and if you are returning, welcome back. If you are finding my weekly videos useful, I'm very glad and let me know if they are in the comments section below. If there's anything you want me to cover that I haven't covered already and I will attempt to get back to you as soon as possible. Also, the pairs that I'm going to be analysing are time-stamped in the description box below if you're watching this on YouTube, so you can skip to your favourite pairs and yeah, we'll start off from the fundamentals as fundamentals and sentiment is really what drives the market and how we determine value and bargains in the in the market and it gives us our north star, really, our directional bias on why we should be buying one currency over another. So Trading Economics great website is what I use. So for the week ahead, we have important data releases includes US consumer and producer prices. Why is that important? because inflation, US inflation and they're the Federal Reserve and I guess Donald Trump as well want to get to and all central banks really want to get to that 2% target. The US is at 1.9 at the moment so it's it's okay, but they want to basically get to that 2% target or there or there about some consumer prices or producer prices are an indication of inflation. So trade balance always a good one GDP and Jolt's job openings, UK first quarter GDP growth is going to be decent as well, potential mover, foreign trade and industrial output, Germany factory orders and trade balance again Germany being the powerhouse for Europe if Germany you know aren't producing and their trade balance is low then it sets really the tone for the rest of Europe again China inflation that'd be a risk on risk off play the foreign trade and Services PMI in Japan consumer morale central bank decisions in Australia That's going to be a mover as well. So central bank decisions meaning whether they're going to be hike holding or cutting They are they have been dovish to be fair so Potential don't know whether they'll be cutting this one But within this year the expectation is for Australia to start to look to cut interest rates also New Zealand, Thailand Malaysia, Philippines Brazil, we don't trade those but New Zealand as well have been fairly dovish in the spotlight as well as US China trade talks and again that would be more risk sentiment If you want to know about fundamentals and risk sentiment the link is in the description box below Which is the fundamental analysis course absolutely free click on there? and I show you everything you need to really know about fundamental and sentiment analysis so why fundamentals and analysis gross domestic product inflation and interest rates the relationships between them and Really how to determine value On a price chart when it comes to currencies and if you click on the Fundamental analysis spreadsheet it will take you to This spreadsheet, which is just a general view of what I am on each currency So bullish on the dollar and for those of you who've been following me for a while You know, basically he's been buying the dollar for for ages Neutral bearish on the euro. So, you know, you should be really be selling Or buying the dollar over the euro on the euro dollar currency pair, you know, that's a short So you'll be looking at supply zones And again, this isn't financial advice. This is just my opinion. Do you derive this from my fundamental analysis and well, this isn't necessarily sentiment. This is more just fundamental analysis um bias on the currency pairs and then you can choose What currencies you want to be buying or selling so getting into the uh, the technicals now and we start off every week as we always do on the Dow Jones dollar index Dow Jones dollar index from last week We came up into this supply zone and I was uh Expecting polly prices to uh, sell off a little bit and this was probably due to the anticipation with FOMC this week and also You had non farms, which uh, both came out FOMC was pretty much a neutral In in the federal reserve stance and the uh, non farms came out actually much better than expected I think GDP also came out quite good for the for the dollar Average hourly earnings, which is a beginner measure of inflation Uh, was quite was was was was okay came out as a thing as 0.2 So what you had this week was a trail off then you had to move up right into, um, you know the FOMC as well as You know other, um, non farm reports Prices of pullback now this for me is an opportunity to buy the dollar Um, I'm not concerned with pretend, you know cells or anything like that and selling the dollar Compared to every other major economy in every cover currency that we trade The dollar is really the the strongest if you compare GDP inflation and interest rates So they're way ahead of everybody else So look for prices as you know, these kind of pullbacks Not as um a way to say oh well, you know, it's good news So and and fundamentals don't work just look at it as value you're buying the currency Uh, um when you compare it to everything else for cheap and really how do we buy? You know cheap prices have to pull back at some point so, um You know areas I wouldn't be buying on the necessarily the dollar um dollar index But I'll be looking at the dollar index once it starts to turn up as an overall gauge of dollar strength and then look for some uh, some uh, some buying opportunities on any of the dollar Crosses so as we're down into this demand zone We could be looking for some potential strength this week And if not then when prices come down here then, um, we can get some potential strength Then we'd be buying any of the dollar, uh crosses. So Um Looking at the an update and I guess the charts What do we have here? I'm gonna I'm gonna keep that demand zone there for now Nothing really much has changed getting prices came back up into this, you know supply zone um So yeah, I think everything is pretty much as uh, as it was last week any changes I'll be updating them on the trading view Profile but for now, I think that's it's okay for this week if prices do come down to You know past this area Then we'll be looking for again some buys and we have some confluence here. We've got diagonal support We've also got a level of demand which is value proven value proof of value as I describe it Um And uh, yeah pretty decent right here. I guess you've also got if you want to put in bit of a level Not necessarily the clearest level, but there is something, you know, right there As well we've got resistance resistance Uh bit of resistance here again and some support around here. So lots of confluence in that area Uh, so looking for any kind of buy trades for the dollar from a fundamental perspective moving on to the dollar yen and So last week We did have a bit of a set off and I was looking at buy trades in here. It was predicting buys In this level, we did get you know buying opportunity Also, we didn't get a buying opportunity prices did react to that demand zone Now we're back in which is brilliant and I'll again, I'll be looking for some buying opportunities now Um this week on the dollar yen So now we're just looking for prices to really kind of turn up anywhere from now to um To maybe at some point this week Risk it seems to be on the stock market is making, you know, high highs and uh Risk is on then the Japanese yen Doesn't really benefit in a risk on the environment the dollar would um But if you are looking to take advantage of any kind of risk off sentiment that does come into the market And then you'll be looking at supply zones. So here are your supply zones. I'm gonna move this one here That is a supply zone Got another one here. You've got a bit of a Uh cluster of of supplies. We've got lower highs and lower lows like this Actually, in fact, what I'm gonna do is I'm gonna remove that one there As we haven't made lower lows yet. I haven't passed This low Really gone past this low. So those are the two uh supply zones that we're looking for And then what you would do is within that wider zone of supplies look for um other confluences like support and resistance Diagonal support and resistance, etc. Right and dynamic as well Um, so moving that across this looks like a great zone to get longing Um, and I will be looking for long trades if I see obviously the right type of uh Price action and candlestick formations. Again, this is not a recommendation to buy or sell Definitely do you know your research, but um from a fundamental perspective the dollar is a buy Moving on to the dollar Swiss and the dollar swiss Again, we was looking for Pullbacks this week and uh, again with FOMC we did come back into this demand zone And we did get there were some buying opportunities on the lower time frame Again, just because I tried the uh, I guess I tried the higher time frames like the four hours The risk reward really wasn't there for me. So I kind of sat out on the uh On that trade and I really explain Right where you have this large bullish candle But From a risk reward perspective That was really the risk reward even if taken up to the absolute highs one to one Or near enough is not enough for me to get involved in that type of trade So what I'll be doing is looking for again some sort of pullback into a level Before looking at any kind of long trades Um, and hopefully we can get, you know, some smaller, um bullish candles, which makes the risk reward A lot better. So for example, if that's potentially the risk reward, you know, that's uh That's a much better risk reward and we don't have to necessarily trade it up to the highest to make a two to one so, um If you're looking at cells at the moment You do have Better supply right there Coming into the market. So, um, if this doesn't work out this level doesn't work out the next Really level you'd be looking at buying the dollar would be anywhere around here if prices do create some sort of Move where it goes like that and then you get move higher creating higher highs higher lows and then you'd wait for a pullback into that kind of demand zone so, um That's that for the dollar swiss looking at the dollar cat and the dollar cat this week um cat is strengthened when it comes to um Overall Cat strength really compared to everything else um There was a buying opportunity again prices came down into the demand zone flew up So anybody I was saying to the to the to the group that I mentor that um, I can't believe I missed this this trade It was a nice entry on the lower time frames around here But no matter, you know, we can't get them all and um right now what we're looking at is dollar cad It's probably a move down into a fresher level of demand before looking at getting long, um What you do have is some supply at the moment as you have Lower highs lower lows being made so you got there pullback and then a new Low so that becomes a level of supply and uh, yeah decent level but Again on this pair, I'd be looking to buy the dollar What you want to do is take a look at um oil as well if oil is is is um Is going higher then that adds to a potential canadian dollar You know sell at supply But from a fundamental position, you know, the dollar is really the the better The better buy Um, obviously we got the new zealand dollar Uh, us dollar and from Last week we ended up coming into this uh supply zone and again opportunities to get short This area here um The new zealand dollar has weakened a little bit, but it's still probably maybe one of the top four currencies um, but decent short From that level if you managed to get in on that well done So, uh, you know here was again Dollar short, um, nothing's really changed to be fair. Um on this currency pair I guess what you could have done as well is added the uh diagonal Resistance right there that would have added the confluence of that, you know trade Um, but right now what we're looking for is What you're looking for is a move Either up into this zone a second touch of a sort of a supply zone is okay Um, but I'd probably be looking for here to really get you know to get short again Looking at this area. This didn't really represent decent. Um for me anyway in the time frame that I trade A good enough risk of water the downside Um, but I'd be looking at this level here as a level to get short on the New zealand dollar us dollar If you're looking to buy right now again decent buy trades potentially right now if you think that the dollar US dollar is going to get weaker against the new zealand dollar the new zealand dollar is going to strengthen So moving on to the pound dollar and the pound this week Made a bit of a run And we did have prices kind of break through that supply zone there with a court probably a lot of traders out Um, this every level was quite obvious So a lot of traders were looking at short trades here because what does what happens is support becomes resistance There was a bit hidden Supply here and I was looking to get short here, but again with the right kind of uh price action We ended up waiting didn't take this trade as the dollar was strengthening and now we're really up into this zone here Your trading again, even though the dollar is the uh the stronger currency I would say the dollar the pound sorry has uh some some positive sentiment around it But now is probably a decent short just above that level, you know the one three two Level I would say is decent not necessarily the best pair to trade As you're trading pretty strength against strength. You want to really be trading strength against weakness So, you know pairs like the dollar uh dollar yen dollar swiss are probably the better pairs to trade from a fundamental perspective But um, uh, we've had this move higher a bit of a pullback move higher Um, so anywhere around these levels if we're looking at it from a value perspective and let's go to Pound dollar if you're looking at this being the overall range from the high To the low and those of you taking a course We'll know exactly what i'm talking about If we're looking to buy the dollar then what you're looking at Is this everything above 50% is going to be cheap. So this is fair value between an expensive And the cheap level so you're looking at now Levels here this pretty good coincides with some sort of 61.8. Fibonacci, etc But the higher you go is the Better value you're buying the dollar for So, um, anywhere up here looking for shorts. We can also clear some of this off as well clear that off clear that supply And we are into this supply zone here. We've also created Nice demand zone Nice demand zone there So what you also have is if prices do start to pull back and you want to be a buyer at a pound that is a decent decent level for many reasons And one main reason is that Again, I spoke about this in the group is uh is the capture pain relief. This is a this is a very good capture pain relief trade right here, but Just if you want to be buying a pound you're gonna be buying a pound there from a from a Dollar perspective again, we'll be looking at probably looking at shorts anywhere around here looking to take advantage potentially of some Dollar strength and some pound weakness doesn't mean we are 100 going to get into it. We have to obviously look at You know what price does at certain levels? But uh, yeah decent shorts coming in Um, but fundamentally not necessarily the greatest euro dollar, let's look at the euro dollar And again all week we were looking at this trade looking at short trades here analysis was correct analysis was definitely correct on this one We've got a nice Supply zone there proof of value prices come back up into this zone And then get short the only problem was is uh, um non farms didn't allow us to get in I did a video this week, but I will be looking at getting in Short at this level of prices return to here Again, if you're in the trading 180 group, you'll know exactly why and in fact, um, there is a video in youtube I released I think on the wednesday explaining why on a lower time frame CPR this is a nice CPR zone So I'll be getting looking to get Short around here and again providing the right type of price action Not going to just blindly You know sell here. I know a lot of traders do use pending orders But we want to see some uh some supply come into the market on an intraday time frame um If you are looking to buy then this was decent demand zone again prices came down in And uh, this was your buy trade if this level doesn't work out It's okay. We can buy the dollar for cheaper to the uh To the downside and um There was a comment on youtube matter of fact By gentleman By the name of howard hill who Was talking about in the video with a special invite only supply and demand for x webinar And he said, um, just a suggestion to consider for clarity when talking about shorting euro dollar Rather say Short the euro from the supply zone because it's overvalued in that area now Um When it comes to buying currencies and supply and demand what you should be really thinking about is um Is is value and bargains and cheap prices? We tend to go to you know, we tend to shop and we shop and do bargains It's easier for us to look for what something is undervalued or a bargain That's what we're drawn to when we go into amazon if you're in you know, you go to you know Supermarket we're looking at bargains, right? That's the reason why we buy We tend to not look at things as overvalued You know or or expensive I mean we do obviously look at things as expensive but What we should be doing from a supply and demand perspective is more look for bargains, right? I'm not going to Short the euro because of something is overvalued I don't know whether something is overvalued or not But I do what I do it's easier and what I do know is that the dollar is definitely a bargain at certain prices Yeah, and I get this is definitely maybe confusing to a few of you Right, but you need to understand what the base currency is and the quote currency Right, so from from a base currency perspective and the quote currency what I mean by that is you know, you've got oh, sorry You've got and what I'll do matter of it and drawing it on here I can just go back to the chart Right for the euro dollar. Yeah base currency is the euro the quote currency is the Dollar yeah, so when we're talking about buying the dollar you have to buy the quote currency which means You know when you're pressing When you want to buy the dollar against the euro you have to press sell Yeah on your broker. Yeah, so I know it's hard for traders to get their head around But what you have to do is look at buying the quote currency and buying the quote currency is A short trade and shorting and short orders are supply. Yeah That's the way to look it rather than looking at something as the euro being overvalued. Yeah It's the dollar is a bargain at this area um So hopefully that clarifies Um, you know that for any of you who did have that question So uh, yeah continue on with the analysis Really what we're doing is um, you know buying the dollar for cheaper up here First area is going to be here. If that doesn't work out, then we're going to be buying the dollar up here If you're buying the euro, then you'll be buying the euro at demand zones um Yes, so moving on to the euro yen Euro yen this I really wanted to actually get short on this From up here, but we just didn't get the opportunity and prices are really Falling away and the reason why I'm getting short on this is on the euro yen Is because there's going to be some risk a lot of risk sentiment coming into the market Why do I say that is because you've got the european elections coming up. You've still got brexit kind of hanging over europe um, there are talks of the um The dollar and trump and euro trade negotiations as well so europe is in a bit of uh In a bit of upcoming Uncertainty a lot of uncertainty around around europe at the moment And you're starting to see that play out in the markets again The guys will know um that I was calling for this move up They moved down from a few weeks back. They just didn't get the uh, the zone that I wanted the 127 um, they're about number and prices have really kind of gone on their way, but I can see um as long as again europe remains um in this uh in the european elections trade negotiations with america And also the fact that they are not doing too well GDP wise, uh, the euro is probably the short At the moment So again going to the charts and this is really just a sentiment play, you know, this is risk off you buy the yen against the euro So what we have now is uh, if prices do create a lower low meaning that they break below that low Then and I say break below, but just a bearish candle below that low then that would be a level of supply There But until that happens, yes, there is supply, but it's not necessarily the strongest level of supply from a daily perspective So what we'd be looking for is prices to really kind of come up to here And then look for any kind of shorting opportunities and again risk would have to be off for me to To look for shorting trades here if there is you know, uh, um things get sorted out in europe And everything is is lovely, you know in germany and the european elections Then the euro is probably a buy and I would say More so if you could get down to this wider Demand zone, especially if we get down to this this confluence area Of uh, let me adjust that area matter of fact Let me just put it just this The supply demand sorry the support and resistance zone probably you're looking at something more like that now So if you get moved down into this area here, it has been touched several times So probably just underneath that would be the better area And I'll adjust this as we go forward as well But um, those are areas to really to buy but i'm looking at probably sell trades as we go into You know as we come into the european elections Um next is the ozidola and the ozidola Um Really hasn't gone anywhere this week australian Dollar is weak again dovish tone from the central bank the dollar the u.s. Dollar being the stronger out of two So um this week. We only really had um a bit of a move down bit of a retracement From this uh level in this level of demand where you've got you know, uh support as well Acting but I probably expect this level to really kind of break um Let's go to the charts So what i'm expecting is if prices start to break down What i'm going to do is i'm going to move this demand zone probably just around There's not necessarily how I do draw demand zones, but just for a bit of clarity um If price starts to move down then You're looking at a move back Into that area as that would create supply and then you'd be looking at also A move or uh, that would also create that supply zone as well. Yeah, and you're looking for shorts right there, but for now um Not yet, you know not yet This is a level of supply, but we need to see probably a bearish candle closed before prices really um Also or bearish candle wick at least before we can can kind of consider this area this area here is a strong area of supply If we don't get that then This will be where You know the uh the shorts or we could create a level where we get a move like this And then what you'd be doing is looking at Prices to come back to either This area here Or that area there So, uh, lastly moving on to the Ozzy yen and the Ozzy yen This week, um, you know, we've had Prices kind of spike up I don't know why that spike was there. I'm not sure why that spike was there matter of fact. Maybe it's just o'ander's um feed Don't remember seeing this spike up earlier, but yeah, um Again, uh, australia being a bit weak at the moment. Um, we have um You know the the yen strength again risk probably potentially coming to an uh into the off stage Um, or it could just literally be just some australian dollar weakness if we do get some uh Some australian dollar positivity. I would say this 77 50 77 round number Is where we want to look to be buyers so Ozzy yen again risk on We're looking at this area here before looking at buy trades Um, if we're looking at sell trades, then I'd have to probably draw it from there to there It's going to be where actually matter of fact That whole area is that's hidden supply That whole area wide area But then what we would also do is within that wide areas look for areas of Support and resistance. So what you really want to be doing is probably those areas there as areas to potentially get Short if we're looking at short trades and taking advantage of any kind of risk off sentiment Just move this up a little bit. Yeah That's decent Yeah, so those are the areas to potentially get short if risk is on Then you're looking at this area 77 5 to 77 Or thereabouts to look for uh, you know any kind of long trades So, uh, that brings the conclusion to this week. I hope you enjoyed it Please don't forget to like subscribe share comment again. Your feedback is uh, is very welcome I know a few of you guys wanting me to add some extra pairs on here I won't be adding anything outside of forex. Yeah, so if you're asking me about gold about oil about stock market I specifically deal with forex So, uh, I won't be adding those and uh, I may consider adding maybe a couple of other pairs if you know the demand is there to do So so Yeah, I hope you have a great trading week and again any feedback, please leave it in the comment section below And manage your risk go for more than you risk and remember that if you're going for two to one At the minimum you have to have a 35% win rate in order to just break even right So can you be right more than 35% of the time going at two to one to three to one to break even and not lose money on your on your On your on your account. You only need a win percentage of 25 percent of every trade you're going for three times the amount then um to break even you only need to win 25 percent of the time manage your risk go for more than you then you risk and um Also, don't over leverage. This is not a uh, uh a sprint, you know lambos and and all that kind of stuff You know, it's it's um, don't get drawn into that just Manage your risk slowly, you know, and then you can start to scale. So uh, just a bit of advice there and uh Getting if you have any questions, let me know. So take care and have a great trading week