 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com and welcome to this week's supply and demand for us in gold, fundamental and technical analysis. Now, let's look at the week ahead starting July the 31st and it will be a very busy week. Zoom in a little bit, right. It'll be a very busy week this week with US non-vampire roles and earnings reports taking centre stage and the US investors will also be following factory orders, jolts, job openings and ICM manufacturing and services, PMIs elsewhere, central banks in the United Kingdom and Australia will be deciding on the course of their monitoring policy. Additionally, in the spotlight will be on a second quarter GDP growth rates for the Euro area, as well as inflation rates for the Euro area, Switzerland and finally China will release manufacturing and services PMI data while Japan, Germany and the Euro area and Canada will publish in unemployment rates. So lots going on this week fundamentally to potentially data to move the market. So before we get into the chart and some other fundamentals, just a reminder for the guys that are in the discord group. I have updated the fundamental analysis spreadsheet with my bias, biases on the pairs as well. And you can watch the members videos as well in the trading videos channel. And so I've got the technical analysis as well as the weekly fundamental analysis videos that go into a lot more depth. As well as previous videos that I've got setups on. So that's for the members now getting into the dollar index and looking at the dollar first. And really this week we had US growth accelerate to 2.4% which was a surprise on resilient consumers and companies. Business investment robust and later state are likely to add to hopes that the US can skirt a recession. So the US economic growth unexpectedly picked up steam in a second quarter thanks to resilience among consumers and businesses in the face of high interest rates. And so yeah it was a bit of a surprise and the US economy is in better shape than economists had expected. It would be just a few months ago while forecasters are split on the odds of a recession. A strong labour market, sturdy consumer spending and now easing inflation have fueled hopes that the US will avoid a downturn. And so it says here that Fed staff are no longer forecasting a recession. Jerome Powell said Wednesday after the central bank raised its interest rates by a quarter percentage point. Powell said that his own expectation that the Fed can call inflation without a big increase in unemployment. And so that is really what is supporting the dollar at the moment right because a lot of the market were pricing in a recession and a recession isn't supportive of a currency. But if you have inflation coming down to the 2% target while you have GDP actually supportive of the rate hikes that have been going on. Then that typically is positive overall right. And so we're going to get to the comparison for example with the euro at the moment. And so the dollar I've taken a long position on a dollar pair matter of fact in this understanding this and what's happened. And so the dollar I was actually a bit bearish on this but the data seems to be very, very resilient. So I've taken a long trade on the dollar Swiss with the data and so let's see what happens with that. But yeah so inflation as well looking at inflation, inflation called while consumer spending picked up in June. So the Fed actually getting the best of both worlds and so a recession being avoided is going to be positive for the dollar. And so looking at something like the dollar yen. The dollar yen is you would think on the surface that the dollar would be the buying the short term. But recently we had the Bank of Japan adjust yield curve control so Bank of Japan sends yield soaring with surprise change to rate limit. And so it was a bit of a surprise keeps negative rates says 10 year yield band a reference point and bank says more flexible approach will help sustain ability now. We've been waiting for this for ages right in the market been waiting for this for ages and there are some nuances to the yield curve control. And it says here while the Bank of Japan left his short term policy interest rate unchanged at 0.1%. The way they said that the moves didn't represent a step towards the end of its yield curve control program. Some investors were unconvinced and so it's my opinion that the that the waiter is really just trying to talk down the yield curve control. But it's the first step really to understand that they are on the path to policy normalization meaning that they may start to adjust the their interest rates from negative to actually now neutral. You might go to you know 0% one but it all does depend upon the inflation right so inflation starts to get out of hand. Then in fact the Bank of Japan will be forced to start to look to hike rates and employ monetary policy that will look to appreciate their currency. Now from a from a dollar yen perspective you have some short term dollar buying as well as I think personally some yen buying but the two areas I think you know I'm looking at getting involved in the yen would be really at these turning points here. So the one four twos the high of that or anywhere pretty much I think around now as in regards to a short or in fact my preferable area to for a trade would be one four four. So I might enter a small position down here that doesn't work out. Then I'll be looking at some short trade in and around this area here and even higher if it does get there because I do think that the yen now is starting to be a buy. But in the short term I think a lot of traders may get stop hunted liquidity hunted stops get taken out as prices rise but I do think that the upside or the downside to the yen is actually capped. And so I guess in the short term you can look for any kind of trade any pullbacks but I think overall my medium to long term perspective would be to look for short trades on that pair. Dollar Swiss the dollar Swiss is a bit of a Swiss has been a bit of a strange one but I think overall I think there's a limit to the downside now with the dollar doing much better than expected. I do think that any pullbacks into you know these lows are decent buying opportunities. The yen I'm sorry the Swiss Frank do have their inflation I think is at 1.7% is there I think their headline inflation. And so even though they are continuing to be hawkish the yen has strengthened the Swiss Frank has strengthened since then which would actually the expectation is for actually the inflation to still come down even lower. And if it does come down lower before the they announced that they are hiking then in fact they may change their bias before the announcement. And so I think there isn't a really good opportunity to look for some long trades if you're not long already any pullbacks into machine practice is a demand zone here as well. Any pullbacks into that demand zone I think decent buying opportunities as long as again the data supports a narrative right. So there's that dollar CAD and the Canadian dollar and the Bank of Canada are not really it's a bit of a tricky one because there is data basically suggesting that the Canadian dollar may not high crates one more time and if they do hold rates while the Federal Reserve are looking to may look to high crates as well according to their dot plot they got one more in them. So I think there could be more upside potential on the dollar CAD. Now again if the data comes out this week FOMC for example doesn't support you know the US economy then in fact you could see prices start to you know move a bit lower but I think with the economy doing well and again jobs this week hopefully it does support the dollar of course because I'm in a long dollar at the moment then I think there could be a decent buy trade and continuing buys as long as the data supports the dollar buying. So but not really a pair that I'm really kind of interested in. Look at New Zealand dollar and New Zealand dollar is going to be interesting this week based on the fact that they have probably the highest inflation out of the pairs that we trade. And although the RBNZ has come out and said that they're looking to hold rates in fact it could be an opportunity for the bank to maybe resume hiking rates based off of the fact that you have jobs in employment. And so some of the bank reports that we've been reading privately have suggested that there could actually be a resumption to hiking for the RBNZ and that depends on the data this week in terms of in terms of employment. So if the employment comes out sticky or higher than expected then in fact that puts pressure on the RBNZ to look to high crates and then you could actually see a little bit of a rally. But I think overall medium term I think the dollar could still be a buy. So any pullbacks into this area here or even up to these highs I think could be decent buying opportunities for the dollar. But my conviction would be a lot more solid if data this week comes out and it's not great for the RBNZ then literally this pair is I think is an out and out sell. Looking at the pound in the pound when you compare the monetary policy interest rate hiking cycle it looks like the Bank of England are the bank that are looking to hike the most at the moment. And so it says here with a whipsaw UK traders get no rest with Bank of England rates anyone's guess right so UK rates volatility on the rise on the rise while easing the US and in Europe. So Bank of England Governor Bailey has delivered market surprises in the past and so there's a little bit of a of uncertainty around the whether they are going to be hiking by 25 basis points or 50 basis points. So volatility in the EU is rising in the UK bond market ahead of a knife edge interest rate decision from the Bank of England while money markets pricing and economy surveys tilt towards a quarter point hike on Thursday. Investors are bracing for a surprise with Goldman Sachs Group HSBC Barclays and UBS Group envisioning 50 basis points of tightening. So the contrast with the World Telegraphs quarter point hikes delivered last week by the Federal Reserve and European Central Bank couldn't be starker. So again there's differences there right more than a year and a half into the Bank of England's hiking campaign. The market is still in the dark over how much tightening it stands to deliver to combat inflation and it speaks to the challenges officials face in balancing the need for tighter policy against moves that could hobble growth. So definitely uncertainty around how much hikes are going to the Bank of England may do. But at the same time it's different from the Federal Reserve where the Federal Reserve are pretty much like okay are we going to hike or are we not. Whereas the Bank of England are looking at it from the perspective of how much hikes are we going to do. So from that perspective I do think that the pound is more of a buy than the dollar and so you do have a little bit of some demand there. Although it's not necessarily the strongest area of demand you're probably looking at. You can maybe some sort of pullback if you didn't get involved in here if that demand zone breaks down I think that's a decent area to look for any kind of buy trades. Although I'm bullish overall on the dollar I wouldn't necessarily buy the dollar against the pound at the moment but we do have as well an area here where we have some supply. So depending on what happens this week you could get a bit of a sell off if they hiked by 25 basis points. I think the market could potentially sell off but I do think that the fact that the Bank of England are expected to hike a lot more than the Fed. These demand zones should be supportive areas for the pound. Was there another article I had? No I didn't have any other articles so that's where we are with the pound dollar. The euro dollar on the other hand there was some disappointing news and it's been some disappointing news for Europe. Mainly you're looking at interest rate uncertainty now so ECB rate uncertainty looms over weakening eurozone economy. So Germany exits a recession but fails to grow for third quarter and ECB officials warn more hiking may follow any September pause. So now they're thinking about a September pause and so there are banks pondering options of another ECB hike. If I zoom in a little bit what it says here is that you've got Goldman, Morgan Stanley and Citi that think that in fact there's likely to be one more hike. Another quarter point hike at some point maybe in September whereas there are some other banks. Small Deer, BNP, Paribas and AMB Amaro actually think that there's ECB should now hold rates. So it says here what those banks are and basically if they're looking to they think that the ECB will hold or hike. So now there's uncertainty around the hikes and this is really due to the economy and the eurozone economy. And so after I'm tearing myself there what else was there sorry it was no it was here so understanding that what you do have is a situation where if the market isn't necessarily all out convinced and consensus wise isn't convinced that there's going to be hikes then you get a move to the downside. And so I do think with the Fed being in a better position economically than Europe that may be looking like a really nice buying opportunity for the dollar and a nice shorting opportunity on the euro dollar and but if prices do come down to this 10850s that could be actually a decent buy. I think there might be a limit to the uncertainty and even if it comes down to maybe somewhere like the 10750s but again the dates all have to support that narrative. I think for now the the fact that they are a bit more dovish the Europe are a bit more dovish. I think there's a decent short trading here prices do come up to the 110s so 111s 115s but also as well where you have the euro which had a strong demand at the 10850s. So either way you look at it I think there's definitely some nice trading opportunities in and around this area but I think at the moment in the short term it looks like the momentum is with the Federal Reserve Euro yen. I'm actually a bit bearish on this currency pair I'm buying looking to buy the yen and let's see one second just adjust this. So prices I'm going to delete this as well prices coming up to be these highs I think are going to be nice shorting opportunities especially since the European central bank is you know potentially thinking about hold right so how how how much higher can this go and as well as the Bank of Japan potentially on the hiking cycle and that needs to be priced in so I think any moves up into these into this supply zone is a decent buy. At the moment there is some demand around here I don't really like to draw demand like this but you can definitely make an argument that there is demand around there. So any pullbacks I think into that zone if you want to be long on the Euro is decent and especially because you do have the confluence of some support and resistance within that area as well. So if price does come down to that area there I think that could be a nice technical area to look for a potential buyers you do have some demand there. Euro pounds my bias would actually probably be more to a short side as you can see there's definitely more hikes coming for the Bank of England so from this perspective looking for any kind of short trade on a pullback I think is probably the better move rather than buying the Euro I'd probably rather buy the the the pound nice supplies on there and again with some support decent support and resistance within that area so lots of trading activity expected in this area if not just above it I think that's going to be quite nice for a potential buy for the pound. Yeah I think not much to say about that if you do want to be a buyer obviously you're looking at a bit of a bit more of a pullback into this zone and then looking for a buy trade although this level has been touched once already so doesn't necessarily mean it's the strongest area of demand. Aussie dollar so Aussie dollar the Australian dollar is expected they say to high crates but there are some issues with that potentially they could hold rates and if they do hold rates then I think we're definitely going down to this lower end of the demand zone but we'll see I think at the moment the dollar the US dollar that is I think are in a decent place so I think any pullback to the limit of the move really is going to be up at these highs and I think anything that suggests that in fact I think anything that suggests that the RBA are done with hiking and the dollar and the Federal Reserve are not then I think that's going to be a nice short trade especially at that 68 round number I think that's going to be a nice area to look for any kind of shorts within that supply zone but again if we do get this week a hike then you should get some at least some short term appreciation for the Australian dollar and also depends upon whether they are going to continue to be hawkies so it's really about the statement afterwards and gold and so gold finally we've got a bit of news out about gold JP Morgan sees gold charging to records in 2024 as Fed cuts rates and so Bank sees mild the US recession and rate cuts in second quarter of 2024 has price target at 2175 for the final three months of next year so basically JP Morgan sees opportunity in gold ahead of a likely US recession but it's impresses will push past 2000 an ounce and so yeah it says here falling real yields in the US will be a significant driver for the precious metals when the Federal Reserve started the rate cuts which should play out in the second quarter of next year Greg Shear executive director of global commodities research said in an online briefing on Wednesday and so in preparation you know when central banks look to buy gold it can take them a while so it could be stockpiling for now it could be of course a pullback we bounced off of this this demand zone here but I think if the dollar starts to strengthen it could get another pullback into these 1800 areas and even down into maybe the 1820s wouldn't that be something but ultimately if banks are buying gold with the expectation that prices should be somewhere up at these 2100 prices within maybe the next you know maybe six to eight to nine months then you know they're not necessarily trading gold they're looking to potentially look to buy for cheaper right but in the short term I do think that if the dollar is a buy then gold is likely to be a sell and so let's see what happens here especially if they start to avoid the recession from like the US economy if they avoid the recession risk is kind of on the table which means that you know it positively supports the dollar which again means that gold is likely to potentially go down to these areas here so if you're buying gold right now you really have to have a bearish bias on the dollar and I don't really have that at the moment so I do think that price may start to look for look to fall all again you can see prices start to move higher either way I think your your your bias on gold should be based off of what happens and what's happening in the US economy and as long as you've got the data to support a narrative then you know that makes all the sense in the world so non-farms this week although I am long on the dollar if non-farms comes out and it is very disappointing I could obviously change my mind on the dollar and switch my bias but ultimately as long as the data supports a stronger dollar and the US economy is avoiding a recession at the moment and they are looking to potentially high crates then my bias is to go actually long on the dollar so that's it for this week I hope you have a great trading week and take care all the best