 Hi, my name is Leon Roe currency trader and trading coach at trading 180 comma welcome to this week supply and demand Forex and gold fundamental and technical Analysis if you're newer warm welcome to you and if you're returning an equally warm welcome to you and please like subscribe and share With your fellow colleagues this video and many of my other videos on my YouTube channel If you find the content that I provide useful every week It doesn't cost you anything to like and it really does help and support the channel and and get this information quality information to traders that really need it and unlike many the majority of other I guess YouTube Analysts we at trading 180 use the fundamental and technical analysis approach not just technical analysis So we use fundamental analysis to really establish value It amazes me how people tend to trade without Understanding a fundamental analysis if you call yourself a forex trader But don't know what the fundamentals and the really the drivers behind price are then you're really just a technical trader That trades forex really and you comply those same Technical strategies to pretty much any market, but you really need to know fundamental analysis on what moves that asset class that you are That you are trading and what gives it its value So then we can establish whether something is an asset class is undervalued a fair value or even expensive and staying out of a of a trade anyways Getting into the week ahead before we get into the fundamentals and technicals and in the week ahead we have We have flash PMI surveys for the US UK Eurozone Japan and Australia And it will give an insight about the state of the global economic recovery While central banks in China, Philippines, Switzerland, which is one that we that we trade the Swiss franc Will be deciding on monetary policy. So Probably not any any surprises there to be fair when it comes to central bank policy when it comes to PMI's I guess it just adds to the the growth Sentiment if there are any PMI surveys that are probably below You know forecast, I don't think it would matter too much unless it's way below forecast But generally, you know, we should see some positivity And positive numbers other important releases to follow include the US final fourth quarter GDP Which although I you know watch and I have a I guess a big I Think GDP is a quite an important thing to watch and one of the main macroeconomic markers that I do watch The final fourth quarter is really already been priced in so You really want to when you're if you're trading GDP news announcements It's really the advanced the first one to come out This is like the last one to come out because there's an advance there's the second estimate and then there's the final and The the fourth quarter final pretty much has been priced in already so unless there is a major surprise, which I highly doubt That won't be really a big news event on market mover So durable goods orders and personal income and outlays UK unemployment. I think that would be Definitely one to watch retail trade and inflation data Inflation data is definitely something is a theme and we'll get into that when we look at some of the currency pairs And Eurozone and South Korea consumer Morales, so let's get into the the fundamentals and the technicals are starting off as we always do on the Dow Sorry, US dollar index. So the DXY and just a measure The DXY is the measure of dollar strength against the basket of currencies like the euro the yen the pound and a few others and What we've seen last week really is Last week or two is really for the dollar price kind of move, you know a bit sideways But I anticipate prices to go, you know higher in the in the short term for for for these reasons and if we look at The financial times taper tantrum and inflation replace COVID as top investor worry So fund managers have grown increasingly worried a sharp rise in rates could knock markets And I've been really, you know saying this for for a while now, you know, my my bias was Long dollar and we'll just have a quick read of some of these paragraphs a corona virus has been overtaken for the first time since the early days of the pandemic more than a year ago as the top risk That keeps investors up at night according to a new poll of fund managers So money managers pulled by Bank of America now see inflation as an unruly rise in borrowing costs like that scene during the 2013 taper tantrum as the key tail risk that could unsettle global markets So served the survey investors with 597 billion in assets and the management highlights the investors concerns That the economic recovery from COVID backed by unprecedented similars may unleash a surge of price growth That could be difficult to tame. So we've ordered that Inflation really has come into the the the limelight It was all about the economic recovery and GDP and it still is about the economic recovery But now with all the stimulus and the unprecedented stimulus that's been Going on over the past year or two actually a bit longer than that But there's definitely been a lot of unprecedented similar since the COVID Hit us last year March February March Inflation, you know is is is a is a definite concern and just quickly So rising inflation expectation and bets that central banks particularly the US Federal Reserve May have to tighten policies sooner then have Then planned have triggered a widespread set off in government bond markets, which investors worry could get worse There's two things going on here. So a rise a tightening policy Which is basically a hike in interest rates and that is generally positive as long as you have GDP alongside You know the the the the rate hike and also as well the Fed won't Hike rates unless they get an average inflation of Above 2% so they don't want to hike too soon because that could choke off the the economy So this is still data dependent We still have to wait for the data to come out the data has to support the narrative if the data doesn't support the narrative then basically It's just this this just trade idea as far as buying the dollar Well, we'll kind of fizzle out, but You know investors are looking at potentially within the next I think two years a rate hike and also It's been triggered by a set off in government bonds, which is basically yields of rising as bond prices as they work inversely bond prices work inversely to bond yields and Yields have been going up on like the 10 year and 30 year etc So we no longer have an inverted yield curve in the for bonds but With that being said that really is the the the focus so with the dollar for me as long as Dollar data still comes out. So inflation interest rates or I say interest rates But inflation and GDP come out as positive Then my bias is to the long side and what I'm looking for on a dollar index is just Really some confluence. So if you see prices go to the downside a little bit, but let me get a nice some confluence of buying then we go over to the Dollar crosses and look for buying of the dollar on that currency pair And if you do want to be a seller right into you know Some news because again, none of us know whether the news is going to come out positive or negative If it comes out negative then it could be a really nice Area to short if prices do come up to this supply zone from back in November 2020 But the path of least resistance at the moment is to the upside. You also want to watch bond yields as they as they keep going higher And that would also support Dollar buyers and I've really been a buyer of the dollar from back in January matter of fact been looking to buy the dollar and I Advised the guys in my discord room that we should be buying the dollar from January I think 27th 28th And you can see pretty much what's been happening. Anyways So those were really the two areas at the moment nothing in between prices really kind of going sideways Looking at the dollar yen dollar yen. Look at this just making higher highs. So we've actually made technically a new high right here and So that's a little bit of a demand zone there. So if price does come down Into that zone there will be a buying opportunity now That is that the best buying opportunity considering that we've had, you know some demand here and maybe some demand here for me I think this is a bit too hard really want over a deeper pullback to come down into this 106 106 76 area or I want prices to really kind of prove that there's demand here Then a pullback into that 108 48 level before looking at getting long If risk off does come into the market because the Japanese yen is a safe haven asset And if risk off does come in for example, there could be fears about again, you know Coronavirus a new strain etc Or even some basically some some bad US dollar news then this could be actually a really decent sell to the downside So let's see what happens there a decent area We're actually quite a nice supply zone from a technical analysis perspective But you have to understand that it's the fundamentals and value, right that drive prices Just because you see a level of supply doesn't mean you should get short if you're doing that you really just You just basically just trading, you know chances or you're not you're not trading The best probabilities. It's best to have the fundamental edge as well within your trading And then you know, you can really be selective with the trades that you do take and take really higher quality trades with The the banks behind you with the financial institutions behind you because they don't trade only Fundamentals they I mean sorry technicals. They look at the fundamentals and risk sentiment. So Again partly resistance probably to the upside for the foreseeable future Looking at the dollar Swiss and the dollar Swiss. I'm really trying to get long on this Many of the guys in the room know that I'm also Want to get long around this 92 area? This is actually a bit of a what we would term a well I term is CPR zone and capture pain relief zone at this 92 area, but from a daily demand zone We're looking at 91 0.9 1 4 or 5 area before prices You know look for any kind of long trades, but I'll be looking at here first as a as an area to look for any kind of long trades We can delete this area of supply and I will start drawing some supply here because there is Supply not she's decent area of supply. I guess but again the profit is resistance you'd have to really say why is the Swiss Frank a bargain up here and Can't see the Swiss Frank being a bargain if we do get a pullback for me That's where I'm looking for a buying opportunity. Of course. This isn't financial advice I'm doing is telling you what I am doing and with my own trading. So For me long dollar, but if you do want to get Long on the Swiss Frank or short on his currency pair again due to some sort of risk off sentiments and fear uncertainty And doubt that comes into the market then this actually would be a very nice short trading opportunity Dollar CAD so dollar CAD I was saying last week the CAD in fact is quite strong as a commodity currency and Even though we came back down into this zone I would not be taking that long and we can pretty much see how that works out again If you don't understand the fundamentals and you're just take taking technical patterns because you think that's a that's an area to buy You're literally going to be on the wrong side more often than not so This gets deleted you really want price to prove that there's some sort of demand around here So I'd want to see some higher highs higher lows being made and then I'll look for price to come back down here And also not even just price to come back down You I'd have to really see a change in sentiment the Canadian dollar for me to even think about getting Long but if you have to you know strong currencies For example the commodity currency with the CAD and the dollar which has some good sentiment as well as good economic data Then that's the kind of trade where you just want to stay out of what you want to trade is really look for Divergencies where you have a strong versus a weak currency And appreciating currency versus a depreciating currency This is what's known as divergence and that is actually what causes trends Yeah, trends go higher or trends go lower depending on if you're buying the base of the quote currency and You want to choose the best trades the easier trade out there is to always you know bet on Strongest versus the weakest right if you're you know placing a bet on any kind of sports team You would want to place the the bet where you're getting obviously good good odds, but The easier bet is You know the the best team versus the worst team or the best fighter versus the worst fighter or the best player versus the worst player Right, even though you get worst odds You know you get terrible wads for those because the bookies actually know but in in in forex trading We can get really good odds and risk rewards as well as pick the best Pairs and that's what it's really about. Anyways, I'm looking for any kind of sell trades I would probably look for That area this supplies I'm starting at one two six One two one point two six five seven area for any kind of short trades if you want to get short But personally this isn't really a pair. I'm really interested in Moving on to the New Zealand dollar and this is a pair that I am now interested in got in a trade Up at the top around here We was going over this in the group call that we had on Yesterday matter of fact Saturday and recording this on Sunday With the guys in the room and it is really because on the I think it was the worth of Thursday New Zealand, right when we're is at risk of a double-dip recession as COVID-19 recovery stalls so the news came out on the Wednesday night or London time anyway and By the time we got the data and what I'm a woke up in the morning I'd seen this and then literally entered into a nice trade right at the highs and Got short on this supply zone price entered into the supply zone and then a really really nice short trade So made a two-to-one on one position and now just a trying to swing trade the second position and Yes, so Hopefully, I think prices should want to you know, roll over a little bit more. We've definitely got some short-term negative bias on the New Zealand dollar even though it is a commodity currency, but I think with a double-dip recession in in the In the consciousness of people in the negative data I think we should probably see a sell-off and I think actually we might want to see a deeper sell-off and Down into the 70 cent there was a bank I saw an article a bank that was predicted Maybe 70 cent might be actually a decent area to look for some buys, but it really depends But I think with the strong sentiment around the US dollar and now negative sentiment around the the New Zealand dollar I think the 70 cent mark is a really good opportunity or a profit target For for me anyway and anyone else if you are in that trade Again any kind of long trades You probably I would say would want to wait for maybe a fresher area of demand that this level has been touched once Twice three times already. So I'd probably say this 71 areas if it does come down here It's probably going to break and then maybe if you do want to get long on the New Zealand dollar based off of maybe some Changing sentiment or fundamental data then look for any kind of long trades there looking at the Pound dollar and a pound dollar Again, the pound has been actually quite Strong in a sense that we've had The Bank of England upgrades outlook for UK economies to central bank keeps interest rates at 0.1 and sees no medium-term inflation risk so there's some positive news not necessarily the most positive news in the world but Risks of a recession are fading and So the pound for me is not necessarily a great buy But it's it's looking like a decent buy, but I wouldn't buy it really personally against the I'm not buying it I should say against the the US dollar. There are better pairs out there to trade the British pound against So for example the pound yen pound Swiss which has been an absolute tear Recently I've been waiting for a pullback for ages on that currency pair It just hasn't pulled back on those currency pairs. I should say but we're on the pound dollar. So Right now not really interested in it fundamentally, but if you are and you want to take these trades I would probably say the best area to look for Any kind of buy trades is maybe the lower side of that demand zone or even even better. You have that Demand zone down into the one point three six six. That's a decent area pullback You've got some decent support and resistance as confluence as well within that zone. So a decent pullback within there If you are looking to get short on this currency pair then I would say the Supply zone right at the top around that one for one area is something that I would definitely be interested in If it came to a short because I do think that prices should want to To start to range from now and then ranging over the past a few weeks anyway But I think the bigger range is definitely at the highest question is is why would the pound go higher than the one for two Or the these highs here This is obviously seen as over an expensive area for the For the pound or a bargain for the US dollar So I think this is probably now looking like a bargain for the US dollar So if prices do drift up here at some point in the future I think that actually might be a decent sell if I'm looking to if I was looking to trade this pair Moving on to the euro dollar and the euro dollar Really interesting over, you know the week and The I think a lot of traders got caught going long on this currency pair not necessarily a Supply zone from a supply zone perspective, but I was in a live call with some traders on the on the Wednesday Evening we have our calls on the Wednesday and This had happened and one of the comment Traders in the group commented basically don't FOMO in on that and a lot of traders would have definitely FOMO'd into that because that does really kind of draw traders attention Nice, you know long candle and traders will tend to feel that they're missing out on that and We ended up actually in real time as this was going on. We were reading this article here So Powell holds dovish line as a Fed signal zero rates through 2023 And as we were as I was reading this and we were going through this to the group We were basically we derived from this article that that it really wasn't as dovish as The the price action had suggested so I'll give an example right so an example of that was 7 of 18 officials predicted higher rates by the end of 2023 compared with five of 17 at December's gatherings. So in fact, there's more Officials that are predicting higher rates, which is basically, you know, a stronger dollar Right gives value to the dollar than there were in December three months ago So that actually is quite positive for the dollar also as well There was the the upgrade so the Federal Reserve chair Powell and his colleagues continue to project near zero rates at least through 2023 despite Upgrading their US economic outlook and mounting inflation worries in financial markets again They're upgrading their economic outlook that is positive. So I'm not gonna go through this this whole article But we were reading this literally at the time of the FOMC on Bloomberg and I said that at the time there's gonna be traders that are gonna be caught Going long. I was still had a short bias. I mean, I'm still in a trade Short didn't get out of that trade. I was we were waiting for basically a stop-hunt above this level right here That would have been really nice if we could see we saw some sort of stop-hunt. Unfortunately The trade didn't happen didn't appear, you know, but we got the direction, right? Which is always really the key. Yeah, is if we can get the get the direction, right? Then secondary is okay. How do we capitalize on that? We can't always capitalize on every single move but you know what we can do is if we stay in line with the fundamentals, eventually we will be able to get some entries and Get the the direction right and anyone who went long in this in this in this candle here in real time is now You know stopped out or they're in a bit of trouble because they're moving and removing their stop losses so, yeah, I do think that prices will continue to Go lower as I've been saying for a while But also as well just to back that up mind the gap of mind the economic gap Europe and the US are drifting further apart So speedy of sorry speed of vaccination and size of rescue packages Help explain the widening path to recovery and everything others I've been saying about divergence, right? Fundamental analysis is about finding value Yeah, I'm finding value from one currency and another currency looking at the economic data looking at monetary policy Yeah, and and seeing the divergences and what we can see is that the US is pulling away with extra stimulus right, so we've got the the US from a GDP perspective and we've got Europe in Japan lagging behind and And we've got fiscal support varies between countries Yeah, and the US closes their output gap swiftly and then Europe struggles to rebound fully and again I've been saying this if you've been following me for any length of time check out last week in a week before and week before that if you You know want to check out those videos, but I've been saying this for a while and we switched our direction back in January where we were looking for short trades and Looks like the trade idea is playing out. It's just You know It was unfortunate that we didn't get a bit of a stop on above these areas here before looking at getting or a dip me for me Anyway, an additional short trade to the downside as I'm already in a trade from From up here and actually up here as well. So just swing trading this two positions and and was waiting to enter into a third Anyways, if we do get any kind of pullbacks on the daily Yeah, any pullbacks Then it would be for long trades or say short trades is my bias So anything around here would be nice don't know whether we'll get that though But we could get prices prove that there is a bit, you know This area here is a bargain and if it does then you're looking for pullbacks into a demand zone Which would probably be somewhere around this area here and then look for any kind of short trades So proof of value first and pullbacks into the zone Moving on to the euro yen and the euro yen again Even though as weak as the euro has been doesn't mean that there aren't weaker currencies out there And you can see the Japanese yen in a risk on environment is probably one of the worst currencies to buy and Pretty much even though the euro again is weak The yen is the weaker out of the two So again, if you do want to be trading this pair, which I'm not really too interested in to be fair But um, if you are then that's a decent zone to get long on especially If you see I think it's down at the lows of that area there. Nice a bit of horizontal support And resistance in that 128 30 to 128 maybe 40s 50s If you are looking for short trades, I'd get a really wait for proof of value before You know getting short so basically waiting for price to kind of sell off prove that there's some sort of supply at these highs And then look for a pullback into that zone before looking to get short Also as well look for probably sentiment to you know, change a little bit as well Maybe some sort of risk off sentiment or even just some bad news around, you know, euros recovery Vaccine rollout, etc. Or in any kind of economic macroeconomic data points that come out are disappointing Moving on to the Australian dollar US dollar and again to strong currencies or appreciating currencies Australian dollar is doing really well They had some really good unemployment numbers and And again, the US dollar is is on the up and up as well So you should really expect what a ranging market, right? You should expect prices to kind of go sideways to a certain extent I think my bias though would be to the upside in them in the probably the medium to long term Although this isn't really a favorite of mine again when you're trading looking at two strong currencies or two weak currencies Those aren't, you know, the best trades. There are much more easier pairs to look to trades So if I'm looking for any kind of long trades, it would definitely be down by probably the 75 50 75 area If I was looking for any kind of short trades It would have to be at the really the highs before looking at getting Short on this currency pairs, but overall, I'm not really too keen on looking at that I don't think there's really much opportunities from a fundamental perspective Ozzy yen and Ozzy yen again, as I've been saying and I keep repeating The Japanese yen is not really the one to buy in a risk-on Environment and you're seeing that happen. Look at that. We just seen, you know, this massive uptrend so Yeah, it's been again a bit difficult looking for trying to get in on an entry On the Ozzy Ozzy yen Over the past month or two, there's been a bit of frustration, but again prices will always come back and Hopefully we can capitalize on this. I think I'm gonna move this Up to here again, this isn't the strongest area of supply But well, I really want to see prices kind of come down into its demand zone Before looking at getting short if I was to get any if I was to get short or again getting short around here Would pretty much just mean that there's some sort of risk-off sentiment Yeah, so looking for risk off before looking at getting short as long as you know, the global economic recovery Still stands and still that's the narrative then for me It's the path of these resistance is to the upside has to be so any kind of pullbacks into those demand zones are gonna be the trade and finally we're looking at gold and gold We've had a bit of pullback on gold for me just my bias overall gold is a buyer, but From a fundamental perspective With there's a lot going against gold. There's there's bonds going against Against gold because yields are going higher, right? It's the yield curve yield percentage. I guess it's going higher So bonds government bonds are also a risk Off asset, but if you're getting yield on bonds or safe haven asset I should say if you're getting yields on bonds Rather than gold money's gonna flow out of gold and really kind of the logical play is kind of into bonds because you're getting a yield For holding government debt rather than no yield for holding gold The thing that is going for gold. I think is inflation worries, right? So gold is a hedge against inflation, but I think until until we do see Inflation start to get out of hand. Yeah, then I'm personally I'm not really a buyer of gold at the moment, especially with the with the dollar, you know potentially strengthening going, you know from Strength to strength, especially, you know, the economic recovery I can't I can't really see myself buying gold in the near term, but again if that that would change if Inflation really starts to become a problem and Again, there's always an opportunity to buy gold So I don't really look look at this as far as missing out on the absolute lows But if you do want to get long on this currency or this gold Then I would probably delete that just draw a few Demand zones probably one there Yeah, I'll put it say that one there as well. So Any kind of pullbacks I think is decent for a long trade, but I really want to see Some some sort of sentiment change against the US dollar so again So if there's if there's some really disappointing news on the dollar So anything regarding, you know, any kind of economic recovery or even Inflation not necessarily getting out of hand. It's kind of intuitive I know I said definitely buy gold say definitely buy But you know, you might want to get into gold if inflation is you know getting out of hand But I think also gold does react to negative Dollar news a US dollar news. So there could be a decent buy bias if there is a lot of disappointing news around I would say especially probably more to do with the economic recovery. So At the moment sentiment isn't with gold, but I Would probably say if you do want to get short then that would be the area to get short that that daily supply zone If you're looking for long trades, I would definitely say the lower end of this is sewn right here this 1676 1699 Area so that brings us to the the close of this week's fundamental and technical analysis Don't forget to like subscribe and share it costs you nothing and hopefully common will also come at your weight and Guys take care. I hope you have a great trading week and speak to you all soon