 Hi, my name's Leon Roe currency trader and trading coach at trading 180.com and welcome to this week's supply and demand Forex and gold fundamental and technical analysis for the week ahead starting the 10th of March And if you enjoy and find the videos I provide every weekend useful, please don't forget to like subscribe and share the videos Across YouTube and other socials. This is a free way to support the channel and Getting into the week ahead and this is from the Trading economics comm website and it says in the United States financial markets will have their eyes on the US inflation rate alongside retail sales producer inflation the Michigan consumer sentiment index and Industrial production in the UK attention will turn to the unemployment rate industrial production GDP growth figures For January and foreign trade statistics Finally industrial production figures for the euro area along with the NAB business confidence index from Australia We'll provide further indicators of global economic conditions. So Quite a few things going on this week. Definitely a big week for the US and the UK. So let's see what happens There so before we get into Some fundamentals and more technicals just a bit of a trade update and some trade analysis on the New Zealand dollar US dollar now this trade I took Around the the first of March Friday the first of March and it was really after the ISM Manufacturing PMI's and there was a bit of disappointing news the forecast had come out as forty nine point five And the actual would come out as forty seven point eight now I ended up taking a trade on the Friday and it was on this this candlestick here on a six-hour chart and If you don't really know or you have you know, you're a first-time watcher. I I typically enter or tried to enter into three positions One is a market order and then the other two positions are a fifty percent By retracement pending order as well as a about a ninety five percent by pending order if prices You know do come back so I can get in Better price and get better risk reward and some trades and if I'm right about the trade then You know, we should want to go obviously higher. So fundamentally the New Zealand dollar the RBA are seen as cutting rates later than the US so the US is seen as cutting rates sooner and interest rates are a main driver of of currency You know valuation and so the really the objective is to Look for divergences in interest rates or you're looking for Leading and lagging indicators. So in terms of interest rates So again, who's holding for longer who's looking to you know, cut or hike rates later or sooner? and so in this case the RBA are looking to cut rates sooner as I said before I'm sorry to cut rates later and so and so that should actually Appreciate the currency over over a central bank that is looking to cut rates sooner And so the idea was that there was a bit of weakness coming into the dollar Again, you can check by the way last week's video analysis on The dollar and I did change my bias and did say that there was I was expecting some weakness on the dollar And so basically the trade was that I entered into An entry at the 0.6192 area as prices started pulling back the 50% area I entered again into a pending order entry by entry at 0.6093 and then another one at 0.6076 area around there and and again Fortunately enough for me. The fundamentals did play out when they were supposed to and prices ended up going higher so I ended up making a one-to-one on the Lower pending order trade, right? So taking One-to-one about 15 pips off there and then on the second position ended up taking a one-to-one of that one That was around about 29 30 pips and then I was swing trading This final market position as prices continue going higher And I took off the majority of profits about 75% of profits as it reached 80% of What is known as the auction or the range? So you've got from this High to where this low came in 80% is somewhere around here So that's where I end up taking about 75% of my profit and I've got about 25% Left of that position to try and swing trade it up to these highs and that's providing the dollar does continue to To to be weak and again, we've got some data coming out this week Which we'll get into a bit later inflation is going to be the main one So if inflation comes out lower than expected or lower than forecasted as well as I think there's Some other data, but yeah if inflation comes out lower than expected Towards the two percent central banks two percent target Then you should expect really this to continue going higher and the dollar to devalue So let's see what happens there but that was The the trade analysis And that I took and also as well in terms of an update on the Euro Australian dollar and the Cad yen which again if you go to last week's video and you know look at the first part of the Trade the video you will see the analysis breakdown, but if we go to The euro was he I ended up getting stopped out on a final position So I was profitable on two positions and then my final position my market order ended up being stopped out So that's that but still a profitable trade overall and the cad yen As well has been a really nice trade again profitable in two positions got an open position still remaining and Yeah, this is being Traded and at the moment I'm up 2.21 percent on that final position. So again just It goes to show that the fundamentals do play out and when they do You can stay in trades for longer and have a bit more conviction In your trades and as long as the data does support your fundamentals You can keep a hold of them keep holding and swing trade to your heart's content. Hopefully so Let's see how far this does go, but as well as the the New Zealand dollar and Yeah, let's see how that plays out. So getting into the week's analysis and again starting off on the the Dollar index and this is the equally weighted dollar index and again I will leave the calculation for this in the video kind of explaining why I use an Equally weighted index rather than something like the DX Y or the USDX in terms of Looking at overall dollar strength or weakness. So Again, just looking at the way where we are in terms of the dollar I do think this week is going to be very very pivotal in terms of you know, if the if inflation data comes out and it's sticky or at least Comes in higher than expected and you're likely to see the dollar look to Look to appreciate And if not, if it you know in terms of the inflation starts to come down Then it will really signal that the Fed are likely to continue to hike in sorry to cut in June and so again this week in terms of Friday's data that came out so US jobless rate hits two year high even as higher is hiring stays strong So payrolls rose 2.75 thousand 275 thousand in February after downward revisions and traders boost bets for Fed interest rate cuts in June and a lot of traders Who would have been trading on Friday would have been wondering why the dollar was selling off, right? because the headline numbers are Quite positive even though they were off downward revised downward afterwards But it was still, you know, pretty positive and the really the reason why is because the The unemployment rate and wage growth Were confirming that inflation is coming down So I'll read this and it says here that the jobless rate climbed to a two-year high in February Even as hiring remained healthy pointing to a cooler yet resilient labor markets and non-farm payrolls advanced 275 thousand last month following a combined 167,000 dam revision to the To the prior two months a Bureau of Labor Statistics report showed Friday the unemployment rate rose to 3.9% and wages wage gains slowed and that really is important and the reason why that's important is because of something called correlation between inflation and wage Or unemployment and inflation Called the Phillips curve and you can find this on Investopedia if you type in, you know this headline how inflation and unemployment are related and It's known really as the Phillips curve And so the idea is that inflation and unemployment are typically have an inverse correlation So when you have unemployment Rising what should happen is you have inflation Falling yeah, and when you have unemployment falling you should have inflation Rising yeah, so it says here in times of high unemployment wages typically remain stagnant and wage inflation Right or rising wages is non-existent. So again unemployment high unemployment You have non-existent Inflation or low inflation and in times of low unemployment Employers typically need to pay higher wages to attract employers ultimately leading to rising wage inflation, right? And so wage inflation is a bit of a proxy for inflation in the economy and so again going back to the article you had the combination of Higher unemployment so you know unemployment rose to three point nine percent and wage gains wage gains slowed yeah, and so if wage gains are slowing that means that Inflation is coming down to the central banks to present target Therefore The Fed the Federal Reserve are likely to cut sooner right or at least cut in June So it says here that the report illustrates a labor market that is gradually down shifting with more moderate job and pay gains That suggests the economy will keep expanding without much risk of a reacceleration in inflation and that is important Such a combination gives room for the Federal Reserve policy makers to lower interest rates this year So although loads of traders were going probably long and being stopped out in fact what you know the the market was focused on was the It was inflation and the fact that the data was showing that the Federal Reserve are likely to continue to you know on their Cutting path and the federal CME Fed watch tool If we go to June We'll see that there's a 70 73% chance of an ease and the 26% chance of a no change and the more that the market Prices in an ease is the more that the dollar will deep value was likely to deep value And that's the reason why last week when I was taught when prices were up here to go back to last week's video You'll know just you'll hear me say that I'm looking for the dollar's gonna roll over this week and And be a short of course it could have went higher But I thought that the dollar was expensive in and around this area and therefore that's the reason why you know I did go long on the New Zealand dollar US dollar right For for that reason So the dollar going forward again this week Nobody knows what's gonna happen with CPI, but it could be an opportunity to buy the dollar if You are if the data does support a buy-in inflation CPI remains a bit sticky in terms of you know It doesn't come down or if it goes higher than expected then in fact that will probably likely support the dollar But anything other than that in terms of inflation coming down means that the dollar is likely to Sell off. So let's see what happens this week Moving on to the dollar yen and the yen has strengthened this week And it's really been based on bets You know ramping up that the Bank of Japan Bet swing towards a mid-march rate hike so higher pay The last people that are let me get my words out the last piece in puzzle needed for policy shift and some BOJ officials favor early rate move people familiar say and so Speculation surge that the Bank of Japan will move this month to raise Interest rates for the first time since 2007 after a flurry of reports and wage figures helped drive Up the yen bond yields and overnight swaps So bets on the 19th and 18th night of 19th of March meeting a gaining traction as reports emerged That some of the Bank of Japan officials favor an early move While some government officials also support a rate hike and Japan really are the only bank that this you know In the G10 that are looking to high crates So economists and investors are largely in agreement that the central bank will scrap the world's last remaining negative Rate either this month or in April and so the yen value as much as 1.2 percent Against the dollar on Thursday the strongest and over a month supported by a rise in government bond yields after wage data and Remarks from the Bank of Japan board member meanwhile Labor unions made us made the strongest pay demands in three decades volatile overnight swaps put a chance of a March Rate hike at nearly 80 percent So if you know this and you'll you know you understand the reasons why and you can position yourself Which again we have In our private members group then You know you should understand that this was likely to happen in terms of the yen strengthening so There is a chance of course for the dollar to kind of strengthen as well encounter that but in terms of looking for a Trade on this pair again it's a difficult one simply because I think the the dollar is in a in a pivot in terms of You know inflation, but I think once it solidified that or expected that the The dollar and the Fed will start to cut rates in June Then I do think any pullbacks are going to be shorting opportunities as I said before the yen I think is you know the trade of 2024 in terms of buying the yen so Yeah, we've got that going on So really any pullbacks up to here before looking at short trades or if prices make Lower highs in terms of you know a bit of a move to the upside then make lower lows And then a pullback up to that lower high would be what I'd be looking for in terms of short trades So overall the yen should be the buy Providing the data support to that and the dollar should be really a Sell against the the yen not an all-out sell though against other currencies the Dollar cad and dollar cad Came down into this demand zone bounced off of where this This area of support was within that demand zone. And so the Canadian dollar again Not really interested. I'm really interested in in trading the Canadian dollar or even trading this pair But if you are then I think that's a decent buy and again Just wait for the news to probably come out or maybe position yourself to go short Again last week. We did have obviously price set off and the dollar get weaker, but in terms of Timeline and when both central banks are looking to cut rates both central banks are looking to cut rates in June so it's a bit bit of a harder trade to to take in terms of direction wise but Yeah, if you're looking for long trades now is probably the time or you can wait for the data to Support the trade and trade off the CPI or you're looking for prices to move back up to this supply zone before looking for a sell trade looking at the pounds dollar and Again for the pound The British pounds in the Bank of England are looking to high crates later then the Then the federal reserve and so you would think that the pound would have the advantage and it says here that UK firms expect stubborn wage growth of over five percent despite CPI falls the Bank of England Survey shows firms expectations on wage growth still high and central bank cautious on tight jobs market before rate cuts and so UK businesses are expecting to face stubbornly high wage growth of over five percent over the next 12 months and Level seen as unsustainable by the Bank of England. So the Bank of England are Waiting for wage inflation to come down so that we'll get overall inflation down But at the moment it looks like it's stubborn and if it's if it remains stubborn then the Bank of England are gonna have to have a bit of a hawkish I guess tilt to their to their decision-making right and they're gonna have to hold for longer And so it does look like the pound should be The buy and so it says here rates setters have repeatedly Pointed to pressures in the labor market for their cautious approach to loosening policy With markets not expecting the first rate cuts arrive until the second half of the year So second half is definitely, you know after June, right? So August is is is what know the market is pricing in and so with the Federal Reserve cutting rates in June and the Bank of England is better to cut in in August This is what should happen right it should you know move to the upside of course No one knows the exact timing, but this is what is you know should be expected and so This week with the dollar weakening. In fact, you put it drag that all the way down In fact, what I do is I'll just move this all the way up make sense. I'll just Move that here For now and you've got a bit of a support resistance within that area as well So I think if prices do if they do make their way all the way down to that 126 then that should be a decent area to look for some long trades This is setting up for a decent stop hunt as well By the way for those who know about stop hunts And I think if the data does support that so let's say for example You know you've got unemployment rate that comes in and it comes in higher than expected Then I think the pound could be a decent sell and that was actually that like a stop hunt afterwards But you'd need that in combination with Sticky inflation or higher inflation For the dollar and for the Federal Reserve this week So you'd need at least those two things to come in in order for you to look for short trades As prices come back inside this level, but for now It has broken that supply zone. And so the nearest supply is gonna be Zoom out a little bit probably somewhere around here So yeah, just above actually, no in fact I can kind of pull this down to around here. Yeah, so you've got inflation and inflation you've got Supply sorry Yeah, that zone there where we're in right now So you can look for short trades, but I would probably the safer bet is to kind of confirm it with the news But if you do want to take a trade short, you definitely need both Unemployment to come in higher and inflation to come in higher for the dollar Pound yen the pound has been quite strong against the The the yen over the past You know for for quite a number of years it looks like but I think with the again with the Bank of Japan looking to Hike rates you should see now this start to roll over Last week there was an opportunity to look for short trades within this area here And that is what pretty much happens if you do get a pullback if you're not in this trade You need to get a pullback up into that zone. I think that's going to be nice for a short trade I wouldn't even even though I'm a buyer of the other pound at the moment My bias is to buy the pound. I wouldn't buy it against the yen I'd look for something a lot weaker like for example the euro or the Swiss Frank So that's where I am my bias Euro dollar the euro hasn't really Strengthened in terms of from a fundamental perspective The the euro has kind of got stronger really based on a bit of dollar weakness and There was some euro news and it says here ECB officials Back June cut with some thought keeping the doors open to April So again the ECB still looking to cut rates at the same time the Fed are and it says here that Momentum is building for the June interest rate cut that European Central Bank President Christine Lagarde flagged on Thursday Speaking a day after she stressed that Additional data are needed before monetary easing can begin and that we will know a lot more in June policymakers echoed that prospect but a few though suggested a Swifter move in April shouldn't be completely ruled out So the possibility that they're a rate cut sooner in April the possibility of that This week had an effect on the euro But not enough to basically push it to Against lower against the dollar right so the dollar was seen as the weaker of the two, but this now starts to set up In terms of a Short trade because if the data comes out supporting Inflation comes out higher than expected this week Then I think that's gonna be actually a really nice Short and to buy the dollar and out of the two my preference would still be to buy the dollar over the Euro, but if you are looking to buy the euro then you're looking for a pullback into That demand zone there before looking at going long Euro yen and Euro yen again rolling over still in this trade So this is decent as well So this is pulled back and now we're looking for you know really just pullbacks as you know rumors start to ramp up about a potential rate hike for the from the Bank of Japan now it could be an opportunity to to sell the yen in terms of short the yen if expectations don't come out as as expected and maybe you know April might be the Time of the rate hike, but overall I do think that any pullbacks into a zone should be a nice a nice buy trade In terms of buying the yen and short in the euro If you do want to be a buyer of the euro for whatever reason then These are the zones, but I can't imagine Really looking to buy the euro especially against the yen I Don't really buy the euro against us with Frank Yeah, so there's that Euro pounds and the euro pound again pounds jumping against the euro I was waiting for a really a short, but it just didn't set up on this So unfortunately, I didn't manage to get involved in this there is a nice technical level down at these levels You know this support this demand zone here But you'd need really Disappointing news for the pound in order for this really to kind of move to the upside because again The comparing when central banks are looking to cut rates the pound is later and the euro looks sooner So the path for this resistance should still continue to be to the downside. So any pullbacks in fact should Be seen as short in opportunities But that might slightly change if again this week you have unemployment coming a lot Higher than forecasted. So let's you know, see what happens there Aussie dollar and the Australian dollar you know been a been a buyer of the Australian dollar or definitely had a buyer buyers on that and Against the US dollar. It's done well this week They have come up into, you know, a bit of a pivotal Supply zone, but I would continue to see the Australian dollar strengthen I don't say any pullbacks into demand. I think should be Buyers especially because the Australian dollar were looking to the RBA are looking to cut rates Later than the Federal Reserve. So For me any pullbacks would be Buying opportunities and that would be really where my bias is either there or, you know, somewhere down at these lows Of course the data needs to support the narrative If there is inflation data that comes out that supports a rate cut Sooner from the Australian dollar then of course, you know, all bets are off But while the data is supporting, you know, the RBA to cut rates after the The US dollar then really this is where my bias is going to be and Finally gold. So gold blasting through technical levels, right? Spoke about this last week. I was thinking that it could be a potential stop hunt, but not quite Gold said climbs to records On mix of Fed Pivot and geopolitical risks, right? So rate cuts Helps boost gold and also as well geopolitical risks risk off environment also helps gold, right? So bullying rallied almost a hundred dollars an ounce Over past five sessions the risk of stock market correction may have prompted buying. So Yeah, we've seen that come into play also as well It says here from ING China buys more gold in February So China's central bank added gold to its reserve for the 16th straight month in February as reserve diversification in geopolitical concerns push central banks to Increase the allocation towards safe assets. We believe this is likely to continue this year. So Gold I guess just from a again fundamental perspective If you're looking at, you know a weaker dollar, then you should really look for Higher gold just makes sense, right? They work inversely most of the time Now in terms of trying to short gold it would be a very very difficult to short gold as pretty much we're Multi-decade highs and there's nothing to kind of refer to the left In terms of any kind of support resistance supply or demand or supply in this in this case, so Now we're in uncharted waters So you really have to kind of either wait for a price to prove that there's supply here and then wait for a pullback or You're really waiting for either prices to move higher or make a Lower high Sorry a higher low prices pulled back into that higher low and then you know, you're looking for something like that, right? Whether you're buying or selling but Yeah, I think that gold Should really be the buy as especially as you go into, you know, the election and and the rate cutting cycle So really really nice and again for those of you who know about stop hunts I think this could set up actually for a decent stop hunt for a short But again, you would need the data to support that and Many traders don't believe wouldn't believe this could be some sort of stop hunt. It's they think it's gone too far, but I guess the guys in the group we know otherwise, right You can get stop hunts that can go hundreds of pips And you won't necessarily see it most people won't see it until after the fact so When prices are down here, so if prices do close back inside this area by a certain amount of pips then and obviously You know, you've got the fundamentals on your side Then this could also be a decent move all the way back down to this demand zone, but Ultimately, I would probably look for Towards medium to long term I would expect gold to appreciate against the dollar as the Federal Reserve start to cut this year So if you've missed out on this trade, I think you're definitely going to have to Wait for some scenarios to play out, right? So again, if you're looking for higher highs and then a pullback like that, you know to get in If you're looking at long trades or you're looking at something, you know That could happen somewhere around here where you get a move like that and then it moves to the upside but either way Personally, I'd wait for a demand zone to develop Before looking at going Long so with that being said that's it for this week I hope you have a great weekend and A fortuitous week and if not, just make sure that you were managing your risk and Don't blow up your account. There's no need to blow up your account or anything like that Don't risk it all you know just manage your your risk and And as long as you're going for good risk reward, you know You should be okay in the long run as long as you've got a profitable strategy, right in terms of a profitable approach To to trading and hopefully my videos guiding you in terms of the right direction overall, right? So Yeah, have a great weekend and I'll see you next week