 Hi everyone, my name is Liam Rowe, Covenancy Trader and Trading Coach at trading180.com Welcome to this week's Applied Demand for us and Gold Fundamental and Technical Analysis and Let's get into the analysis looking at the week ahead Zoom in a little bit Here we go. So week ahead It says Fundamentally it'd be very busy week in the US with the earnings season kicking off FOMC minute speeches and Search speeches from several Fed officials and the inflation rate and retail sales data for September in the UK employment industrial production and GDP figures Data will be released and China will be published will publish Inflation rate and trade figures elsewhere investors will be watching for Indias and Bank of Korea and it goes into some in-depth I Guess analysis as to why the You know the data that we're that we're looking at all that trading economics is looking at Will have the impact that it does so I definitely suggest that you do go to trading economics and Just click on trading economics comm and in the week ahead tab right there and you can have a read They've actually got quite a lot of analysis Here not obviously everything is is Pertaining to the pairs that we trade overall, but yeah I think there's going to be definitely some market moving news, especially I think the FOMC minutes as well as the CPI figures. I think is out this week. So let's get into the The charts and starting off on the dollar index and the dollar index is just a measure of dollar strength Against the basket of currencies and it's always best to zoom out and see what's happened over, you know The past year a year today or at least one year and we've just seen this massive uptrend Driven by a really dollar strength and so It's fundamental strength right because ultimately when you're trading currencies you're trading one currency against another and Value is really kind of driven by some factors like a GDP inflation which then sets monetary policy as well as risk sentiments. So I do have a Webinar which explains it You know how to generate a profitable trade idea and I will link it to this video at some point or it should be in The description box down below. Anyways dollar looking at the dollar and probably continued Dollar strength so the Fed officials won't relent on path to 4.5% and may move higher So drumbeat for hawkish comments have pushed back on pivot bets So there was talks about the Fed possibly pivoting meaning that they may start to be a bit dovish on on the interest rate hikes depending on what information Does and obviously the economy? But we recently had the US jobs Rise while unemployment drops keeping the pressure on the Fed right so we had some decent numbers come out non photo or the payrolls job payrolls climbed 263,000 last month so jobless rate fell to 3.5 percent Data reaffirms traders bets for another big Fed Rate hike and so the labor market stayed strong in September as the unemployment rate unexpectedly returned to a historic low leaving the inflation phobic Federal Reserve on course to deliver yet another aggressive interest rate hike So at the moment the economy Can support rate hikes, which is decent. There's low low Unemployment and jobs are being still created. So with that being said You know, there's gonna be hikes now doesn't mean necessarily that you know, the market is gonna go, you know To the moon, right? That doesn't it's that's in the short term, you know, nobody knows what is likely to happen But in the medium to long term my thing is is that looking for bargains, right? So if you have Price actually come down to an area where you know, you want to get long So ultimately you're using fundamentals and resentiment to determine your trading bias and then only look to trade You know the currency in that direction. So ignore any, you know, I'm not ignoring any any supply zones looking for pullback To to demand zones now this is Could consider this demand not the strongest area of demand yet Personally, but if it does, you know go a bit higher, I think that is decent Confluence because we're not trading the dollar index but decent confluence to look for when Looking at other dollar crosses like the dollar yen dollar Swiss if you want to be a buyer of those And if you know, you see prices come down into this with 110 area and you start to see bullish price action on the dollar index Then that's a decent Confluence for a buy because it will tell you that at least there's some sort of buying coming in on the dollar now No knows which level is going to work exactly but You know, it's just a probabilities game as we understand but the probabilities at the moment are on You know and anyone who is going long on the US dollar. So that's decent for a potential buy in the bidirection Looking at the dollar Yen and the dollar yen. This is last week's analysis I was thinking that with prices do come down to this 141 50 area. I do want to be a buyer here. The yen hasn't necessarily reacted In in the face of intervention against the dollar. We had some intervention And then had the Bank of Japan intervention in you know, maybe about 20 years and so thought maybe it would have sold off but fundamentally the The the yen is probably still one of the weakest currencies It does tend to strengthen in times of risk off But even that this year hasn't been really the case and you know I think that the the market has really been focused on the fundamental side of things when it comes to exchange rate value you can see the dollar has really been Strengthening against the Japanese yen, but we do have And these lines represent from last week if you watch last week's analysis the fact that the Bank of Japan do not want the Japanese yen to We can further right because ultimately there are lines in the sand when it comes to Currency devaluation. So let's see what happens there, but I do think that If they're high crates, then there might be a bit more intervention has to come in at those levels to try to prevent You know the the yen from devaluing too quickly moving on to the Swiss Frank and zooming out a bit and got I'm not really too interested in this pair fundamentally, but nothing's really changed from last week You do have some supply over here In terms of you know market high and then you know, you've got the you've got your market low Which is here market low really just understanding where Expensive in a bargain area is right. So over the past Since what's that May 22nd the market has deems the one? One dollar area as an expensive area and the 93 area as a bit of a bargain for the for the US dollar So this has been expensive Right exchange rate and this has been a bargain exchange rate And so heading back up to potentially another expensive exchange rate and with I think the dollar Again the par for these resistance is currently to the upside and so any pullbacks into you know a zone may be here Or anywhere down at these Lowes that's not quite hidden supply. We got a wide demand zone there I think is decent for a potential Buy if you're looking to buy the dollar looking to sell the the Swiss Frank then really up at the absolute highs Would be where I would be looking but not really interested in this pair Dollar CAD Similar to the to the to the Swiss in terms of not really being interested But if I was the path of these resistance is to the upside and the risk of environment the dollar Does do better than commodity currencies like the Canadian dollar so you can start to see obviously, you know What's happening with the with the dollar, right? So but where we are now, we're still above the monthly moving fair value So personally, I prefer not to trade above fair value, right? That's what moving averages are moving fair value in If you think about it in the context of value then, you know, what's expensive and what's bargain prices or cheap prices Then you know, you really want to look for, you know, at least fair value And not trade at, you know market highs So as soon as prices would come down to anywhere around here possibly there's no really demand zone here at the moment I mean, you could draw one there But it's not going to be the strongest unless it kind of breaks to new highs and then a pullback would be decent But I think the nearest decent demand zone if you're looking to buy the US dollar against the Canadian dollar It's gonna be below fair value and then Really down to the one three twos that'd be a decent pullback for a decent long trade Moving on to the New Zealand dollar US dollar and again commodity currency is not doing so well against the US dollar and you've got Yeah, I think probably This area here Is the nearest price to 59 60 cent area before you can really start to look for any kind of Short trade and buy the US dollar Again, there is some supply here, but it's below the monthly moving fair value So I'm not fan of that, but if prices do come up to here That would be okay for I guess a decent short trade If you believe that the US dollar should strengthen against the New Zealand dollar the New Zealand the bank the RBNZ We're actually quite hawkish in terms of their In terms of their their monetary policy and so And so yeah But I don't think it's gonna really do any ready into any significant degree Against the dollar if it does come up here, then that would be a decent short as far as The US the US dollar So Yeah, New Zealand dollar any buyers nothing really no levels that I'm keen on although Zooming out we are coming towards a 55 area You know, it's pretty gonna be a significant area in terms of just technically, but let's see Whether that would be a buy in the future. I think in a risk on environment Then that's gonna be decent for a potential buy, but really not now or unless the CPI figures Come out as come out lower or the fed start to do, you know pivot and become a bit more dovish And I think that's gonna be a very nice potential buy for the New Zealand dollar pound dollar. I'm actually in this trade Got short at the one 14 78s and this has been a profitable trade here and There was supply zone there That's a wait a little bit for it to come back up To that zone in fact, I think you pretty strong this up to the highs and so Yeah, we were looking at, you know, this area here And it kind of touched the that supply zone there and so really a really nice trade so far profitable trade and one position now And hopefully it can kind of roll over. There's actually calls for the the pound to reach Parry so I'll see if I can hold on at least to one position and see how far it can go and looking at the The UK where is my Which article did I want to look at and it wasn't that one it was I think it was this one No, no, no, it wasn't that one either Oh, maybe maybe I didn't have it but I think I must have Closed it, but basically long story short the UK isn't doing so well and I know the government did a U-turn As well, which did, you know rally the markets a little bit and But ultimately I think it's more to do with the fact that The UK economy isn't doing great cost of living crisis Is is worse energy crisis is is really hurting the UK and Yeah, here was something that I found as well. So UK faces deep long recession and this was a Deutsche Bank economist and so David Folkerts Landau Chief economist at Deutsche Bank sees a painful recession ahead for the UK that could last three or four quarters and Says the pound is more likely to climb back to 115 then hit parity With the dollar He speaks with France. Yeah, so this wasn't the one where I saw one dollar, but Strangely enough, I think 115's okay, so That was a bit of a strange one 115's is probably where we are Where we were anyway, we did actually hit the 115's and that because that that was the 27th of September all right 27th of September was the Was the actual date of that video did hit the 115's but for me So that's that has come true, but again the latest reports really are saying that You know, we could go back at these back down to the 103's and even beyond that So that's the reason why I am short on the the pound So there we are you do want to be a buyer of the pound for whatever reason then you do have a Decent demand zone right there moving on to the euro dollar. I wanted to get short on this, but just wasn't an entry around here so looking at that as a supply zone and Looking at this as a supply zone That whole area Prices just didn't quite come up into the zone Otherwise, I would have looked for a nice short around here and it did roll over, but we can't catch them all unfortunately But with the euro You do have I guess a bit of hawkishness and the ECB naggle want significant rate hikes to fight High prices and central bankers must be more persistent than inflation and the bundesbank president naggle comments in sui-deutsche interviews, so No surprise here that you know, you do have some hawkish members of the European central bank who are Who are looking to try to get inflation down by Try to trying to raise rates as much as possible But the problem for Europe is that they've just got lots of issues going on with with Russia and then the energy crisis Cost of living in a cold winter Which if you hike too much will then you know has economic effects And so, you know, it's okay to try to hike But if the economy is seen going into a deeper recession then the market is gonna price that in rather than the value of the The the rate hike because if the rate hike is seen as having a negative effect then It's really not gonna, you know appreciate a currency although it typically does but in certain situations It doesn't there's such things known as maybe a dovish hike Or a hike that really may hurt the economy. So it's not all hikes are bullish or appreciate a currency so my Position is still to the short side If prices do come up here again or even higher than I would look for personally an entry This is not a trade call. Of course, this is just me telling you what my My bias is and where we should be going and I've been short on the euro dollar for 18 months You know for pretty much the whole of 2022 into 2021 going on 1920 months, you know, we wish we were short from somewhere around the around February. I think it was 2021 somewhere around here and That was the odd bias since Doing the fundamentals and we can see how it eventually played out anyways looking at the Aussie dollar The Aussie dollar again in a risk off environment The dollar the US dollar should strengthen But also as well the Australian dollar and the RBA came out recently and pretty much said that they they did a dovish hike Which is they didn't hike as much as the market expected. They were supposed to hike 50 basis points, but they actually hiked 25 so the market's taking that as being quite dovish alongside an environment where you do have Where we're more probably risk off than risk on the dollar being very hawkish the US dollar being hawkish So any pullbacks into that zone, although it's not the greatest supply zone For me, I wouldn't necessarily get involved in that but you can I personally if I was looking to trade this pair Which I'm not really But I understand why you would I would say probably the one that's sorry the 0.66 cent area Is is really the air it's looked for any kind of short trades, but if you do get The any kind of dovish pivot from the Fed Then the Australian dollar could be a potential buy But I think it's pretty gonna be one of the last commodity currencies I'd rather buy the New Zealand dollar or even the Canadian dollar over the Australian dollar at the moment just purely based off of their dovish stance when it comes to Their monetary policy Ozzie yen again, I'd probably expect this to roll over You've got some supply there you've got some supply right here But I'd expect it to roll over a bit more because they are dovish on their hikes but if you are a buyer you want to be a buyer on the The Australian dollar there is actually a decent level Nice level around here. I think anything beyond the 91 area is a decent buy But sell trades from a daily perspective. Yeah, you're looking at Probably that area there Supply and then a pullback so you look for Move back up and then just go down into the intraday charts just to see you know What levels are there and then look for any kind of sell trades if you're looking to Buy the Japanese yen against the Ozzie Australian dollar Although it's not really a pair that I'm interested in currently at the moment And then finally gold and gold on the daily time frame chart is Has made a bit of a move to the upside, of course A potential pullback is in order and I do think That gold is a decent buy Not necessarily trading wise, but just from an investment perspective Again, this isn't fundamental. This isn't definitely my best investment and investment advice, but um from a trading perspective if you are long dollars, right then That is actually a decent area to look for short trades. We should have looked for short trades right there and From a buying perspective, I do think that this area here those to 1620s is I think is Decent for a long trade. I think the dollar towards the end of the year should start to come off the boil a bit and We can but it depends on obviously the data as well as Risk of fears and if risk of if gold does start to kick in as a risk of current Safe haven money does start to flow into gold. Then I do think that's gonna be really nice For a potential buy. Anyways guys, that's it for this week I will see you all in the next video. Take care and speak soon