 Hi, my name is Leon Roe currency trader and trading coach at trading 180.com and welcome to this week's a plan demand Forex and gold fundamental and technical Analysis if you're new again very warm welcome, and if you're returning Equally warm welcome to you, and please don't forget to like subscribe and share if you find the analysis that are provided on the trading 180 YouTube channel useful and definitely press that like button as it gets it helps the The algorithm I guess get the video out there and get it ranked and really the quality content out to the people and traders that really are interested in this in this subject so Just a quick recap on what we and our approach to trading is We apply fundamental analysis to establish our directional bias and then apply technical analysis Which is basically supplying demand strategies to time our trade entries risk management management and established profit targets So let's get into the week ahead in the upcoming Potential events that are market moving so in the week ahead All eyes turn to US jobs report due on Friday Which will probably point to a continued recovery in the labor market elsewhere Fed chair power testifiers before Congress While a highly anticipated OPEC meeting is expected to offer guidance into the coalition's crude output plans For anyone who is looking to trade oil so investors also await key data Including worldwide manufacturing and services PMIs third quarter GDP figures for Australia. That's going to be important as well as Canada and The eurozone inflation report and Japan industrial output and retail trade so definitely to market moving news But we'll fundamentally but whether it will move in the in the intended direction or the expected direction is another thing And this is due to some risk of sentiment regarding the the new strain of Covid which will get into but let's get into the Technicals and some in-depth fundamentals and risk sentiment analysis and starting off on the dollar index at DXY The dollar index is just a measure of dollar strength against the basket of currencies the major currencies like the euro the pound and the yen and we've basically come up into Or we were you know The dollar was pretty much making higher highs higher lows And this is really due to the expectation that the Federal Reserve are looking to a taper Bond purchases and be hike rates within the next a potentially in an extra six to twelve months, right? so Hiking rates generally are positive and appreciate a currency, but what we've seen on Friday was the the new strain I guess of the coronavirus so Moderna says that the new vaccine For Omicron, which is the name of the new Covid strain may be ready in early 2022. So dangerous new variant could evade current shots CMO says and company mobilized hundreds on Thanksgiving to start work and let me see a couple of paragraphs So Moderna Inc. Chief Medical Officer Paul Burton said he suspects the new Amoricon coronavirus variant May elude current vaccines and if so a reformulated shot could be available Early in the new year. So what does that mean? That means that they are already working on a solution and The market generally tends to price in or wants to price in the future, right? So it's not it's not pricing in what's it prices in obviously what's happening now but from the expectation of what May happen in the future, right? So It needs to reprice and revalue what what they think I guess exchange rates and the value of Commodities are potentially if this new strain causes issues and problems to global growth, right? But then there is the counter argument to that which would be well If it's not as deadly as expected or if the current vaccines actually do work Then it's like well what it's all the fuss and all the worry about so then the market then will have to potentially reprice You know the the value of of assets and exchange rates, which means that you could potentially have you know higher Commodity prices and potential exchange rates, right depending on whether you're trading risk offer or risk on currencies So we should know about the ability of the current vaccine to provide protection in the next couple of weeks spur and says said on Sunday on the BBC's Andrew Mars show so at the moment a lot of uncertainty and again, I should really kind of refer to the trading 180 spreadsheet and one of the tabs that we have which is all just a reminder of our risk on risk off guide and In general in case you don't know Currencies that generally tend to go down in a risk-off environment Is all the commodity currencies and safe haven currencies generally will go will rise as money flows into safe haven assets And currencies right same thing with stocks stocks didn't generally go down commodity currencies Sorry commodities generally go down and it's what you're seeing is basically what's happening Even though gold and silver is slightly different at the moment. I thought gold would have had a bit of Stronger reaction to what's happened. But the point being is that in a risk-off environment Safe havens are gonna Say the currencies are gonna appreciate But if for example, it turns out that the safe haven currencies or the Vaccine isn't as deadly or as much as a concern as expected then What's Recently happened with I guess with money flowing into safe haven currencies money will flow back into those commodity currencies, right? And then, you know, you're looking at really kind of buying up bargains But we have to obviously see what happens with the development of the vaccines So that's how we really play the the risk on a risk-off currencies But at the moment, you know, it's a it's a pretty much a wait and see environment Doesn't mean you've got to trade every single day just means that you've got to sit on your hands and wait for the For the for the picture to become a bit clearer, right? But the positive around this is that if we have to make a brand new vaccine I think it's going to be early 2022, which is pretty much, you know, the next month or two Before is that's really going to be available in large quantities. The remarkable thing about the mRNA Vaccines the Moderna platform is that we can move very fast. So risk-off may not last for too long if there is a vaccine that can help with the new Omicron, sorry Omicron vaccine So The Omicron variant, so I'm getting a bit tongue-twisted. Anyways, so there's that, right? That's that's the over Riding sentiment at the moment So again, we've have probably more risk-off going into next week but If things do start to dissipate and things aren't as bad as they were once feared the U.S. Child's report, which is going to be one of the things that I've got to be watched is expected to actually show another strong increase so U.S. employees probably added more than half a million workers for a second straight month in November pushing the labor market closer to a full recovery Despite swirling inflation worries and persistent COVID-19 infections. So there is some positivity coming into the dollar and But let's see what happens to payrolls are expected to rise by 550,000 and the unemployment rate to edge down to 4.5 percent according to the median experts So estimates of economists ahead of the Labor Department data due Friday in Washington so a strong jobs report coupled with another monthly jump in consumer prices in Labor Department out in December 10th Could seal a decision at the Federal Reserve's mid-December meeting to accelerate the tapering of bond purchases But a new pandemic wave might still scupper that a fear that cause market jitters on Friday So that's pretty much, you know, what's What the thinking is, right? We don't know whether the virus is going to cause the Federal Reserve to not Be so hawkish in their in their monetary policy But let's see what happens obviously come Monday Tuesday in the following weeks and whether the virus is a concern if The other virus turns out not to be a concern and the dollar has pulled back Then it could be a really good buy trade on the dollar I mean, I'm still overall bullish on the dollar as long as the data supports that narrative. So Let's see what happens. So from a technical analysis perspective We could see prices obviously come down on the dollar index looking for buy trades not necessarily on the dollar index but more on dollar pairs and you just use a dollar index as As a confluence, right? So if prices do come down a start to see some bullish price action and you go on the dollar Yen for example dollar Swiss and you see the same similar setup, then you're looking for potential buy trades But again, let's see what happens with risk sentiment I do think these these pullbacks are probably necessary anyway because you you have had You know quite a large move to the upside and then when you get these Quite vertical moves you generally tend to get a steeper pullback. So let's see what happens with the dollar and the dollar index moving on to the The dollar yen and again the yen is a risk-off currency So you would expect this to happen But again risk-off can actually just push prices to where you want to be a buyer and in fact I did actually want to be a buyer down here, but let's see what happens I think this is a really nice buy if market sentiment does turn around and the vaccine You know does for example work on the new strain or for example The new strain isn't as bad as they you know, the maybe the World Health Organization are thinking so Yeah, I do think a buy trade in and around this area depending on obviously what happens on the Monday Tuesday And how the markets reacting is a I think is a decent buy or the 111 50 is going to be an even better bargain. So let's see. That's that's my part Parfili's resistance if you are trading risk-off for example, if you want to trade more of a risk-off Currency mean that you're looking to buy and take advantage of the risk-off sentiment Then you're looking for pullbacks into that demand zone if prices do come up to that 115 area before looking at any kind of short trades So that's where your first area to look for short trades would be unless prices make lower highs and lower lows For example, if you see something like this It's one two three and then you see for example prices do something like that Then you're looking for a pullback into that area because that would be where supply is before looking at a Short trade so first area to get short Or if you see prices basically do something like this lower highs lower lows, then you're looking at a sell trade Sorry, I say a buy trade but buy trade for the dot for the US So for the Japanese yen in that area or in that area, right? moving on to the dollar at Swiss Pretty much similar thing going on here and again the Swiss Frank does react is a safe haven and currency and money tends to float into that area there so again the Short trades if you see anything like that happen and you want to get short on the on this on the US dollar against Swiss Frank or you're looking at again lower highs lower lows and Then a pullback into one of those lower highs Areas because again that would be where the strongest area of supply is but at the moment This demand zone from this hidden demand zone area here and it's 92 Round number would be actually a decent buy technically, but again, we'd have to really kind of see What the the variant is is saying on the Monday morning into into the rest of the you know the week or the next couple of weeks moving on to the dollar CAD and and the CAD again is one of the commodity currencies As you would expect to kind of sell off oil is is setting off So and the the US dollar acts and can act as a safe haven currency So you're seeing what's pretty much happening with price as expected We know we're making higher highs higher lows and again on the Friday money flew into the the US dollar ran out of the commodity currency, which is Canadian dollar, but the expectation I think for the Canadian dollar, I think fundamentally is for actually a lower Canadian dollar as we've been watching and reading I guess in the for some of the bank analysis that we look at But from a risk-off sentiment perspective, you would expect the pathways resistance to be to actually the upside So let's see what happens Here and do you think that is a is again a decent buy In a risk-off if you're looking for a pullback into this one to 650 if oil continues to you know Want to sell off then any pullback into that demand zone is really where you want to look for some buy trades if you're looking for a buy against the The US dollar and the buy against the and buying a Canadian dollar then Ultimately, I think this level has probably been touched several times and once the level is touched You know a few times for example once twice three times four times. In fact, that's the first time sorry Two and then three for me. I think this level starts to become a bit weaker You might want to look for something just above that area there For a potential buy trade on the Canadian dollar and a short trade on the US dollar if you're looking at this currency pair That would be where the short the best sure anyway, the cheapest short would be Moving on to the the New Zealand the sorry the the British pound US dollar and Again, we've got lower highs lower lows being made Not surprising when you think about again from a risk-off sentiment perspective. I think I'll move this down slightly Let's see if yet, maybe around here Just so that we haven't got so much Demand and then we can actually put that down here So again the path of these resistance and I've been saying this for the past few weeks Ever since really we kind of came up to this area that we were looking at, you know short trades, but I Think any pullback into that zone. Maybe it might be a decent sell And buying the US dollar Technically I do like that But fundamentally, I don't really like the pair but in a risk-off environment I think the the US dollar should want to Strengthen over the the British pound. So I do think that that area there is a decent Sell trade if you are looking to buy the pound for whatever reason, I think there is Going to be some sort of Announcement that the Bank of England will potentially look to high crates, but I don't think they will especially again due to COVID risks that can still derail the UK recovery and if the COVID does potentially get worse then I think central banks around the world are not really going to look to hike in that environment environment because the Hikes really need to be supported by a growing economy and if the economy is not going to grow And in fact, it might potentially go into no more lockdowns. It might stagnate and contract then Central banks are going to look into the future and they're not necessarily going to want to Hike rates in that environment But the Bank of England chief economist Hugh Pills said that new variants of the corona virus and the risk of another Lockdown are some of the risks that could blow off track the view of policymakers that the UK economic recovery is Matureing so speaking on Friday as the emergence of the new variant of COVID-19 world global markets Pills said the arrival of any new strain could disrupt the Bank of England's guidance So monarchy policy that rates have to rise in coming months So pretty much as I was saying right you to hike in in this environment is is a bit of economic suicide potentially and even before the The the COVID variant really started to get going There was there was this article And it was really the question of will the UK interest rates rise in December and history suggests No, and an interesting statistic is that the central banks only December hike in 45 years came in 1994 Really one of the main reasons that central banks generally don't want to hike in December Is is because and that's obviously they're really kind of forced to due to inflation is because you've got to think about Retail spending right if if and and household mortgages and if People were concerned more about expensive prices and borrowing costs and lending costs Going going up then they're gonna spend less throughout Christmas, which then again hurts the economy So it's not the smartest thing to do and it's not something that the central banks generally do and as you know You know in the last 45 years the only Bank hike in December came in 1994 So You know here we go Christmas is a little more than a week away from the December 16th rate decision and policy makers led by Governor Andrew Bailey had been pointing out Reasons why they might hold off on rates those factors may have May leave the Bank of England reluctant to disrupt the bumpy recovery from the pandemic with about of monetary tightening Until after the holidays are passed and that makes you know all the sense in the world to hike just before Christmas and You know families might be struggling to you know pay we pay their mortgage payments In December as well as you know, you can't see you can't but it wouldn't make that much sense but again central banks might be forced into it if if Inflation keeps going higher, but let's see. I think now that the COVID New strain is is really out. I can't really see them I think the probability of them really hiking rates is is probably slim Very very slim which again looking at this technically would make all the sense in the world if you you know You do get a bit of a pullback to eventually start to short right so continue shorting and the trend should continue to the downside For at least this year next year when things start to maybe turn around That might be a buying opportunity But I wouldn't necessarily buy the the pound against the US dollar, right? You'd want to buy against a weaker currency anyways Those are pretty much your two options even looking to start buying now the pounds which I wouldn't suggest But if put the pound does pull back into that area there you want to be And you want to look to trade trade the the pound on I think again the path of these resistance would be To the downside and that would be the the area that I would look towards of course not financial advice And this is not any kind of trade calls Just talking about if I was trading this currency pair Moving on to the euro dollar and the euro dollar Had a bit of an update bit of a pullback. I'm saying to the guys in the group I think this is probably more just liquidity driven rather than it really being any kind of euro strength because regardless of how you slice it I think the the euro is still the weaker out of the two and The dollar is still the dominant currency the stronger currency when it comes to monetary policies So any pullbacks into these areas? I think are going to be really nice sell trades Opportunities doesn't mean that you know, I'm not going to say that prices are going to definitely reverse around here Of course, it depends on your entry. It depends on the your entry trigger. It depends on, you know, your your strategy, etc and But for me, I think Any kind of short trades the the bigger the pullback. I think the better the price So, you know any pullbacks if I see a potential entry things line up Then that's going to be a decent short if I don't and prices come up here Then that's going to be the better short, right for me. So so that's where my my trading direction is in but let's see but the When it comes to the ECB the ECB doesn't need to intervene on inflation for now Panetta says so in an increase in Europe inflation is temporary and no need to act Which pretty much means that they're not looking to high crates anytime soon Which again would you know lead you to believe that they want the they're not looking to appreciate their currency at this moment, whereas the Federal Reserve are so ECB doesn't want to doesn't need to follow the Fed in monetary policy choices So they're going to lag, you know behind the The Federal Reserve's monetary policy and strengthening their their currency, right? But also as well, you've also got a fastest inflation in euros history set to raise pressure on the ECB So there is some pressure coming in potentially because of inflation and the ECB may be you know forced to potentially try and talk up the euro But when it comes to actually doing it Who knows? I don't think they will and especially again given the backdrop of COVID You know cases there's also been a lot of disruption. I think it was in Austria with with mandatory Vaccines and I think Germany and as well as the Netherlands. So It's a bit of a mess in Europe at the moment. So hiking rates at the moment I don't think is is is likely of course anything can happen But this is a game of probabilities, but if we look at the euro again, I think the power for the resistance is really continued to the downside And but let's see what happens with that moving on to The Australian dollar US dollar and again commodity currencies are you know the sell right? You've got to sell the commodity currencies Or you're likely to sell the commodity currencies, especially when we're in a risk-off environment So any pullbacks into any kind of supply zones would be really where you're looking at I do like this technically for a buy, but technicals are not really the driving force behind my buying or selling decisions I do think this is a really really nice technical zone, but fundamentally, it's a bit of a chance, right if Monday comes along and things are Looking worse for the global outlook and a lot of more uncertainty You can expect, you know prices to really kind of probably come down to more of this 70 cent area And it's more this demand zone rather than you know reacting to this demand zone But who knows it could be some profit-taking going on But as long as risk is off the path to these resistance is to the downside. So any pullbacks It's probably best to look for any kind of short trades but if again price if sorry the sentiment does turn around and We get back more into a risk on environment then this actually looks like a really nice zone to look for Some some buy trades I think and Gold right to gold didn't react like the other commodity currencies typically do I think commodity currencies, but commodities like like oil and copper for example having a bit of a sell-off You would expect gold in uncertain times to really kind of go higher, but it didn't for now anyway not saying that it won't in the future, but It didn't have the reaction on the Friday that many probably people expected it to but again You would think that with global uncertainty potential dollar weakening Maybe Then you would expect gold to actually go to the upside. So in fact this you know the delay in gold going higher Could actually be a really nice buying opportunity for for for guys who actually want to get involved in gold at that 1793 Area and again You would really only look for short trades on gold if you think that the global Economic recovery is is is still on risk on because money would end up piling into the Into the dollar for because dollar the dollar Gives you a yield right people would rather go into government bonds for example because gold doesn't pay a yield But in a really uncertain times Gold should want to move to the upside. So if you are looking to buy now, it's probably the time Maybe a bit of a deeper pullback before prices do Potentially reverse anyways guys, that's it for this week. I hope you have a great trading week And again, don't forget to like subscribe and share and take care until the next week's video