 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com and welcome to this week's supply and demand forex and gold fundamental and technical analysis. If you're new, a warm welcome to you. And if you are returning to watch these videos every Sunday, a warm welcome and equally warm welcome to you. And don't forget to like, subscribe and share as it's a free way to support the channel and really gets the video out there to the traders that really need it. And our trade process is a combination of fundamental and technical analysis. So we apply fundamental analysis principles to establish directional bias and apply technical analysis, which is supply and demand strategies to time trade entries, established profit targets and risk management. So let's get into the the week ahead and things to really kind of watch for this week. Let me zoom in a bit. So the week ahead is the European Central Bank meeting will be in the spotlight this week with investors looking for any clue whether the central bank is ready to start reducing its massive PEPP asset purchase program. Now PEPP, in case you don't know is the PEPP program allows the ECB to purchase different types of assets and financial markets by doing this, the prices of those assets go up by extension, market interest rates go down. All of this supports the economy by making borrowing cheaper for people, businesses and governments. So ultimately, what what it's saying is that the PEPP asset purchase program is supporting the economy. So the banks are literally, you know, taxed up in the economy. So by reducing the PEPP asset purchase program, it's a sign that the Eurozone is can support itself. It doesn't need financial aid, which is potentially a good sign of economic growth, which is basically what you want to see in the economy. And that should have an effect of actually the currency appreciating, right? So that's the reason why this is actually quite an important meeting also depends on whether they're hawkish or dovish. But this is the first steps, the first, you know, baby steps really, to understand what the central bankers are thinking about the economy, right? Also Australia, Canada will be deciding on the course of their monetary policy elsewhere. Key releases include US producer prices and job openings, Canada employment figures, UK monthly GDP, Germany factory orders and China inflation and foreign trade. So lots going on this week in the in the what's the market moving potential market moving news. So let's get into the technicals and some deeper fundamentals and starting off on the dollar index and the dollar index technically, the dollar really has kind of sold off. So I mean, this is due to some fundamental news non farm payrolls actually coming out pretty much a big miss. So US hiring slows sharply amid Delta complicated fed taper. So payrolls rose 235,000 in August short of all forecasts and employment declines at dining establishments retailers. And just to I guess go over the first paragraph, US hiring downshifted abruptly in August, with the smallest jobs gain in seven months complicating a potential decision by the Federal Reserve to begin scaling back its monetary support by year ends. All central banks, what they're trying to do is say all central banks, but all central banks in the Western world, the ones that the countries that we trade are trying to scale back their quantitative easing and supporting the economy right at a Federal Reserve and Jerome Powell, the chair, Fed chair has come out and said, well, we need to see employment, yeah, and jobs grow so that we understand that the economy is, you know, the economy is growing, employment is growing. And then we can stop, you know, supporting the economy by printing money, that's, you know, the whole or buying basically government debt, which is basically a QE bond buying, right? But they need to see that employment. But because employment missed, and for short of all forecasts, tapering of those bonds and buying the debt is being basically now pushed, right? Because the sooner they do it, the stronger the or the more that the dollar will appreciate or should appreciate, you know, in the shorter term. And the further the more they delay that tapering is the market has to price in what the dollar is worth. So what you're seeing and what you've seen, right, is ultimately, you know, this week or last week, I should say, you know, a bit of a pullback and I think traders are probably looking at buying the dollar in and around these demand zones, but there was actually a miss, right? So do you expect really the dollar to start to appreciate? Of course, in the short term, anything can happen. But for me, I think the dollar over the medium to long term should want to go to the upside. But I think short term wise, you're going to need, you know, a catalyst. And until there is a really good jobs number, that really kind of forces the Fed to taper or look to taper sooner rather than later, I think the dollar may might actually start to be in, you know, a certain range. And I think probably could want to range from around this 91 area, you know, until maybe the 93. So that being said, if you are looking to still be a buyer of the dollar in the short term, just be a bit more cautious because there is probably not great sentiment around the dollar. For now, there are some supply zones, technically, that you could look potentially to take advantage. If you do get a pullback to the upside, and maybe you want to get short. And of course, we use the dollar index as just a measure of dollar strength against the major currencies like the euro, the pound, the yen, you know, basically to as confidence, right? So you want to use, if prices do come up onto the supply zone, up to the supply zone, it's 92 area, 92, 68 area. And then you're looking for short trades, you know, on some dollar crosses, for example, if that's your fundamental bias, because we use fundamentals to establish directional bias over the medium to long term. But if you still feel that the dollar potentially might be a bargain in and around, you know, these demand zones, then obviously you're looking for, you know, obviously a buying opportunity, but also not necessarily on the dollar index, but just looking at dollar crosses, right, some some confidence. If it starts to, you know, you start to see some bullish price action, and you see maybe that the dollar yen is in a bit of a demand zone, then there should be some overall dollar potential dollar strength where it could just be profit taking from shorts, right? Who knows. But ultimately, I think my personal bias on the dollar is a bit tricky at the moment sentiment isn't against the dollar. They needed the non farms to really, you know, perform or at least meet targets and their forecasts. But for now, my focus probably really isn't going to be on the dollar this week at all. So, so yeah, let's see what happens. But ultimately, you're looking for either buy trades or sell trades, I think from technically, I think this the lower down in 91 80 to 91 50 area, I think is going to be a really nice technical area to look for, you know, some potential buyers. But again, you need the data to support the narrative, right? The narrative being tapering, the data needs to support that the data needs to be, you know, positive employment and obviously inflation. So moving on to the dollar yen, and obviously with the dollar selling off, we've seen a bit of a bit of a sell off on the dollar yen. The yen isn't doing so well economically anyway, Japan isn't doing so well economically, because ultimately, you've got, you know, the Bank of Japan Deputy Governor hints at possible economic downgrade. So, you know, Bank of Japan Deputy Governor signaled that the central bank may revise down its economic assessment at this month's policy meeting after a record number of infection cases forced the expansion and extension of a state of emergency. So, the yen tends to benefit from a risk off environment, meaning that when there's fear, uncertainty in the market, sorry, in the marketplace, but also they are still struggling with economically as well. So there's a problem there. So again, a pretty mixed picture. I do probably prefer more upside potential because ultimately, I think the US, you know, economy should start to grow once they get a grip on the coronavirus. And once they do, I think they'll definitely outperform the Japanese economy. So if you do get, you know, prices come down, I don't really like this area as we've touched these levels in these areas, you know, several times. So I think any fresher areas of demand, you know, the 10860 and even probably preferably even the 108, if it did come all the way down here price to come all the way down here, I think that is going to be a really nice buy. But that might take a few weeks to come down. Who knows? I think that what would accelerate that is some more risk off sentiment, you know, virus spreading and, you know, supply chain problems. But ultimately, you probably want to look for, well, I see not financial advice, of course, I'm looking for more long term trades, but for now in the short term, the picture is actually quite mixed. So not looking to really trade this pair for now. There's no really, you know, great technical setups. Anyway, I do want to get long on this, but I'll probably wait for a deeper pullback. Moving on to the Dollar Swiss. Dollar Swiss, again, similar to the Dollar Yen, really want to see some dollar strength coming to play. Prices are coming down. They've been really in this range between this 92 area and 92 and this 91. So basically, 100 pips per pair prices have literally just been, I guess what you call a fair auction. Some people call it a ranging market, sideways moving market. For me, I really like this 109, sorry, 100.905 area for a long trade. Regardless of how, you know, short term sentiment, you know, is on the dollar, I think overall from a medium to long term perspective, the dollar, you know, should beat the Swiss franc. And this is just due to things like monetary policy, for example, the fact that the Federal Reserve are talking about tapering and potentially hiking rates within the next couple of years. And the Swiss franc are nowhere near that. I think it's just literally looking at buyers. So if prices do come down to this area, I do want to be a potential buyer in this zone here. So short term, the dollar could set off, and then it just basically pushes prices to where we potentially want to be buyers of the dollar for the long term. But if you are looking at any kind of short trades, then probably looking at, you know, say just above that 92 areas and 0.9218 area would be probably preferable or just above there to look for short trades. And again, buying the Swiss franc really would be if we are in a risk off scenario. Dollar CAD, the dollar CAD, the CAD didn't have the greatest news a couple of weeks ago. I think they missed badly with their GDP. But we've seen obviously dollar also missed with non-farm payrolls. So we've got a bit of supply here. I think again, this pair is a tough pair to kind of trade, to kind of establish any maybe, you know, long term direction because you do have two central banks that are on the tapering cycle, I guess in the hiking cycle. But short term, they've both had some disappointing news. So again, if you are looking for any kind of buy trades, deeper pull back into this zone, I think would be decent. Actually, matter of fact, anywhere I think from pretty from now, this did make a new high. So there's definitely strong demand at this point. But let's see what happens with that. Or here would be a decent sell technically. But overall, I think from this pair, I'm not convinced fundamentally to either buy or sell New Zealand dollar US dollar. And I've been buying the New Zealand dollar against the Swiss Frank, the guys in the private mentoring group have seen that trade really play out actually had a nice 10 to 1 on one position and still swing trading a final position, which should net me a handsome profit. But from the interest rate and monetary policy cycle, the New Zealand dollar and the RBA is well ahead, you know, when it comes to hiking rates, in fact, their governor have come out and said that they're likely to hike rates. And this is the reason why you're seeing this, you know, this massive move, right? You're seeing one central bank pretty much, you know, saying that hiking rates and another one to federal reserve are, you know, just lagging behind the curve a little bit anyway. So, and especially with that disappointing news, right? So you've got and you're getting divergences, yeah, divergences in monetary policy, hence the reason why you're seeing this type of price action happen. And again, say this over and over again, there's no supply zone, there's no technical level that's going to stand in the way of understanding fundamental analysis. Yeah, so you can draw all the supply zones you want. It's not going to, you know, be a great trade when you understand what is driving prices to the upside. Yeah, and this is basically what is driving prices to the upside. It's monetary policy, you know, interest rates inflation and the market really kind of pricing in what's, sorry, one second. Yeah, pricing in what the value of the New Zealand dollar will be once the RBNZ do hike rates. So this is by the rumor, right? This is, this is by the rumor. Yeah, by the rumor, right? They bought down here and understanding that they're pricing in what a rate hike is going to be. Yeah, and by the time the rate hike happens, the smart money would have already have made their money. That's pretty much, you know, what happens. And that's what we do as fundamental analysis traders. We're looking for the rumor, yeah, where the smart money you're going to be buying and then we ride, you know, the trend, you know, or to the upside or to the downside. So for me, it would be in the short term anyway, for sure, it would be buyers at the moment in this strong trend. The only way really to kind of get involved in this is if you see a really deep pullback from that area, or you're looking at maybe if you get a higher low, higher high happen here and then a pullback into that zone before looking at getting long. If you are looking to get short is now a decent time. Technically, I actually do like this. Technically, there is some other confluences in here, one of them being a decent level of support and resistance within that supply and demand zone. But ultimately, you want to probably wait for a pullback, you know, but that would be my school of thought. Yep, you know, there might be an opportunity to short here, but not every opportunity is a good opportunity. Pound dollar. It's a pound dollar. Again, being driven by some potential short term negative news for the dollar. So again, seeing the technicals not play out is not surprising. It's not surprising because you've had some poor news with non farms and jobs and tapering and potential tapering. So we've seen prices go to the upside, but the pound also has its potential issues coming. And I think they are going to the government is going to resolve it. So UK's 2.1 million hidden jobs gap looms over the recovery. So about 2.1 million UK jobs are still affected by the coronavirus pandemic pointing to a bumpy economic recovery, I think tank claimed. And in this paragraph, it says in a report published Thursday, the Institute for Public Policy Research warned of a hidden jobs gap positions that remain furloughed or lost as the government prepares to end this flagship wage support program at the end of the month. So end of September is when the government is scheduled to remove the furlough program, which is basically paying companies or supporting companies and certain employees and paying their wages. And yes, so the furlough program has pretty much what it is. So if the government removed the furlough program, it means that businesses are going to have to basically support certain their employees and pay their wages. But if they're struggling themselves, then that might be an impossible task leading to potential higher unemployment. But there was an interesting quote at the end of this, we should keep and tweak the furlough scheme until the labor market has genuinely recovered rather than put the lowest earners at an unnecessary risk, Jung said. So pretty much if the government ends the furlough scheme at the end of the month and businesses aren't ready for that, and then they have to start laying more people off, then unemployment goes lower, unemployment goes higher, and then there's issues there. So I think there's a possibility that they could extend the furlough scheme until they do have businesses, because they've done it once before, until they feel that employment is at a certain rate. And then they might just say, all right, then, well, we might remove it next year, April, for example, because they don't want really high unemployment. But that being said, going back to the technicals, I think if the UK government do do something like that, and any pullbacks, I think you're going to see higher highs to the upside. The pound dollar is a bit of a strange pair as well, because you do have two central banks that are looking to, again, taper and high crates. Not my currency of choice is really not on my list. But if I was biased to one or the other, it probably be being slightly more to the pound over the US dollar as there are bank forecasts, a lot of bank forecasts are forecasting higher pound prices exchange rates over the next coming quarter or two. Moving on to the Euro dollar and the Euro dollar again benefiting from weak dollar prices, poor short term sentiment. So what you're seeing now is higher highs, higher lows being made. Again, European Central Bank this week meeting the Euro area inflation may just justify end to ECB crisis mode says not. So the PEPP, which you spoke about earlier, expiration in March 2022 should be reckoned with and September decision should slow purchase pace. So again, if they slow the purchase pace, that should potentially be a positive step towards the Euro's appreciation. And also what you have is the ECB scene slowing the pandemic stimulus again as economic recovery advances. So European Central Bank will start to slow down its pandemic bond purchases in the fourth quarter of May, not exhaust the whole 1.85 trillion euro program before it extends next year, according to Economist surveyed at Bloomberg. So an improved economic outlook will allow policymakers to reduce the pace of buying from 80 billion euros a month to in September to about 50 billion euros in March. They said the decision to terminate the program then as currently planned is only expected at the end of the year. So with the dollar recently not doing so great. And with Europe potentially starting to kickstart their economy and reduce the reliance on the Central Bank, you could see potentially higher euro in the short term. So any pullbacks, I don't know whether there be this, you know, big of a pullback up a line, maybe 100 or two pips, 150 pips or so, not sure whether you'll get that. But if you do in the short term, and the European Central Bank are maybe more hawkish than dovish, then I think the euro is would be a decent buy in at least in the short term. I think the limits of the move may be up to maybe this 11975 area. If not, then you're looking at at least the 1 to 150 area before potential, you know, short trades. And again, that would really be because the US and the Federal Reserve are still ahead from a monetary policy perspective. Then the European Central Bank, the European Central Bank can't even thinking about hiking rates, whereas the Federal Reserve are so decent, short term trades, positive for the euro. But I think overall long term, until that, you know, that narrative shifts, or there's the data, you know, continues to come out poor for the dollar and positive for the euro. I think the path of these resistance is still to, you know, the downside. Moving on to the euro yen and euro yen, a decent buy. Again, we've seen positive euro data come out. So we're seeing, again, higher euro prices, more demand zones being made. So if you do want to be a buyer of the euro against the yen, this is going to be a really nice zone, nice fresh area of demand. If you're looking to get short, I think now is actually decent. But again, you'd probably need a bit of more of a catalyst. Either the euro, European Central Bank coming out is quite dovish, or risk off coming into play where the yen benefits in that environment. Moving on to the Aussie dollar, Aussie dollar again benefiting from potential dollar weakness, but also a bit of a turnaround potentially in the Australian dollar, the Australian economy. So for now, they may come out of lockdowns. And I've been saying for a while that once the Australian economy gets going, I think the Australian dollar is going to be a really good buy. So for me, any pullbacks into demand zones are going to be for me a buy, not necessarily against this currency pair, probably more against the Aussie yen or something like that. But I think any pullbacks, you know, it's going to be a really nice buy. Again, this is proof of value, POV, proof of value. What does that mean? It means that this was an absolute bargain for the Australian dollar. We know that because prices have proved it, right? So if prices ever come back down to these areas here, these demand zones, yeah, you may look for potential buy trades. But again, is the US dollar the best currency to buy the Australian dollar against or sell the US dollar against the Australian dollar, then I would say probably not. You want a weaker currency. And that weaker currency is the Aussie yen. So the yen potentially going into, you know, more lockdowns, I think a nice pullback is going to be really nice. It's going to be really, really nice for a potential buy. As long as risk remains at least more on then off, right? I think these areas here are going to be really, really nice for the 80 round numbers going to be nice for a potential buy. I'm going to remove this supply zone. And again, I'll probably say looking at that area there for any kind of short trades. But again, you probably want more of a catalyst to, you know, some risk off catalyst to, you know, really kind of, you know, push prices to the downside. But for me, my overall long term bias is to the upside. So I will be literally waiting for pullbacks in and around these zones here before looking at getting long and finally gold. So gold didn't really move much this week. We're in that tight range. And then the disappointing news around non farms push prices of gold higher, tapering being obviously delayed. That's positive for gold. But it's interesting. This is a very, very interesting level. So let's see what happens if there's any kind of positive dollar news, you could see a bit of a sell off or what I'm probably expecting to happen is a bit of a stop hunt above the level. And then prices go to the downside. But again, that stop point would have to be driven by some dollar positive news. And you might be thinking to yourself, well, stop hunts, what's that got to do with supply and demand? That's beyond the scope of this supply and demand video is something that we trade an extra strategy that we trade in the private mentoring group. But it all comes under the supply and demand category. So ultimately what we're looking for, if you're looking at risk off, yeah, so risk off, you're looking at probably higher gold prices, as well as understanding inflation as well, inflation keeps going to the upside. That's going to have a positive effect on gold because gold is a hedge against inflation, right? But if you do see some a bit of a pullback and you want to be a buyer of the dollar, one of the things that you can do is actually start to short pattern. So it's short gold by buying the dollar. So actually, in fact, getting short again right now, maybe a decent short, but ultimately, if you're looking to buy gold based off of risk off, then you're looking at pullbacks to demand. If you're looking to risk is on and the US economic recovery is still intact, then you're actually probably looking at, say, probably put your best to look to for potential short trades at supply. Anyways, that's it for this week. I hope you have a great week and a profitable week. If you don't, it's all right. Not everybody has a profitable week as long as you have good risk reward trades. Ultimately, when you stick to the plan, you should be profitable in the medium to long term. So guys, have a great trading week and speak to you all soon.