 Hi, my name is Leo Muro currency trader and trading coach at trading 180 calm and welcome to this week's supply and demand for us in gold fundamental and technical analysis for the week ahead starting the 5th of February. Hope you had a great trading week and If you do like the videos that I provide every week Please don't forget to like subscribe and share the videos with your fellow Trading colleagues as is a free way to support the the channel and get the quality content out to those who may need it. So Getting into the week ahead 5th of February In the upcoming week investors will closely watch for insights from the Federal Reserve officials along with key economic indicators such as the ISM service PMIs and trade balance data Internationally the focus will be on interest rate Decisions in Australia. That's going to be a very important one Although they are expected to hold rates. It's really about whether The RBA the Reserve Bank of Australia are going to be more hawkish or dovish depending on their what they see in the data in terms of inflation and and GDP so additionally external trade data for Australia, Germany and Canada They're going to be watched and in China investors will scrutinize the services PMI and consumer and producer prices China hasn't been doing too well, but that may give China a bit of a boost And if that is the case then obviously that will affect commodity currencies or it should affect I have a decent effect on commodity currencies and Finally Germany will release factory orders and industrial production Canada labour market data and Euro area retail sales and so lots going on in the week and Before we get into the some more technicals and fundamentals. I thought I would go over My trade of the week which was the Swiss yen and looking at the Swiss yen if we go to the the the fundamental Trading 180 sorry This called group and in fact, let me just make this a bit zoomed in a bit too much on this one second. Yeah, so So if you go to the to the group and and the Swiss yen This was a set up It was a stop hunt that I posted to the group and I said if anyone's looking to buy the yen over the Swiss This is a very nice stop hunt set up if it occurs and so If you look at the the stop hunts Set up that I had posted and this was on the 26th of January So it was at the beginning of the week we had seen this set up And this is what I was Expecting to happen in terms of you know prices do you know pop up a pop up above that level and give Some sort of stop hunt indication and then a pull back down into the lows of this area matter of fact That's what I was kind of planning out and that was what was you know I was looking for in the group. So We ended up a few people actually end up getting involved in the trade. So later on That was on the 29th a few days later. I Said if anyone is looking for this trade obviously a nice set up if it occurs And I said they didn't want to get it else getting this trade and there's a few people two traders that also saw the same thing and managed to get involved in this trade and This is the the image. So you had again the stop hunt here occurred right there So that was the level level stop hunt above and the respect in prices to kind of come down which it ended up doing So this was the actual trade set up in the charts. So that was the level the stop hunt here And so the entry was at this candlestick Right here and my stop was about 15 pips above the highs somewhere around there Let's just see what 15 p yet somewhere around here 15 pips. And so that was the risk now They ended up going around Three to one if you know towards the bottom of the range in the book the bottom of the auction But with this trade the way I manage this trade is really I'm taking One-to-one Around here to get myself to really like a break-even position. And then once I'm in a break-even position then I'm gonna say one-to-one taken half position off at one-to-one. So I'm taking you know risk a pound I'm taking you know 50 pence off and leaving 50 pence in the market And then my plan really is to actually swing trade this up We zoom out a little bit more, you know something like on that on a daily time frame chart I'm looking at actually swing trading it down to some of these lows, right? Reason being fundamentally and why I'm getting sure I got short on this was because The yen which we'll talk about in later on in the video is really the only bank central bank The G10 that are expected to look to high crates this year Whereas the Swiss Frank are looking to cut rates. It is an interest rate divergence play going on there I think the Swiss Frank should weaken over the next quarter or so. And so this play now becomes Decent when it comes to certain targets on a higher time frame. So So this is what I'm looking for and I think many of the other guys might be looking for this We've pulled back obviously Not ideal of course We always want our trades to just drop like a stone or you know rise in our in our favor But ultimately I do think that This should eventually roll over if it doesn't roll over worst thing that can happen is that I am I will be at break Even because of the fact that I've taken some profit. So Let's just say prices do come up and men is to stop me out right here Well because I've taken half profit already if prices do come up here Then I haven't lost anything other than you know overnight swaps for example I will still look for short trades because I know like I said fundamentally I want to be a buyer of the the yen over the Swiss Frank So it might offer me another opportunity to get involved in this maybe a better price and hopefully then it starts to roll Over so let's walk. I'll keep an eye on this trade. Obviously. I've entered into some other trades as well like the Euro Swiss and Aussie Swiss and let's see what happens with those as well, but that's been the trade of of the week a profitable trade You know depending on how you managed it or a break-even at the bare minimum. So yeah, that's really the trade So if you do got if you guys are watching this and want to get involved in the mentoring I put up my mentoring probably Maybe once a quarter meaning maybe about four times a year four or five times a year and one of the areas that you can get access to is my trading videos and This is a members only area where I have members wrote only analysis and videos that are in here that you don't see on YouTube So if you do want to join The next intake will be probably maybe around the end of March beginning of April and by the way to all the guys that are in the Discord group This is the members Video as well. So go to the trading videos channel and the latest Fundamental and technical analysis Video is in there and it's not the same as what I provide on YouTube It's more in-depth and I go over all the pairs that I'm interested in anyways So that was the trade of the week. So getting into The dollar index now so the dollar index The massive news this week was that the Jobs really and non-farm payrolls on Friday the headline is blockbuster jobs report turns slowdown narrative on its head So employment jumped 553,000 in January exceeding all estimates and strong hiring is likely to delay federal Reserve rate cuts and so in order for there to be rate cuts. You need to really see a downturn in the economy as well as inflation going back to the federal reserves 2% target and Jobs and employment are an indication of how well the economy is doing and so if the economy if there are you know is a higher employment and low unemployment then It doesn't give, you know, the narrative It's not playing into the narrative that the US economy is Contracting and going into a recession anytime soon. Therefore There will be a delay or there's likely to be a delay to federal reserve rate cuts now I believe that rate cuts are coming this year as we are in an election cycle, but You know, I don't think they're gonna come in March and I've been saying this for a while. So So when we look at really the charts You can see that the market is re-pricing the dollar higher because it's pricing out rate cuts And so this is an equally weighted dollar index by the way and if you do want to You know understand how to get this calculation on trading view I have a video on my YouTube channel if you go to the the Trading 180 page you should be able to find it's like that Maybe the second or third video most recent video that I've done Regarding and it has I think in the title Currency index something like that anyways like that. Maybe the second or third video that I've done a Recent video anyways So we did have you know prices pretty much move to the upside I was expecting prices to potentially want to come down to this demand zone. It didn't do that That's fine. No, I didn't manage to get into some a dollar trade on the dollar Swiss So that's okay as well, but I will expect the dollar to some degree either You know push higher or it's gonna, you know, maybe pull back a bit to push higher I think the dollar is gonna be supported at this level here Can't really see it going below that unless obviously we have some data That that really comes out and really kind of supports the fact that the Fed may start to Cut sooner rather than later. So who knows but for now that those job date that job data Is basically making the market reprice rate cuts meaning that the The dollar is looking to strengthen at some point. So for me the dollar is continued by Many of you been who've been following me on the Week-to-week have been saying that my biases to the upside and you can see, you know, what's been happening So let's see what happens. But if you are short on the on the dollar Then we are up into this supply zone and you also have another Supply zone probably around there to look for a short trades, but Personally, I would probably look for this area You know, the the demand zones is really what I'm looking for in terms of buying the dollar so Moving on to the dollar yen and the dollar yen Again more of a trickier pair to trade because you do have in fact the The market expects as I've seen before the Japanese bond yields and bank shares jump on Bank of Japan rate hike bets so The Bank of Japan are really the only bank that are looking to hike rates this year in terms of the G10 banks And it says it's clear the Bank of Japan hawkishness has increased as MUF J as X Kato and the JGB 10 year yield climbs to its highest in more than a month and so When you have guess a delay in rates cuts by the dollar But also the fact that the yen are looking to potentially hike rates that needs to be obviously Supported by the actual data You can have scenarios where either you're looking for short trades at supply zones, right? Or you can actually still look for by trades if prices do pull back into this demand zone before looking at going long so that's really The play for the for the dollar yen not necessarily again a pair that I'm I've got my watch list For sure, but not a pair. I'm immediately looking to trade until I think the the US dollar really do start to Cut rates and they enter into their rate cutting cycle as this is an election year And so it's probably inevitable that the the Federal Reserve will look to Cut rates at some point So moving on to the the dollar CAD and the dollar CAD We have prices Being and being supported really by recent dollar news the Canadian dollar though did have some decent news of its own. I think the GDP month-for-month, I think it came out as better than expected. So Again, it's a bit more of a difficult pair to trade in the short term because you do have some positive sentiment for the Canadian dollar and I think there's been some pushback on the timing of their rate cuts So whereas maybe about three weeks Go it was probably somewhere around maybe the March April now I've seen reports saying it could be you know May June So let's see what happens But I'm in the short term if I'm looking to trade this I will still look for probably more buy trades on the US dollar and Look for some more upside potential But these are really the zones you're looking at either you're looking at the prices to come back up to the 135s or the 136 round number before looking at going short if you're looking to buy the Canadian dollar Or pull back into one three fours one three three 90s into that demand zone if looking for Some buys on the US dollar looking at the British pound US dollar and again, you've got really kind of two Currencies that are that quite strong and look look into appreciate That's what the reason why you've seen prices kind of enter into this auction this range of what traders would describe it as because you've got two currencies that are appreciating and The market has accepted it to be a bit a bit more of a stable Exchange rate right when you have two One currency is expected to appreciate against the other then you have a trending market, right? So fundamentally, this is what you've been seeing over the past what since yeah since December really Yeah, December mid-December prices have remained within this one two eight 50 to one two six Level now there was some news this week where the Bank of England opens up prospects of red cuts in 2024 if inflation eases it's a key sense key interest rate left unchanged at five point two five and split vote and Central bank drops guidance that borrowing costs may rise. So Pretty much all central banks are dropping the same guidance but the Bank of England were pretty much just warning that if inflation eases then of course then they got to stop Putting rate cuts on the table now. I think initially the market might have interpreted that as being a bit A bit. Sorry one second. Where am I a bit dovish right? Here we are a bit dovish But on the day then we kind of had a bit of reversal but then we had obviously the the News come out for non-farm payrolls and that kind of push prices to the downside in terms of strengthening the US dollar So I think your options still are, you know, technically looking for buy trades on the pound and move back down below this one two six area or looking at the The moves up to the one two eight one two eight fifties before looking at getting short on this currency pair So now looking at the pound yen and the pound yen Again last week we did have price come down into this demand zone and bounced off it. So that was quite nice technically But I think going into the next a few months as long as the data supports the narrative of the The Bank of Japan looking to high crates Probably see upside of this pair is being quite limited and it's probably more downside I said over the medium to long term So let's see what happens with this currency pair if you do want to be a buyer in the short term I think any pullbacks internet demand zone is decent But my bet would more likely be on the yen strengthening overall in terms of in terms of interest rate divergences, so That's where my money would be. I'm not necessarily going to trade this currency pair though Be more like the euro yen and I guess we'll get into that a bit later Those are really your options for the pound yen I do expect prices to kind of stay within this overall auction note or there or there about somewhere like that before looking at again potentially rolling over over the medium term as we get closer to The Bank of Japan's decision as to whether they will adjust monetary policy Looking at the euro dollar so the euro dollar this week we had The euro actually has some decent news so the euro did have Unexpectedly avoided the downturn so they avoid the recession, but struggles persist so Yeah, the year the euro is an unexpectedly avoided the first recession since the pandemic in the latter half of 2023 as firm of growth in Italy and Spain offset the malaise in Germany So it's more of about gross domestic product stagnating over the last three months of the of the year And so what that did was They I think the it came in at zero the GDP and so it kind of was boosted The euro was boosted in the short term and also as well inflation came out as well, but when it It came down slowed less than expected and it clouds ECB cuts So euro zone inflation is less than anticipated at the start of the year testing investors Expectations that the European Central Bank will begin lowering interest rates as soon as the spring and so the Central Bank really need the you know core inflation to kind of come down and other inflation Edges to come down sooner before they start to look to cut sooner But if that doesn't if doesn't come down or slow as fast as they Expect then they're gonna push, you know out their expectation for when that rate cut is going to happen further into the future So Although that initially supported the euro, you know up until Thursday, I think against dollar I think expectations now have to be readjusted in terms of the dollar When they're going to cut an ease and the Federal Reserve and so I think there's potentially more downsides To come I don't think the downside is going to be a massive downside Maybe maybe a hundred pips from here Maybe a hundred and fifty pips from here, but I don't know whether it's going to be a massive downside As it looks like they're I think both central banks are a bit like neck and neck in terms of when they're looking to Cut rates they might cut rates at the same time in this right now. So again, I I do expect the the the dollar To rally a bit in terms of to the downside But overall I think my bias would be to look for buys on the dollar at least in the short term So any pullbacks into a supply zone would be quite nice So if you do get any pullbacks down, you know up into here before looking at getting short Or you're looking for at least that one oh nine fifty to one ten area before looking at getting short I don't know whether I rather you know look to buy the euro against the dollar Although I am a buyer of the euro against some other currencies like the Swiss franc Actually, I think that's the only one. I'm by the euro against them. So that's where we are on the euro dollar euros Euro yen so euro yen This was this is a pair that I'm definitely interested in getting short as well Again, just purely based off of what I see in terms of central bank divergences. So any pullbacks into Some levels are going to be really nice for a short trade You've got these little intraday levels as well So you can see here if you're zooming into the like the hourly where you got a wide zone or first supply daily Supply you can always break that down and look for Supporting resistance zones within that area of supply and look for trades like that, but ultimately Looking at the supply zone I think the best value if it does come up to these highs will be You know really nice if I can get any kind of trade to the short side Of course if you do want to go long then there is that as well You can go long here look for some buy trades if you're confident that the euro may actually Cut Later in the year, so there's probably some sort of may pull back into the buy trades on the euro But overall I do think I would want to be a seller of the of the euro against the yen as we get closer to the To the Bank of Japan's Decision so Looking at the euro pound and the euro pound. I think is a decent sellers world looking for Pull back. I do think that the Bank of England are gonna Cut rates later than the euro so any pullbacks into a nice area of daily Resistance and supply is going to be quite nice You can see that levels being traded in the past as resistance there support there support resistance So the prices can pull back. I think that's gonna be very nice for a short trade again, this may change if expectations change for the The timing of interest rate cuts by either central bank But at the moment, I don't I can't see that happening for now So I think the pound should be the one the stronger out of the two And so that pretty much would lead me to want to look for short trades on the euro pound Aussie Dollar so Aussie dollar this week again We've got some decisions that need to be made by the Australian dollar. I think it's on Tuesday It's not balance of trade that must be a interest rate decision on the 6th of February on Tuesday night But this week we did have obviously some strong news and good news out for the dollar So technically this was really nice, but I just think that obviously things have taken a bit of a setback in terms of The US dollar strength if the RBA do come out and they are hawkish I think then this this demand zone should be Should kind of be more supportive and maybe see some maybe some upside who knows but I think maybe not against the dollar or if you do It'll be limited to the upside, but I think the Australian dollar would be a buy against several other currencies But let's see what happens with that the Australian dollar for me is a buy just not against the US dollar Not against a recent sentiment and the news that has happened and gold and so gold Decent level that you know prices came up to earlier in the week on the Thursdays So that would have been a nice because position yourself up into that supply zone and then look for some short trades before just after the news And that's obviously worked out a little bit Depending on you know where you actually got in and where your stop loss was now I do think that Gold is likely to continue to devalue at least in the short term as there's positive sentiment for the dollar and positive data So but overall in terms of the the interest rate cycle and you know where gold is on that I would expect gold to continue moving higher, but nothing moves in a straight line so this is just basically an overall pullback once the The Federal Reserve do actually start to Cut rates right because they will cut rates at some point this year This is an election cycle year So I'm expecting prices to maybe pull back a bit and then look to move to the upside and go higher But again, that's more medium medium term The next few months. So once the Federal Reserve start in their cutting cycle then Gold I think is a buy but in the short term It's going to be difficult to to really to try and buy gold against this a positive and Non-farm payroll data and inflation data at the moment So any pullbacks into these zones if you want to be a buyer of Gold I think a nice if you're looking for short trades Then then again a pullback into this area that white line there Indicates a level that is potentially looking to be potentially stop-hunted So if that does turn out to be a stop-hunt and you want to get short on gold Then that's really nice in that daily supply zone. So Yes, that brings me to the end of the video and also as well I've got some emails to I get back to my sincere apologies This week's been a very busy week and planning to get back to some of your questions and queries So I definitely will get back to you guys ASAP and so if you have sent me a an email With any questions or queries I will get back to you within the next day or two Anyways guys have a good one. I'll be a bless Sunday and speak to you When next video comes out take care all the best