 Hi, my name is Leon Roe, currency trader and trading coach at Trading180.com and welcome to this week's supply and demand for us and Gold Fundamental and Technical Analysis for the week starting the 7th of May, if you are new, a warm welcome to you and if you are turning an equally warm welcome to you. So let's get into the week ahead and on trading economics, zoom in and for the week ahead, 8th of May, which will be the Monday, the upcoming week in the US will be dominated by news related to prices, including the inflation rate, producer prices and export and import prices, as well as Michigan consumer confidence CPI gauge. Additionally, CPI figures are scheduled to be released in China and that's pretty much all you really want to look at. In the UK, the Q1 GDP growth data will be released and investors will be closely monitoring the Bank of England's interest rate decision. So elsewhere, China is to publish external trade data and Australia will report on consumer and business confidence. So slightly, I wouldn't say necessarily quiet because the US is definitely going to be keenly watched and there is the Bank of England, but when it comes to I think the rest of the world, Europe, Australia, Canada, nothing really of note to really kind of watch out for this week. So let's get into some of the technicals as well as some of the fundamental side of things and didn't have the right charm. Here we go. Let's just get rid of all that. Right. So looking at the US dollar index and the US dollar index is just a measure of strength against, you know, various currencies like the Euro, the yen and the pound. Right. And so for me, my bias is really determined by the fundamental side of things. And fundamentally, we did have actually some decent numbers on Fridays, a job strength, still high inflation cast out on bets. Fed will cut rates and US payroll rise, 253,000 crushing estimates, jobless rate falls to 3.4% hovering near historic lows and data defy feds rate hiking campaign, temper recession fears and two year Treasury or spike stock futures rise. And so the data behind, I guess, the job strength and the reason why the job strength was seen as a potential positive from the headline perspective was because the US is expected to go into a recession at some point. Some analysts are saying by the end of the year and some are saying next year. But if the US economy keeps providing jobs and jobs employment is rising and rising at a rapid pace, at least on the surface, then it kind of pushes the idea of a recession coming sooner into the long grass pretty much. And so that on the surface seems actually quite positive as well as unemployment going down, right? So the jobless rate fell as well to 3.4 hovering near historic lows. And so employment is up. Unemployment is down, which would be on the surface to a lot of, I guess, traders who do follow just numbers would be quite positive. But why is bond traders, why are bond traders bets on biggest shift in fed in decades on credit risks, right? Because there are some other things that are going on behind the scenes that although the jobs numbers look really good, in fact, they could actually start to become negative based off of the recent banking crisis and a potential credit crunch, right? And so the market is a lot more forward-thinking than most traders kind of anticipate. They look 3, 6, 9, 12 months into the future and try to, especially bond traders, they have to be, right? And try to forecast what is likely to happen. So frenzy wages on the July rate cut followed this week's hike and gauges that have been safely ignored for years get attention. So let's read into this. So fresh fears over recession-inducing credit crunch are spurring bond bulls to ramp up bets at the Federal Reserve will embark on the most abrupt policy shift in almost four decades. So you wouldn't necessarily get that from the numbers, right? You wouldn't get that from here. But again, there are risk events that are taking place, like for example, as we talk about the credit crunch, right? Just minutes after Wednesday's Federal Reserve interest rate hike, traders intensified their long-standing wages on imminent cuts as new turmoil in regional banks sent shivers across Wall Street at their most anxious markets priced in the policy about face as soon as July, I don't know whether that's going to happen in July, but that would be crazy if it did happen to be unprecedented. But in terms of the currency interest cycle, they said that the shortest time that central banks would have fed anyway have gone from hiking to cutting is about six months. So we know we're already in May. So to have rate cuts in July is just a bit of a crazy one. So U.S. unemployment data released Friday tempted that view. And next week's inflation reports are expected to show scant progress towards the Fed's 2% target. Yet key barometers of economic health, which traders have largely ignored for years are cause for concern. The Fed's quarterly senior loan officers survey is one. Excuse me. Others include a gauge of small business sentiment, apologies, and use of central bank emergency facilities. So while headline data suggests the U.S. business cycle is proving more resilient than expected, keeping inflation hot and pressuring bond yields to financial outlook may be darkening. Sorry, I'm trying to hold this coffee in my throat and my eyes are watering anyways. So yeah, so that's basically what's happening with the U.S., right? So the headline data is saying, yeah, yeah, excellent dollar, but the underlying future prospects of the dollar credit crunch is saying something else, right? And it will read this as well, which says if credit tightening trend continues, it's going to be difficult to sustain strong economic growth, yeah? Eventually lower rates are going to be needed, said Kathy Jones, fixed income strategist at Charles Schwab and coach. So how soon is the question? A rate cut just two months after our hike would be the first time since October 1987 when then chief Fed Allen Greenspan slashed borrowing costs in the aftermath of Black Monday. So again, there was a trigger there, right? In terms of it wasn't just the case of, you know, they had to kind of cut, it was the cut was induced due to a risk event. So that could happen now. So again, depending on how bad things get. So for me, am I looking to buy the dollar with all these fears going on? Not really. And also as well, this was from a research paper, where the US banks are suffering more than in the UK or Europe, right? So you've had the US are not doing too well in terms of their banks. So there's that going on in the background. And so where for me, anyway, my bias is still to the downside. So if you do, well, if I do get any pullbacks into these areas here, into these zones I'd marked out from last week, I think for me, it gives confidence to try and get short on any of the dollar crosses, not necessarily trying to short the dollar index. But I think these areas here within that supply zone are going to be decent shorting opportunities and with confidence. And so, yeah, the dollar yen moving on to the dollar yen. And again, I think for me, my bias is to the to the to the downside. And I put here fed one more hike expected. In fact, I think it's one it's no more think they're holding now. Right. So they're holding and inflation will really be the key test, whether the Fed will continue to hike or not. If if inflation stays sticky, then there could be, you know, some some fears that the Fed may, you know, have to hike one more time. But with the, you know, again, as you just gone over the credit crisis, the looming banking credit crisis could put an end to that anyways. And so with the Japanese yen, they are looking to actually potentially strengthen their currency and appreciate their currency with the removal of yield curve control. And also as well in the risk off environment, the yen should historically, you know, appreciate in a risk off environment as a safe haven currency. So for me, I think any pullbacks into these zones are going to be buying opportunities for the yen. Right. So that's where my biases. Obviously, last week, there was an opportunity to do that. And prices did, you know, go to the downside. But I think if prices pulled back and even just a bit higher right now to that 138 area, I think that's going to be a really nice zone to look for some some shorts, not looking to buy the dollar at any moment at them currently. So they've got a demand zone there as well. I've been in this chart from last week. And so yeah, prices have bounced back the demand zone. But I think the path of these resistance is to the downside. Dollar Swiss again, I think I have to just update these should have done this before called it the video. But one more hike expected for the Swiss National Bank and a hole from the Fed. Now, there was some inflation data that came out where for the Swiss Frank and the Swiss inflation actually come out lower than expected it dropped. And so you might actually see price start to come up again. It has come up to these areas, but even higher to maybe the 9050 areas before dropping again based off of risk of sentiment. So I do think that I think the underside of this area, if you do want to get short on this currency pair and buy the Swiss Frank is a decent area to look for any kind of short trades. I think from a long trade perspective, we still haven't really seen any strong demand at the moment. So right now, I think I wouldn't necessarily want to be a buyer with a dollar anyways. But if you did zoom in out, I don't know whether you would really want to look towards I guess a daily zone that had kind of happened back in 2021. Not really a fan of trading these types of these zones. Unless there's a proof of value meaning that it would really have to kind of bounce off of that level and prove that there's demand there for me to want to get involved in that. But again, fundamentally, I'm not looking to buy the dollar. So that's where really where I stand with that dollar CAD and the Canadian dollar actually had some really good news on Friday in terms of jobs as well. And so that's the reason why you saw, you know, you're seeing the Canadian dollar strengthen, but they are actually still looking to hold rates. There have been some rumblings of them looking to potentially high crates at some point. But I don't know whether that would actually have come to fruition. But as long as the room is there because ultimately it's by the rumor cell, the fact if the rumor starts to circulate and starts to get some traction, then that could be actually one of the main reasons why you're seeing Canadian dollar start to strengthen. But again, this is a pair where I wouldn't necessarily want to be a buyer of the dollar at all. And not really a buyer with a Canadian dollar, but technically there are some decent levels in and around here. And also as well, you've got some demand here and some demand down at these lows. This is now created actually some supply in this area. So maybe a pullback into this zone right here, if you wanted to be a buyer of the Canadian dollar, you would really start to look for a pullback into this zone here before looking at getting short. But either way, not looking to trade that fundamentally. New Zealand dollar, US dollar, I was talking about this last week, prices just didn't, or the week before prices just didn't come down as its own, but now we're proving that there's actually some decent demand in these areas. And so this now becomes a demand zone right here. Demand here. The RBNZ, the New Zealand central bank are actually expected to continue to high grades, I think one more time. So with the Fed looking to actually pause and the New Zealand Bank, RBNZ are looking to high grades, you could actually start to see again a pullback into any of these zones before looking at getting long. And with China as well, hopefully growing as well, although they've kind of had a bit of a recent data didn't come out too positive. That could also support the New Zealand dollar in terms of a New Zealand dollar buy. So any pullbacks into this area here, the 0.618, I think is technically is a decent buy. Start to look for buys, but I think the overall bargain never would be around these 0.607 areas. Moving towards the pound dollar and the pound dollar, it's just gone from strength to strength. Again, had a long bias on this. And you know, we do have a supply zone from way back in May 2022 in the next supply zone. If you are looking to get short, it's going to be all the way from April 2022. So all this area looks like supply as well. But my bias is to the upside on this pair waiting for really a decent pullback, I think into the 1-2-4s should be nice and even better would be the 1-2-3-60s. But the pound at the moment, let's go to here. The UK economists see one more rate hike from Bank of England. And so Bloomberg survey shows peak at 4.5% less than markets expected, coincidentally expected to continue at current pace and also as well. Yeah, so the economists are thinking that the rate is going to basically the Bank of England will do a one and done. But the market is actually expecting a lot more rate hikes, you know, 4.75 to 5%. And so interesting to see basically who's going to be right, whether the economists or the market is right. And so with high inflation, and if inflation doesn't start to come back down to at least single digits, then, you know, probably likely you will get more hikes as well. And as long as the economy can support the rate hikes as well. So for now with the, again, the Federal Reserve looking to pause rates and the Bank of England looking to, you know, continue to hike rates. At the moment, I think any pullbacks are going to be nice buying opportunities. When it comes to the pound dollar, in fact, reached the 1-2-6s now, there's projections for the pound dollar to actually reach 1-30s. And so that's going to be interesting. So waiting for a pullback for me to look for a buying opportunity to get along on this currency pair. Moving on to the euro dollar and the euro dollar. Again, interesting this week, you had the Fed and the ECB, you know, released their statements and the ECB officials get behind Lagarde's pledge of more rate hikes. So policymakers delivered quarter point increase on Thursday. Lagarde has flagged at least two more moves in the pipeline. So again, while one central bank is, I say, one that the Federal Reserve are looking to pause, obviously, and the ECB are continuing to, you know, hike rates. So I think any pullbacks on this currency pair into certain zones are going to be nice. And yeah, it doesn't look great technically. Technically, it doesn't look nice. But when you get, you know, quite wide zones of demand, the best thing to do is to actually just go down into a lower time frame and see if you can get a bit more detail. So for me, from looking at, you know, levels, I would probably look towards this area here. It's like a decent area of support and resistance within that daily demand zone. This is just one of the ways that you can, you know, add a bit more confidence. And so, yeah, I think coming down to this, maybe the 109s, I think it's going to be nice. You can see where the 108, yeah, 108 round number is going to be decent as well. So first area, I think you've got a decent level of, let me zoom out a little bit. Yeah, you can see that this zone as well has been used, the 108 Free Fire has been used to support and resistance in the past as well. So within those zones, I think these are the three areas that I would look towards taking some sort of long trade, ignoring pretty much everything else. And so, yeah, the path of these resistance actually is to the upside. The future projections and forecasts are again, I say again, but they're up to the 115s. And so we could see if by the end of the year, and so there's still a lot about 500 pips to the upside, if all the fundamentals actually play out as expected, right, because things do change and no one's got a crystal ball. But if they do play out, then I think any, you know, buy trading around these zones are going to be decent for a long trade. The Australian dollar, US dollar, going back to the the daily timeframe chart, I do think that the Australian dollar is a buy, at least for the short term. Reason being is because this week, there was a surprise hike from the RBA, Australia was further tightening after unexpected rate hike. So Lo says, board reached strong consensus on today's increase RBA, deadly serious about bringing down inflation Lo says. So in order to bring down inflation, you've got to basically keep hiking, right? So it's going to be important to watch what inflation does in Australia, because ultimately that will determine whether the the amount of hikes that the RBA will do. So with that being said, I think any pullbacks, so any pullbacks into a, any demand zones, pullback into here, and even get even a lower area, the 65 is going to be really nice. Also as well, what the Australian dollar has gone for it is the China reopening as well, which should support the Australian dollar, providing China's reopening goes well. Yeah, so I think the Australian dollar is a buy as the Fed, you know, actually hold, right? And in fact, the RBA are looking to hike, and it is data dependent. And it is data dependent as well. Also as well, just turn back to the, to the euro dollar, just do hold as well. And two, three more hikes, I think two hikes are probably expected on the euro as well. So here we are. So for me, this is one of the pairs I've added to my, to my list as well of biases that I will try to look for long trades on. And finally, gold and gold. Again, we're, you know, for context, we are highs did break, I think the all-time high, the two seven, two eighties, two seventies fours, yeah, 2074s. And so for me, gold is still a buy waiting for a decent pullback. Also as well, you have a lot of confluence with gold, not only with the dollar decline expected, you know, in 2023 towards the second half. But in April, you had China expands gold reserves essential banks for the fifth month. So holdings of people's bank rise to more than 200, so 2000 tons. And precious metal hits the highest in more than a year this week. And that was in April. And now, a month later, we have China's gold splurge reaches sixth month as reserves rise against China added to its gold reserves for a six month extending the flurry of purchases as central banks around the world expand their holdings of bullion amid escalating geopolitical and economic risks, right, economic risks. And so it's not just China, it's central banks around the globe. And so with the risks, you know, they may or may not materialize right, but you got to prepare for the worst. And so in preparation, central banks are not looking to just buy today, and then sell tomorrow, they're going to buy today and hold right for a long time until they think the post is clear. And so, yeah, I think any price pullbacks, especially to this 1942 area, I think is going to be a decent area to buy gold, again, not financial advice, telling you to buy anything. But this is what I'm looking to do. So, yeah, if you do want to look to sell gold, of course, you know, there could be some profit taking up here. That makes all the sense in the world. If you've, you know, bought down here or bought around here, then why not take profit at levels that are highest, right? Plus as well, you know, is there a lot of liquidity here in terms of our traders really, who's buying here, right, in terms of, you know, who's selling here. So, you know, if there's not enough sell orders to facilitate buying, yeah, then the market has to look for liquidity underneath the market, right? So, if I'm a trader and I'm buying here, then my stop is clearly a sell order. So there's also liquidity below the market as, you know, the liquidity gets built behind swings. And so it makes sense for prices to pull back a little bit, a little bit of profit taking. But if you can get a deeper pullback, I think that's going to represent decent value, because if the central banks are buying, then, you know, who am I to go against that? So, yeah, that's pretty much it for this week. Yes, was there anything else? Okay, yeah, I'll show you the fundamental analysis spreadsheet and the pairs. I guess that I'm interested in. This is typically reserved for the guys that are in the mentoring group, but I just shared this anyway. So on a weekly basis, I actually, it's more in a bi-weekly, I'll say, twice a week. Well, we pretty much put out videos. We have a group call on a Wednesday, a live group call, zoom call. And I go over this and my fundamental bias and then I do a weekend private mentoring video for the guys in there, which goes into a lot more detail, a lot more fundamentals. What you're getting on YouTube is actually, you know, quite the basic stuff, you know, I mean, so, yeah, this is basically what I showed the guys as well as this is from our economic data tab. The, which basically shows our, you know, base currency, close current currency rankings. And my bias is basically going to be here on each of the pairs and I explain exactly why. So got long, short and watch list and neutral meaning. I'm not looking to take those trades. So you can have a quick look obviously and see what I'm long and short on. Again, it's not financial advice, but just to let you, you know, see that we actually do have biases on other pairs that we do and trade our pairs that we present in this YouTube video. So anyways, guys, take care, have a great trading week. Monday is a bank holiday in the UK, so it's likely to be a bit subdued. Of course, we never know with the market with light liquidity, that could actually be a bit more volatile. But the main trading starts probably back on Tuesday. And so, yeah, just be careful out there for trading on the Monday, because there might be some moves due to like liquidity and a lot more liquidity hunting. So yeah, let's see what happens. But anyways, guys, have a great trading week. Enjoy your bank holiday in the UK. And I'll speak to you all next week or until the next video.