 Hi, my name is Leon Rowe currency trader and trading coach at trading 180.com and welcome to this week's supply and demand fundamental and technical Forex and gold Analysis if you're new a very warm welcome to you and if you're returning an equally warm welcome to you and if you do like the Analysis that I provide every single week in the market wrap up Please don't forget to like subscribe and share liking is a free way and subscribing is a free way to Support the channel and it really helps the YouTube algorithm and gets the quality content If you think it's quality content, of course out there and more traders seeing it And thank you to all of the traders that are commenting and leaving some really nice comments and my videos and and you're very very welcome glad it is the Free content is is helping you to become better traders and make better trading decisions. So Getting into really this week's Analysis as far as the fundamentals and the technicals because that's how we really make the best decisions in trading technical Analysis alone for me and for many other traders is really not enough the banks trade fundamental analysis so why shouldn't we trade fundamental analysis, right and we're going to get into really the main pairs which starting off is going to be the doubt Jones dollar index the DXY and You know from a technical analysis perspective Prices did kind of come through and go through this this demand zone and I must you know Stress to you guys that not every single demand zone is going to work the market determines where demand You know is right. So the market has now seen after about a month really of I would say very unusual very unusual sell-off Especially in the face of really positive data when it comes to the US economy We haven't had really any kind of pullbacks or anything like that It's literally been like a hot knife through butter But there's been some overall, you know negative sentiment I wouldn't actually really call it negative sentiment, but just a weakening sentiment of the dollar in even the face of positive news and positive data and So the market would always decide as to when there is going to be demand for the dollar when the dollar is cheap Right and and really more of a bargain price because that's what Supply and demand is all about so at the moment. We've got a demand now new demand being created right here Yeah, you've also got some supply right there as well. So Let's see Yeah, let's see if you know prices will rain from here or if really the dollar is seen as an absolute bargain down at these Down at this price on the dollar index and if it is seen as a an absolute bargain down here Then this supply zone really shouldn't hold these supplies and shouldn't really hold so the dollar was seen as it expensive up here Right was it seen as expensive Yeah, and it's now actually seen potentially as a potential bargain right here. So let's see but fundamentally You know, we had the the policy statement, I guess from the Federal Reserve and it says today but it was a 28th that was on the Wednesday and They they have a brilliant up beat assessment on the outlook You know, hence the first steps of a path towards tapering QE purchases We believe that this would be announced before the end of the year and suspect Interest rates will rise much sooner than the Fed's current 2024 guidance suggests. So really now the Narrative is now shifting to rate hikes during the coronavirus and last year in 2020 throughout 2020 You had central banks literally cutting and quantitative easing, you know Who there is right printing money? devaluing their currency To help stimulate the economy now the economy is actually on the recovery phase of the economic cycle What you're seeing now is central banks and inflation rising the central banks are now looking to potentially start to Taper quantitative easing so reduce the amount of money that they're printing which is usually positive for a currency as Well as potential looking at rate hikes because now inflation is starting to work their way into the system right now the dollar as much as As much as we've had really positive news, you know The really the quote here is the FX market is more interested in signals as to when monetary accommodation or quantitative easing You know bond purchase buying etc Will be withdrawn and those remain lacking. That was what really that the market was looking towards is when will the Federal Reserve Reduce their quantitative easing and the Bank of Canada did it last last week And there are central banks that are looking to do it As well and we'll get into some of the banks that are going to potentially reduce tapering So now it's really about the I guess the race. I wouldn't even really call it a race It's more about the market is more fixed on who is now Tapering first of all and when are the first rate hikes likely the first bank who is likely to Increase interest rates is really going to be the one to buy So that's something you have to look forward to or look out for if you're a fundamental trade if a technical analysis Trade you don't you don't really care about these things even though you should because this is what drives prices in the medium to long term so the the dollar right is is Was setting off and again dollar rises most in two months on short covering data rebounds So it's just basically just talking about the the the dollar index You know rising it's been really just like a really a whole month of selling of the dollar Which is again is unusual in the face of Positive data, but let's see what happens the dollar has to establish some sort of value and this may be it Right it needs to establish some sort of range. So this was expensive This may be seen as a potential bargain, right for the dollar considering Right the dollar isn't going to be weak against every single currency, right? You know, there's other currencies that are weaker than or potentially going to depreciate against the dollar so dollars in In good standing when it comes to their economy. So let's see what happens It's really monetary policy. That's driving the price or potential future monetary policy That's driving the price of the of the dollar as well as other currencies So let's see what happens But if you want to be a buyer of the dollar pretty much now, you know Is the time if you want to continue selling the dollar it's looking for you know Sell trades on other dollar pairs like for example the dollar yen dollar Swiss looking for supplies on there And then if the dollar index starts to set off then Then that's pretty much your your confidence because the dollar index is just a measure of strength overall dollar strength against a basket of currencies Moving on to the dollar yen and the dollar yen again with dollar strength coming in The yen for me is one of the weaker out of the two currencies again last week we kind of went over the The one of the reasons why which was That Japan was potentially entering into a double dick dip recession or it was looming anyway with new virus emergency, so the dollar Having some really good news as though a little dollar was setting off You know pretty much the whole month from like, you know the beginning of April literally again It's just literally been just sells and sells until really the end of the month Or towards the end of the month what we've seen now is some Dollar strength against the yen and then a risk off in but also in a risk on environment The dollar really should be the one that their strengthens But what we've just seen over with you look at where we are is just a deeper pullback right if we take the low of This move to the high. Yeah, we've really just pulled back to what is known as fair value So let me just bring that up All right, so This has been fair value again. This is seen as a bargain area. Why is that because prices went higher, right? There was this is seen as an absolute cheaper bargain area This is seen as an expensive area because prices couldn't go higher than that So now we've just come back into what's known as fair value between the bargain and the expensive area So now we're just seeing This play out and I do think price has you know some more upside now We don't know, you know if price is gonna get there like this Or if this price is gonna pull back to the zone or even prices gonna pull back to this zone But the point is is that if you want to be a buyer of the dollar All you're looking for really is is buy trades and being a bit patient to see You know where the opportunities to buy are if you're looking for any kind of sell trades And you think the Japanese yen strength and against the the dollar for any reason then this is gonna be a really nice Technical zone, but technicals really don't you know, not the reasons why prices will move There is also a really nice nice nice confluence here technically Where you've got bit of support and resistance there right so Yeah, we've got a bit of Resistances there bit of support there So right now could be a decent area to look for potential short trades if you want to get short on the dollar Dollar Swiss dollar Swiss has again been selling off just like the Dollar index, but I do think now is a really good time potentially to buy there wasn't There were there wasn't any daily supply and demand setups, but there there has been a an intraday setup On this on this currency pair Potentially, so let's see what happens with that for the members in the private group But we do have a bit of supply resistance just above that area there. Let's change that to supply Yeah, now is this strong demand yet? No, because you really want to see prices make higher highs and higher lows and kind of go through that area of supply And then if you want to get long if you get a pullback, that's what you're looking for For a buy trade, but the market has to prove that this is a bargain The dollar is a bargain right here against the Swiss Frank so at the moment not quite even though I do think overall it really is and And again if we're looking at for example the low to the high so we're looking at the year lows to the year high Yeah, we've literally pulled back to fair value so fair value really nice area to look for long trades If you can see if you get a setup, but just didn't come down into this daily demand zone So no long trades when it came to the daily demand zone, but there was potential setup on For for other other setups that we do use so for me Dollar long against the Swiss Frank all the way so this is an absolute bargain look at the risk reward potential now That's the low look at the upside potential. I think that is a that is really nice And let's see what happens with that But if you do you disagree and you want to go with the downside Then it's going to be a first sound to get short second zone to get short and especially with some potential Support and resistance as well that adds some confluence to that zone right there dollar CAD and the dollar CAD Really has been a The CAD this I guess last week Basically they introduced tapering they tapered and so you're seeing really the effects of tapering where is the Federal Reserve Yeah, have not tapered right they saying that they're not really looking to taper so You're getting really a bit of a divergence with the CAD yeah tapering so that should be positive with the Fed Yeah Are not so you're seeing the CAD start to sell off Right, so this is literally how you know you trade fundamental analysis or one of the criteria We look for right, but what that funnest is now that's created some supply zones This so if you do want to continue getting short on the dollar CAD not necessarily a pair I'm really interested in to be fair there are easier trades out there There is your first area to look for short trades here with your first or second area to get you know Short on this currency pair and I think actually that zone is actually quite decent as well just from a support and resistance perspective right there That whole area you got support resistance there support support so up there around that one to five Zone is is decent for a potential short trade if you believe the Canadian dollar is going to continue to get stronger against the US dollar Moving on to the New Zealand dollar US dollar and With dollar strength again potentially coming in All right, we've actually just peaked above that supply zone Prices have started making their way to the downside In this area here if you do want to get long on the New Zealand dollar Then this is a really nice zone to look for potential long trades personally again I'm not really interested in this currency pair to pretty decent currencies competing against each other there They're kind of hard It's a harder trade to really kind of determine where the longer term trend will be even though I think the New Zealand dollar should want to strengthen against the US dollar, but let's see if that happens that level doesn't work out Then this is going to be seen as the next bargain area down here If you do want to get short then you're looking for you missed out on that opportunity Then that's really the area or even better this area right here, which I do like technically Moving on to the pound dollar and the pound dollar Prices have been really in a bit of a range. So we've got the high to low right here Yeah, so you've seen prices really This is an expensive area For the pound and this is seen as a bit of a bargain area for the pound and again prices came up to fair value selling off a little bit and The pound though has is is really kind of seen as a potential Buy as well. They're Barclays CEO see strongest UK growth since at least 1948 so tremendous pent up demand set to fuel 6.5 percent Expansion in 2021 rebound follows deepest economic slump in three centuries So some of the smartest guys in the room are talking about there's potentially You know strong Demand for the British pound now will that play out against for example? Currency like the US dollar who also is you know on the up and up with their you know with their economy Again, there's a this is a harder trade, right? You really want to look for you know economies that aren't doing so well or really kind of lagging behind In a sense before you you know, you really kind of Decide what pairs to trade. It's really strength versus weakness So at the moment if I was gonna be a buyer, right? I would really kind of look for this deeper zone before Looking for long trades if I was looking to be a seller. I really want to look for extremes Right, I'm looking for extreme highs and potential, you know lows right before looking at getting Long or short trading a fair value and less, you know, you're looking to get short here is brilliant But if you're looking to buy here, it's not really the best area to look for buy trades, but I think the pound dollar is not where again not really a pair that I'm, you know Particularly interested in simply just because there were easier trades out there Moving on to the euro dollar euro dollar finally, it's rolled over, right? We've had this whole month and this has literally been correlated to the dollar index. We've had the whole month pretty much No pullback again very very unusual When it comes to a trade because you at least get some pullback, right? Whenever you can even a downtrend you're getting pullbacks downtrend you're getting pullbacks Yeah, you get pullbacks of you know, maybe a couple of hundred pips pullbacks on this I've literally been Non-existent, so if you consider that a pullback, that's like 40 50 pips. Yeah, so if you're trying to get sure From a high to the low you only really had like 60 pips of movement 60 pips there 50 pips there I think this is probably the deeper pullback or the deepest pullback the month, which is 86 pips You've got, you know 60 pips here and then finally you've now got 130 pips So if you were getting short finally you've had enough, you know price movement to the downside To potentially, you know make some money whereas, you know If you were looking at for example trading the opposite way Yeah on the the dollar let's say for example you're looking to buy the dollar look at the pullbacks You've had at least 136 pips here. You've had at least, you know 217 You've had another 219 You know 154 pips you've had, you know pullbacks even if you were trading against the trend You know Opportunities to make money whereas if you were trading short in this you wouldn't really have had that much opportunity Unfortunately for the month of April if you would try if you're buying the dollar and selling the euro now the euro has been a bit of a Bit of a strange one simply because they are lagging behind but the expectation For the euro is for the euro to Start to catch up, right? It's a lagging you know the The I guess With the euro lagging behind its future expectation of growth. Yeah, so Let's have a look at the fundamentals. So basically eurozone vaccine delays mean double-dip recession as US boom so what happened recently was the The the eurozone did go into a technical recession, which is two negative Quarters of growth, but the market actually is looking past looking past that Because what they're looking at is to say and at Western Europe's vaccine records raise hopes and of the worst that the worst is over So Germany and Italy report all-time highs in daily inoculations and the EU vaccine supplies are due to quadruple in the second quarter so The the market really was a bit bit forward thinking maybe getting ahead of itself and thinking that the euro was supposed to strengthen you know in April when it really didn't because of the vaccine rollout and again Just a bit of commentary eurozone in recession more reaction and it says although Europe has lagged behind this year economists, but Collagen of IMG is confident it will start to recover in the current quarter So what does that all mean? What that means is that the the euro if the The economy does start to recover then we should see a higher Euro even in the face of the dollar You know being quite strong what is happening and what the banks are really pricing in is a higher Euro dollar or some of the banks anyway, not everyone is obviously doing that But there's some prominent banks like Goldman Sachs for example that are saying that you know within the next two to three months You should see at least a one two four one two five Euro dollar exchange rate, but that is again dependent upon The euro really getting its act into gear, but let's see what happens if you are Going long then your first area to go long by the euro is going to be here as we've seen I'm going to delete this supply zone. I'm going to draw the supply zone probably around here It's not necessarily the strongest area of supply, but it is there And if you want to be you know again long dollar and short euro then that's what you're looking for So any kind of buy trades right now potentially to the upside if you're looking to buy the euro And if that area doesn't work and you're looking for that area there that area there I think there should be probably a deeper pullback again if we're looking at Understanding where value is at the moment. So this is probably expensive for the euro at the moment This is definitely seen as a bargain for the euro I think price could probably come down to this 1.19 fair value area or maybe even just below that zone there Bit of a pullback has you know the longer prices go higher without pulling back The the deeper the pullback will be so I think in fact maybe the 1.19 area if you are short here may be a decent target And if you're looking to buy the euro, I do think the 1.19 area is quite nice for a potential buy You've also got some of some confluence in there as well with regards to Some support and resistance so it is an area that has been traded in the past So decent I think that area really is decent for a potential profit-taking as well as As well as just buying a potential You know below fair value if you're looking to buy the euro versus the dollar Euro yen and last week I did say I was looking to buy this currency pair I was really waiting for a bit of a stop-hunt below this level and maybe a bit of a Prices to come down into this demand zone I really want prices to come down deeper into that but as we saw this week It just flew off right flew away So there's definitely no supply here The reason why I was long euro yen is because I've been saying this to the you guys in the private group for past couple of weeks is because with the expectation that Europe should get its act together soon and start to Grow with the with the Japanese yen again lagging behind being the worst worst of the two I think now any kind of demand zones any long trades is going to be you know buying opportunities So we didn't quite get didn't quite get any kind of set up to the downside where we could have been buying The euro for a bit cheaper prices have obviously gone to the upside But if prices do manage to make their way down due to some maybe short-term negative euro sentiment Then I think this 130 area is Is a really nice area because if you think about recent price action This is seen as now an absolute bargain right because prices went higher lots of traders buying in this zone This is now seen as potentially expensive not too sure yet But if prices start to come back down into this area That's the first bargain area that we want to look for by trades and this is what supply and demand is all about Forget this rally based drop drop base rally because it doesn't really tell you anything about you know value and understanding where bargains are Yeah It's understanding where the bargain is on a daily time frame charts Yeah, I'm looking for where that the big money are looking to trade So I think a move back down to this 130 area. I think it's going to be brilliant if you do want to get short I'm not really too keen on shorts From areas that you know were produced two years ago Unless it was really I was really kind of fundamentally Short on that but even then I really want to see proof of value before looking at getting long So I'm not going to draw any kind of supply zones there I do think you know we're in a buying opportunity when it comes to you know the euro And especially when we need to see the data support the narrative as well Australian dollar US dollar so again To really kind of competing currencies and when you get to competing currencies of of you know Equal strength in a sense you will get what ranging markets, right? You get this choppy market because nothing but good news for the for the for the US dollar But also as well the Australian dollar does have a lot of strength and Good macroeconomic data. So let's see what happens in the short term again If you want to get short on this really this was the area to look for short trades I was saying from last week if you were looking for buy trades I think I think a pullback to that 75 would be a really nice so I'm trying to think to myself Yeah, I think that's probably the area or if you do want to get you know long here because we were reading a report earlier This week or was it yesterday? I think it was yesterday I had a private mentoring session with the guys and there are some banks There was a bank that that thinks that in fact we are potentially in the undervalued Price zone when it comes to the Aussie dollar So we could see price just kind of maybe pullback and it from a shallow perspective and Then continue up to the 80 cent level. This is seen as actually a really nice Target for some some financial institutions, but again, it's a more of a harder trade because the dollar and the US dollar and the Australian dollar are Competing in a sense that there's they're not diverging But again, those are your options if you do want to get long short I do think that this area for a short trade Technically is really really nice also, but again depends on the fundamentals Aussie yen Again, I've been saying it's pretty much for Months and months now ever since last year. I think with last year no October November around here saying to the guys in the group Go long risk on currencies commodity currencies Yeah, and go short on risk of currencies Yeah, so you've pretty much seen what's been happening and again, it's just understanding where we should be buying Right, so buying at demand zones Demand zone prices came down prices go up and prices don't go up forever, right? They're gonna have weeks potentially days or weeks of pullbacks and even months of pullbacks, right? But the point being is that if you're looking at the bigger picture you understand where the bargain is Yeah, that's all we're looking to do is understanding where the bargains are so For me any pullbacks into Areas of demand Are buying opportunities? This may not be so much because it's touched once twice I'd rather wait for a level that's been touched. Maybe that hasn't been touched or maybe touched once So I think a deeper pullback to eighty two fifties I think a really nice buying opportunities in anything below that would be even better for me as a For a long trade But who knows where we can get down there If not if prices make higher highs and maybe break through that supply zone then I'm looking for pullback into that demand zone If there is a shift in sentiment for example There is or or any kind of economic news around the Australian dollar because this is seen as quite an expensive area Or could be seen as quite an expensive area from the central banks and banks central banks Actually don't want an expensive currency. They want a cheaper currency or devalued currency Then we could see some pullback, but again pullbacks are just opportunities to buy a Currency that you want to buy for cheaper, right? That's how it should be looked or viewed and Finally looking at the gold and gold Again, it's probably benefited from some dollar weakness this month pretty much it has But the question is why is gold going to go higher or why should go go lower again gold is driven by the more of its safe haven Status and at the moment we're seeing a lot of risk on you know in the market lots of global growth Central bank hikes for example the one thing that gold has got going for it is potential You know rising inflation so inflation meaning devaluation of a currency So if inflation does get out of hand, yeah, then gold potentially would be you know a potential buy as well But at the moment, it's a bit of a difficult read for gold and looking at where gold may go in In the short term even the medium to long term. We will have our views on inflation, but it depends on whether You know that is going to play out last year. For example, it was very clear Right from last year where the corona virus You know started in in March in February March and when the central bank was really kind of cutting Interest rates and introducing quantitative easing that was an easy trade right made some money on silver. I Think I did about 55 60 to one type trade on silver last year took some profit To all my profit matter of fact this year in February February and beginning of March, but now when we've had now the the dollar start to You know strengthen Global reflation and things are looking a lot better gold I think may is more of a difficult trade to read in you know to try and find out where it may want to go In the medium to long term so For me, it's not really something I'm looking at But if you do look at gold and you want to look for Trade somewhere I probably say somewhere around the lows or any of these demand zones Keep keep an eye as well on Inflation and risk off sentiment safe haven Status as well stood the stock market the stock market starts to sell off And when I say sell off I'm talking about maybe one or two days of About you know bearish candles or even a week You need to see the narrative the narrative has to be there Why is the stock market selling off if there are fears and Money's moving out of the stock market and into gold bonds Then fine, that's the time to really buy safe haven assets But if stock start to sell off it could just be profit-taking right you don't know just because Money's moving out of stocks and this profit-taking doesn't mean it's moving into gold and moving into government treasury bonds Does it just means that you know, they might be moving into cash for example, so So gold for me is a bit of a tricky one Technically there are some nice zones, but doesn't mean you should trade the asset class if it's not clear You really want You know to take the easier trades and when I say easy trades you want to take the easier trades fundamentally and The easier trades at the moment are really kind of buying commodity currencies Versus you know safe haven currencies like the Swiss franc and the Japanese yen anyways guys That's pretty much it for this week Until the next video. I hope you have a great trading week and take care