 Hi and welcome to this week's supply and demand for its and gold fundamental and technical analysis for the week starting at the fifth of November. I hope you all had a great trading week last week and Let's get into the the fundamentals for the week ahead and then some technicals So the RBA Reserve Bank of Australia is the next G10 central bank to provide a policy update in the week ahead Australian economists and the Australian rate market participants are both expecting the RBA to deliver another 0.25 basis point hike which lifts the policy rate to 4.35% so that should be positive and I say positive, but I should appreciate the currency if they do But there's always a risk that they may not so If they don't hike rates, I think it's on Tuesday Announced that they are hiking rates, then I think the Australian dollars likely to sell off quite dramatically So let's see what happens then so it's definitely some market moving news If you are trading the Australian dollar market participants will also pay close attention to comments from the Fed and the Bank of England officials in the week ahead including chair Powell and Governor Bailey to better understand The updated policy guidance from this week's central bank meetings and we'll get into a little bit on the data That came out this this week for both central banks in terms of Data jobs data as well as the Bank of England holding races this or last week So the release of the UK GDP report for Q3 is expected to reveal flat to slightly negative growth So again, there's a I think there's an opportunity to potentially short the pound if data does come out as negative growth The main economic data released from Japan will be the latest labor cash earnings report for September At the last BoJ policy meeting governor Ueda reiterated that More evidence of stronger wage growth remains the missing ingredient before they are confident to begin policy Normalization and this is from MUFG and for those of you who get those bank reports that we post in the discord group I have also updated the trading of videos channel With the latest weekly Fundamental and technical analysis That goes into way more detail about the fundamentals and technicals and I do release on the on the YouTube Channel as well as previous weekly the week's videos So I've got the group call which is about an hour and 32 minutes hour and a half on the 2nd of November Plus some some videos from the 30th and the 31st of October so you can go to the training channels training videos channel I've got some videos in there as well as you know previous weeks videos Which I've got plenty of as well loads and loads and loads of previous videos So you can go back and look at all of the tutorials everything that I've got in here So starting off on the dollar index and the technicals and the dollar sold off this week Not because there was some sort of alien wave Predicting that it would or anything like that no indicator. It was really due to the fundamentals, which is The US jobs data show broad cooling after run of surprise strength. So October's payroll Rows 150,000 led by healthcare government and unemployment rate unexpectedly climbed to almost two-year high. So US jobs US job growth slowed by more than expected and the unemployment rate rose to an Almost two-year high of 3.9% indicating that employers is strong demand for workers is beginning to cool. So That's really the the main Take away from this is that there are now Cracks starting to show in you know, the labor market, which is like a canary in a coal mine almost for the for the US economy so Here we see that US jobs a data point of law calling in the labor market. So Changing payrolls came below the 180,000 so jobs came in lower and we also have unemployment rate actually came in higher. So You know with that being said The US yields bond treasury bonds traders who are, you know, probably the smartest the most sensitive to central bank monetary policy Have now move up rate cut bets for the For the US dollar and I want to talk more about this once we get to the UK and Europe and basically what it means in a narrative that will now develop. So for many of you who've been watching my videos for a while The narrative has really been about who's going to be hiking, you know The longest and fastest, etc. Right now the narrative is going to be changing to Who's going to be cutting first because of the not only the economic cycle, but also the interest rate cycle as well So bun bun traders Are are literally now starting to price in Rate cuts. So it says here one second. Where was it now? Had it here somewhere It says here the employment. Yep Softened and expected jobs data is the latest source of support for bond investors this week after relentless set off in Recent months sent treasure reels at the highest in more than a decade turn around started on Wednesday when the Treasury said it was slowing the pace of increases in sales of long-distance bonds and as Fed chair Jerome Powell hinted the tightening cycle may be over and it said the bond ready came after a number of prominent investors including Stan drunken Miller Bill Ackman and Bill Gross sounded alarm about the economy So the economy shrinking and it said here. Where is it now? I did have it right here It is interest rate derivatives show that traders see only 20% chance of another Fed rate hike by January and to fully priced in a cut by June Before the job report traders had expected the first interest rate cut in July Interest rate swaps tied to the December 2020 for me in traded about 4.4 percent Etc. Etc. So You can pretty much see that being priced into July 2020 for me And so the Fed watch tool if you go to the top you can see that basically in June There are there's an 85% chance of a cut currently And in May it looks like, you know, 64% chance in March so you can see as we get further out to the year rate cuts are being priced into the market or the probability is being Is increasing now? So so with that being said the dollar I think overall technically has had its run I think going past the 107s on the DXY is probably Very unlikely unless they get a massive turnaround in the data So we've I've say I'll say into the group that I was expecting a really a pullback anyway But didn't think that it would be a drastic pullback But I do think that prices could come down to anywhere around the 104s to the 103 area before looking to before the market actually prices in those rape cuts But the dollar I think has had its day in terms of you know more upside And the continuation of the trend this price as you can see has been you know really rallying with no major pullback And when you get those types of rallies since since mid-July It's inevitable that it will get a deeper pullback to some degree just a matter of really when but looking at the overall GDP growth rate the US is still really actually quite strong their data came out recently which was the October the 26th, and we had a 4.9 reading which was actually above the consensus. So the consensus was actually for 4.3% increase in GDP but it came out 4.9. So would that be instead? I think the US although, you know the focus typically tends to be on the US in terms of You know this this supposed economic crash that's supposed to be coming They're probably best placed and we're gonna look at Europe and in the UK a bit later So in comparison so for me the dollar in the short term is I can understand why you would want to short it I think I think once the dust does start to settle I'll still start to look to be a buyer of the the dollar although I definitely can see why you'd want to get short In the short in the short term so looking at where we are now in terms of supply you can look at that zone there In terms of supply and you're not necessarily trading the dollar index Just looking at where where the dollar where dollar is in comparison to other Currencies and if you do want to be a seller of the dollar and your you know and prices are up in this supply zone then That makes sense to China To look for any kind of short trades on any of the dollar crosses. So or you know vice versa in terms of buy trades Looking at the dollar yen and obviously with the dollar looking to weaken at least in the short term You can see the effect that it's having On the dollar yen and dollar crosses periods so any pullbacks into these areas if you're still looking to be a buyer of the dollar right is Kind of buying opportunities So you're down to maybe the one four sevens and even I think about you can actually drag this demand zone down to the 106 is in these areas that you can look towards Support and resistance within this wide area of of demand that you may want to look towards buying in Terms of a sell trade Now we can start so because this was really kind of drawn from way back here and I'm going to probably Do it from there. Yeah, so everything any pullbacks especially beyond I think this level here anything beyond the 150 77's I think if prices come up here anything above there is a decent short if you are looking to obviously buy the the yen and Sell the dollar. Why would the yen be a buy really because you're waiting for Monetary policy to change with the yen. They really next year should probably be the only central bank that is looking to Potentially high crates and reduce their negative Interest rates so whereas everyone else is like is looking like they are going to cut rates next year So in fact my trade for 20 24 The big idea or one of my big ideas is actually to look to buy the yen and look to scale into the yen At least from next year when it starts to look like wage inflation Right is rising if it does as soon as it starts to rise That will be the trigger for really the Bank of Japan to look to change a monetary policy at the moment It's not looking fantastic. So until that really starts to come into play I think the the yen is going to be a very very nice short looking at the dollar CAD the the Canadian news was actually overshadowed this week the the Bank as to say the Canadian dollar and Canadian economy Posted me good jobs gains and unemployment climbed to 5.7 percent. So the their economy added one sorry 17,500 jobs missing expectations for 25,000 job gain and the Bank of Montreal sees McLean very much sideline till 2024 So again, not great in the jobs department and the economic department for the The Canadian dollar and if you look at Canada's Growth rate. They're actually at zero. They're on that borderline to a potential contraction. So again, you start to compare The Canadian dollar and then you look at the United States and where they are. Yes in the short time You might think to yourself. Well, yeah short of dollar, but really who's closer to a recession and the recession is technical recession is Two negative quarters, right? So two negative growth quarters. So The United States will still have a long way to go before they're actually in a recession. So Where whereas obviously the Canadian economy is a lot closer to a recession. So Yeah, I think for me out of the two I would still prefer to buy the the sorry US dollar and So, yeah, but no one knows where the turning point will be right But you can look that this is maybe just an opportunity to buy the US dollar for Cheapest so any of these demand zones, I think a decent you can look for supply zones if you filled out prices Up here a decent shorting opportunities and it might be a change in fundamental fortunes for the Canadian economy And the central bank then I think the 101 3 8's are a decent area to look for some short rates the New Zealand dollar again rallying Blasting through this this supply zone, which again was on the Friday that was a jobs report Does that mean the New Zealand dollar is a buy for me not at all? It just means that yes, the dollar is temporarily weaker, but ultimately There could be some nice decent shorting opportunities once the dust settles and some really nice levels in and around the 166 Level and just be just below that as well into this supply zone, although it's not the freshest area of supply It's been touched once already I think a decent area or maybe the potential for a stop-hunt above that area is going to be nice for a Potential short if you are looking to buy the US dollar if you're looking to buy the New Zealand dollar for whatever reason Then you're really looking for prices to pull back all the way down to the 58 40 cent area, so that'd be where the first demand zone is right there The pound and the pound again is rally really based off of the the weakness in the US data, but of course there is UK data this week coming out so it should be right here GDP growth rate Right quarter on quarter and again. It's forecast It actually is being minus 1% so they're looking like they're going into the demand from up in a quarter on quarter Looking like they're going into the contraction side of things and the Bank of England actually Ended up holding rates On I think it was Thursday to put the Bank of England's bleak UK outlook lifts bets on sharp rate cuts in 2024 so They were quite dovish when it come to it came to the economy and Bank of England governor Andrew Bailey's may insist that it's much too early to be thinking about rate cuts But financial markets have other ideas. So the betting by investors marks a sharp contrast With the message Bailey repeated in seven interviews and press conferences after their decisions. So you know, basically the Andrew Bailey is basically saying now with everything's okay. We're not going to be cutting rate anytime soon, but You know the the traders are thinking to themselves. Well, it doesn't look great for your economy if you're looking to potentially Your economy's looking to contract, right and you can start to see again, how close to contraction the contraction numbers that the UK economy is in right so point two percent and if the Court and court is projected to be minus zero point one and it comes out as minus point one or even Lower than that then It's going to be very difficult for the Bank of England to Hike rates in that environment. Of course, they have a mandate to try and get inflation down to the 2% target But a contracting economy will bring inflation down anyway So and then the next phase is actually to potentially look to support the economy by hike Sorry by cutting rates if they go into the contraction phase. So again, not looking great for the for the for the UK at the moment, although we've seen this, you know, this massive rally On the Friday based off of dollar, you know, dollars weakness or some sentiment weakness This could easily start to reverse You know down to maybe these one two twos one two ones if the The UK economy comes out maybe worse than expected, right? So there's that so again, you've got Several areas to look for short trades or if you're looking for a long trade Prices pulled back to that, you know, one two one Five area you can look for some short and long trades there Looking at the pound yen and the pound yen again rallying based off of really Well, I think anyway, I think it's just taking out a lot of stops but You know this this as it's rallying higher and you're seeing the potential for negative data being forecast That's what makes me feel that, you know This is basically just drawing traders in to go long for them to basically look for, you know, some short trades, right? Because pretty much, you know retail typically don't look at, you know the fundamentals or don't necessarily abide by the fundamentals and And so this is a great area to look for short trades in anticipation of data coming out that doesn't really support a pound buy right so nice pullback There but of course Forecast can be wrong and if they are wrong and prices pull back into a demand zone And let's say the data comes out and it's better than expected, right? Then I think that it's going to be a very nice zone to look for the potential for a buy So you've got those areas within that demand zone that you can look towards in fact even the top of that zone now You can see areas of support and resistance So pull back into that zone another time frame I say go down to an hourly or something like that and look for these areas to look for a potential buy trades Yeah Not too sure what's going to happen on that no one is of course But if the forecast is is for a the contraction then The fact that it's rallying is I think it's just drawing traders in to go long Looking at the euro dollar and the euro dollar You know, we've obviously seen a rally on that on the euro but not for any other reason other than the dollar being weak Technically I do, you know expected I did kind of expect to pull back anyway Especially when you see you know over the year how you know how much the euro dollar has fallen now We've pulled back to a decent zone the 107 30s towards the 50 areas one of seven fifties and with the I guess with the With the euro area We did get some data as well which was talking about euro zone inflation sinks the two-year low as economy contracts as well, so They're an even worse situation in terms of the economic contraction But we get into that in a sense of consumer prices up 2.9% from a year ago in October And it was estimated at 3.1% so they actually closer to that their 2% target in terms of their mandate We're talking about the ECB here and third quarter GDP fell 0.1% from previous quarter as Rate hikes away, right because rate hikes typically contract your economy and so We go to the euro area GDP and you can see now that the third quarter data in fact came out as being minus 0.1% so you're seeing in fact the effect of rate hikes in the economy borrowing a lending cost or more expensive And that does have the effect of contracting the economy. So Europe I think out of you know the majors if you're looking at you know the pound and you're looking at the dollar I think Europe are in a worst worst situation. So, you know looking at the technicals now I think for me The the euro could be a decent short, but again, it really just does depend upon I guess short term sentiment because there was a lot of traders who are looking to kind of short the dollar anyway, but If you're looking at both, you know, all these currencies in a straight fight the dollars should you know win out now I have no idea whether prices will reverse around here or maybe go up to the 109s but I think the 109s would definitely be you know a ceiling in terms of you know value and Price don't reverse around here Then I think definitely the 109s is going to be the zone to look for some short trades if of course you are your biases to short the the euro against the dollar if you're going the other way and you think the Euro could rally based off or maybe some sort of risk on sentiment coming into the market because that is possible as Well as maybe China growing, but China is still struggling And maybe some de-escalation in with the with the Israel and Palestine You know conflict then Yeah, I think any pullbacks into maybe this type of demands on the 105 80s at the moment. It's going to be a decent Area to look for potential buyers for the euro But although short term wise I can see why you know traders are going to be bearish on the dollar Will that be you know, would that be short-lived or that you know continued prices will rally for the next You know two three four months. I'm very doubtful that it will so if I was looking to still buy or sell Any of these currencies my bias would still be to look for dollar buyers at these areas If not, you know the 106 also 107 fifties to 108 and then if not then the 108 80s to 109 40s are going to be really the main area for me to look for potential shorts Of course unless there was data supporting, you know, maybe a euro by looking at the euro yen and I Was saying in the private members group. I actually do think that this area here was actually quite a decent Looking like a decent setup for a short trade I Think from now is going to be quite nice Traders will know this has a bit of a stop-hunt and that level there So I do think any any any moves to the downsides are decent now In terms of a supply zone at the moment the nearest supply zone There hasn't been a supply zone up this high since well For the last 10 years so to go short right now It would have to really be based off of an intraday setup. So for now I can't really draw any kind of supply on there But the guys know on the intraday What you'd be looking for as again, I mentioned it actually in the setups in the weekly video on the 4th of November so yesterday's video basically that I put in the in the group But if you are a buyer of the euro for whatever reason, then I think a pullback into the 158 30s The there's going to be the the first area one looked to buy the euro against the yen Aussie dollar and Aussie dollar looking very strong Australian dollar again. I think the RBA really the only bank currently there are looking to Hike rates at the moment everyone else is pretty much holding And the Japanese yen of course based off of wage data, but if they continue to hike rates You could you're likely to see prices move to the upside wherever they go like that or whether they kind of pull back And then move to the upside. I think the market Hasn't necessarily fully priced in rate hikes, but they probably will start to this week But if they if they actually hold rates this week then you can actually see a big drop matter of actually my see a big drop in that and prices may start to actually come back down to the 63 70s, so this is where you're looking at potential Buyers if you're looking at buying the Australian dollar or if you're looking at, you know, any kind of short trades Maybe taking profit around here, but but yeah, I think it all depends upon what happens on is Tuesday I think it is in the UK. Yep. So it's Tuesday evening Or Tuesday morning matter of fact at three three o'clock and we've come up to a very interesting area So let's see what happens. So again the expectation the forecast is for a hike and if the RBA don't hike then I think really the Downside is going to be a very nice trade Australian dollar Japanese yen and again blasting through these supply zones because of the expected rate hike and I do think we do have another Supply zone somewhere around here And so if prices do come up that high, I think actually that would be a decent sell as well reason being is because I Think after this rate hike for the phone for the Australian dollar. I think maybe somewhere around here may be the limit The full prices start to drop as we go into next year and the Bank of Japan start to actually hike rates. So If obviously they get the data, but but yeah, I think for now any buying on the on the yen is a bit Is it gonna be a tricky one? But if you're looking to buy the Australian dollar again, I don't think there's any opportunity now This has gone way too high You couldn't be a we can be a buyer at the at the highs But I prefer to be a buyer on pullbacks and look at you know value But the nearest really kind of demand zone buy would be all the way down at these 90 cent areas So if you're looking for prices to really kind of pull back to you know All the way down here before looking at a long trade. I'm not saying that it can't happen But in the short term, I can't really imagine it's happening unless it again You know you get a rate hold right from the from the Bank of Australia and finally we have Gold and so gold still holding up in a risk-off environment Any pullbacks down to these areas? I was saying last week are going to be definitely Bargain areas so bargain prices with decent prices to look for long trades and so Yeah, I think the path for these positions is to the outside Especially with risk-off the dollar kind of cooling off as well in terms of in terms of strength So this is where you might start to now see a return of you know If the dollar starts to decline in value, then you start to see gold actually increase in value Before we were having actually gold and or for a little period gold and the dollar Actually both increase in value at the same time because they're both risk-considered risk-off assets The dollars considered a risk-off currency and gold is considered a risk-off assets, so precious metal and So there are times where you can have both the gold and And the US dollar actually appreciate or devalue at the same time But I think now that gold might You know heading potentially into a recession cycle and you know rate cuts coming next year This could put a nice You know firing in gold's return to potential all-time highs and even beyond that So I think any pullbacks are going to be nice opportunities to buy overall like in the medium to long-term Anyways guys, that's it for this week. I hope you have a great trading week and take care all the best