 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's supply and demand for us in gold fundamental and technical analysis. So let's get into the week ahead starting the 17th of July and the release of the latest UK CPU report for June. We're going to track more attention than normal in light of the ongoing hawkish repricing of the Bank of England rate hike expectations. And you've seen that recently in the market, which we'll get into when we get into the technical side of things. The latest CPU report from Canada, New Zealand and Eurozone in Japan will also be released in the week ahead. The Bank of Canada has expressed disappointment recently that core inflation is coming down more slowly than expected with three month rates running around 3.5 to 4% since last September. And in contrast to that, the RBNZ which is the Reserve Bank of New Zealand has just paused the hiking cycle and further evidence of slowing inflation alongside recessionary conditions in New Zealand would reinforce expectations that the hiking cycle is over and bring forward rate cut expectations. And so the latest CPU report from Japan is unlikely to materially alter expectations ahead of the Bank of Japan's upcoming policy meeting on the 28th of July and the Bank of Japan is already expecting or expected to raise their inflation forecast this year. And this is from the latest MUFG report. So lots of market moving news on inflation and some central bank announcements. So getting into some technicals and some further fundamentals on things and starting off on the dollar index and the dollar. This week or last week I should say was really kind of suffered in terms of the valuation which actually ironically is what the central bank really kind of want in terms of inflation going in the right direction. So we had this week, sorry not China, the US inflation hit two year lows giving hope for an end to Fed hikes. So the Fed's job is actually to get inflation down to a 2% target and inflation is trending in that direction. And as long as it keeps trending in that direction the Federal Reserve are less likely to hike rates and hiking rates typically supports a currency. I'm going to say supports meaning the effect of a rate hike is to appreciate a currency to bring down inflation. But inflation is already coming down. They don't have to to hike rates, right? And so that's the hope, right? Is that the end of Fed hikes is coming soon. But the Fed kind of pushed back slightly and said Fed Open are open to another rate hike after expected increase this month. And so officials say it's too soon to declare victory over inflation. Investors betting July rate hike will be the Fed's last. And so that's what's happening on a price chart is that the market is pricing out I guess two rate hikes, which was what was expected to now price in maybe one more. And so we zoom out a bit further dollar index coming down to what that 99 area. And so let's see what demand zones if you are looking at demand are in this area of around 99 ish, probably somewhere back in April 2022 and around here as well. So we could see actually I think this might have pushed just below that. Yeah, so maybe you're looking at prices hovering somewhere around it because there is some long term support and resistance in that zone as well. So that may support the dollar just technically. But I think fundamentally that the path for these resistance is probably now looking to the downside. So I personally think any moves back any pullbacks on the dollar are going to be shorting opportunities into some sort of supply zone. On the dollar index, the nearest supply zone is actually going to be all the way up into the 102. So unless you get something like that, or if you get lower highs and lower lows being made, what you would do is just use that as a confluence into some sort of supplies on a forex pair like the dollar yen, or maybe Australian dollar US dollar to look for confluence levels with shorting the dollar. So yeah, it looked like the hedge funds as well are abandoning their bullish dollar bets on peak fed speculation. So leverage funds go to net short dollar for the first time since March and US inflation report. This was before the inflation report and it was talking about the US inflation was the next big risk for markets. And that turned out to be true, right? So inflation came out. I think it was the Wednesday and pretty much drove prices to the downside. So as long as the market is pricing out rate hikes, we could see further dollar depreciation. And going back to the China story, China's economy is struggling to gain traction. And that actually could support the dollar based off of risk, off-central and global growth slowing down. And if China are slowing and struggling to gain traction and their economy is, then money tends to flow into more safe haven currencies, which is basically like the dollar, right? And so that could be a supporting factor in dollar downside. But I do think any pullbacks into areas of supply or lower highs, lower lows and pullback into a lower high, is going to be a really nice opportunity to look for some short trades on the dollar yen. And again, this week and from last week, we've just seen the dollar kind of, you know, devaluing in price. And the yen, in fact, increasing value over there was speculation when over it last week on the fact that the bank of Japan could adjust monetary policy sooner rather than later. And so the market has priced that in alongside, obviously, some pricing out of the dollar rate hikes. And so let's see what happens at the moment. We still, technically, we do have a nice area of resistance as well as support within that demand zone, which adds some confluence. So if you are looking to buy the dollar, that would be a nice area to buy the dollar. I think, again, sell trades on the dollar you're looking at either pullback into that area there, or at least a lower high, lower low to be made in a pullback into the supply zone. So that demand zone would have to be kind of taken out if you're looking at going short on the dollar yen, buying the yen. If you're looking to actually potentially get involved in buying the dollar, then I think this area is quite nice and its price on the 138 is actually quite decent for a potential buy, technically, or down into the 135s for a potential buy on the dollar. Dollar Swiss. And again, we've just seen this level from December 2020, January 2021. Yeah, just totally get taken out based off of, again, dollar depreciation. So rather than looking at anything even longer term and going back further than that, what I would probably do if you're looking to get short again is look for either massive, that's about what's that five, that's a good 500 pit pullback. Not sure that's going to happen anytime soon. So but you will probably see some sort of maybe move back into, you know, a level and start to create that kind of move where you get either lower highs, lower lows, or higher lows, higher highs, then a break of some sort of structure and then move back up into that zone where we get an opportunity to short. But for now, going short, I think that the area that most traders would look towards a short is going to be the underside of either that zone there, or probably that ultimate zone there is where traders are going to look towards going short. But I like to look for supply zones and demand zones first, and then, you know, any kind of support and resistance as confluence is kind of secondary. So wait for price to prove that there is supply there, then look for a pullback into that supply zone. So I think those really are the options. But for now, I think this week is going to see how it plays out. Again, the Swiss franc are still looking to high crates and are quite hawkish, even though they have reached their 2% target. Moving on to the dollar CAD and the Canadian dollar. Again, this week, strengthening, and then on Friday, we had a bit of a massive outside candle move. And I think that's probably anticipation of the potential inflation numbers that coming out, inflation year on year forecasted to come down to 3%, and the previous was 3.4%. So it is trending lower. But as we said at the beginning of this video, it's about the pace of inflation coming down that will determine whether the Bank of Canada will continue to high crates or not. So I think if inflation does stay sticky or come in higher than expected, then the Bank of Canada will continue to high crates which should push prices either to the downside or maybe move up to that area there before going lower. There is actually a supply zone around here as well. I'm dragging it down to that zone there. So that's where the trading opportunities are at the moment. Again, you do have a decent area of support and resistance within that zone there. So that adds a little bit of confidence to your trades if you do want to get short on the dollar CAD and buying the Canadian dollar. But it all depends on what happens with inflation because inflation comes in lower than expected than any kind of rate hike going forward for the Canadian dollar are going to be priced out of the market. And you're likely to see the Canadian dollar actually sell off across the board just like you've seen with the US dollar. Now, the New Zealand dollar has benefited not really from its own strength but just from the weakness of the US dollar. And we've seen it actually come all the way up to this supply zone here. Stop hunting a little bit above that level and then you've got another zone right above there. So this pair goes higher just based off of really kind of dollar weakness. But I wouldn't necessarily be buying the New Zealand dollar unless inflation does come out this week. And sorry, one second. Yeah, inflation does come out this week and remain sticky. Because again, the RBNZ are going to have to potentially have to hike rates or reintroduce hiking rates after holding rates if inflation is remaining a problem. So let's see what happens to the most obvious opportunity is really either down to 62s for a long trade or prices make higher highs and a pullback into that demand zone which would have been created. So that's really where we are. If you're looking to buy the New Zealand dollar against the US dollar going on to the pound. The pound has reached some targets. I know a few months ago there was reports that it could reach the 130s and it eventually did. So those forecasts came in correct. But the pound, although I am bullish on the pound in the short term, they did have some good data. So UK economy stronger than expected during coronation holiday. Figures will return the focus to inflation and wages and outlook for stagnant sparring growth in coming months. So short term wise data came out which was quite decent. But also we had the UK wage data keep spotlight on the Bank of England rate hikes. So wage data being an inflation measure and so if wage inflation is going higher, it contributes to overall inflation and inflation really wants to come down. So UK wages rose more than expected to a level that Bank of England Governor Andrew Bailey said is fueling inflation, maintaining pressure for higher interest rates. And so yeah, in the short term you have the Bank of England looking to hikes rates which should appreciate the currency whereas for example you had recent data for the US which came in, inflation data came in lower. So you have a divergence there between central bank policy at least in the short term which is driving the pound dollar to the upside. Now one of the downsides to hiking rates and the high inflation is that it weighs on the economy. So UK's inflation crisis expected to last another 10 months so the average household to be £2,300 worst off says report and researchers predict £65 billion wiped off spending power. So cost of living crisis still has nearly a year to run with calculations showing that the average household will be £2,300 worst off by the time inflation eases. So inflation expected to remain sticky which will have a knock on effect on the economy and if the economy starts to contract then the UK may start to be in a worse situation, stagflation and the market may actually start to kind of price out maybe the bullishness that they kind of have been on the pound. So just be mindful of that but as we see, we've just seen prices go from strength to strength again you're looking for either a massive pullback down to these one, two, six, five or again higher highs to come in and then a pullback or you could see prices do something like this make a new high and then pull back to that kind of demand zone. So again this week we do have for the pound we have inflation year on year so what we're looking towards there is if inflation starts to come down more than expected so forecast is 8.2, if it comes down to maybe 8 or even into the 7s in fact what you may see is the pound start to sell off in fact because then the Bank of England, the market will price out Bank of England the need for more aggressive hikes so that's going to be quite an important data point to watch this week and yeah just wanted to give a bit of a shout out to Sunday 1994 who's in the Trading 118 Mentoring Group and he said hello everyone hope you're doing well just wanted to share some exciting news with you after months of hard work, dedication and learning from my trading experiences I'm thrilled to announce that I have finally reached a break-even point in my trading journey it hasn't been an easy road and there were definitely some ups and downs along the way however with the support and knowledge shared within this fantastic trading group I was able to stay focused and push through the challenges he wants to express his deepest gratitude to all of us who have provided valuable insights and advice and encouragement throughout the process and our contributions have played a significant role in the man in his growth as a trader and he couldn't have achieved this milestone without our help while reaching break-even isn't accomplishment and it absolutely is he understands that there's still much to go much more to learn and improve upon and his next step is to stay break-even for as long as possible and make some profits where possible and this was so amazing to finally reach this milestone after losing thought so long and he also says that I have consistently gone above and beyond to share my wisdom and answer questions and provide me with the tools to succeed and he's truly grateful for my mentorship and the impact I'm having on his trading journey and I just want to say again congratulations to signing for Legion Break-even people might think that break-even isn't a major achievement if you go on YouTube you know it's all about doubling, tripling, quadrupling accounts in a short space of time which isn't necessarily the realistic in trading and if you can get yourself to break-even you're at a really really great point especially from losing a losing position and it can only get better from here it's just about eliminating the trades that you don't necessarily need to take maximising the trades that you are in and your profitability and the reality of trading is that you will get break-even days, weeks, months and even break-even years but ultimately we're here as a group to support each other and get everybody to profitability if you put in the work and it just shows that Sunny has been putting in the work and you know it's a great achievement and well done break-even is better than probably 80% of the market because 80% of the market if you go into brokers their websites and see the stats it's maybe between 70 to 80% lose money so you're in a maybe the top 20, top 25% of people that are at least breaking even so now is to get him to profitability so congratulations on that and also as well you can watch several of my 4x student mentoring interviews I have a playlist here that you can look towards and I'll put that in the top right hand side of the screen right now so you can click on that and watch some of what the students have been achieving in the Trading 180 Mentoring Group so moving on to the Euro Dollar and the Euro Dollar again strength to strength right Dollar weakness is probably the more driving factor of this short term the recent price action to the upside I'm not necessarily convinced that the Euro is an absolute out and out buy but in comparison to when it comes to inflation and central bank rate hikes you're seeing that the ECB really are one of the most hawkish central banks and so yeah it wasn't necessarily although technically although technically this was a decent area to look for some short trades you would have had to have believed that inflation was to remain sticky for the US Dollar which it actually didn't obviously it came out you know lower than expected PPI came out lower and inflation rate the inflation measures came out lower than expected which then drove prices a lot higher so as I always say you know that there's no technical level that's going to stand in the way of fundamentals right you need fundamentals on your side when taking any kind of technical trades because there are things going on beyond the price chart that move the actual price right prices are moving because there's an Elliott Wave 1, 2, 3, 4, 5 nonsense it's more it's to do with what the market values currency exchange rate at and that's driven by many things but the main thing is central bank policy and so yeah that trade obviously didn't work out if you got short so now it's really again looking for kind of pullbacks into areas you can look for a pullback into some sort of resistance zone which would be somewhere around here but from a supply from a demand perspective there's no really demand here so I would work for demand to pretty much appear on a price chart and then look for any kind of pullbacks into that demand zone so let's see what happens there but yeah fundamentally we have the ECB stuck with 25 basis point June hike after call for more so core inflation still too fast account of June meeting shows officials plan to raise interest rates again on July the 27th and so yeah they are they're still very very hawkish looking to hike in also September and so whereas you know the Fed are looking to a potential of the market thinking that the Fed are not going to hike after their next meeting so we have a bit of a divergence there and so I think for now the ECB is a buy unless something again changes there's a surprise and I think one of the main surprises that may be on the horizon is if the GDP data comes out for the euro and it comes out as in the contraction so a negative growth again and the euro kind of remain in a recession that may put a cap to the upside of the euro dollar so I think we're already stretched so I wouldn't necessarily look to buy a highs looking for pullbacks proof of demand and then look for a pullback if the data supports that narrative so the euro yen we did get a pullback down deep into the lower end of this demand zone here higher lows higher highs being made so you can see it kind of here where you had high low and then high low high prices pullback into that there's a bit of a move to the upside pullback into this demand zone and then has moved to the upside again so yeah the euro I would I would expect the euro to appreciate against the yen at least in the short term reason being is because the Bank of Japan switched policy but in anticipation of the Bank of Japan potentially adjusting their yield curve control you could have a situation where prices could start to turn around if they do then I expect actually prices to come probably way down to this 150s because it will be a shock to the market but yeah I think any pullback into these highs in anticipation of some sort of change to monetary policy getting ahead of that is actually a riskier trade but there's lots of potential downside in that but for now I think the path of this resistance is to buy the euro against the yen and so there are those your options at the moment let me just pull that down to here so it's not necessarily the strongest area of demand at the moment there is demand there but I think a pullback into the one five freeze I think is going to be decent for a potential buy for the euro if not then all the way down to the 150s is going to be where the next zone potentially is unless of course we get some sort of proof of value within that zone moving towards the euro pound and the euro pound again two central banks being quite hawkish I said I think last week I expected prices to kind of go into this this auction in this range what traders would describe as a range where prices aren't necessarily trending and I was right so again when you get two central banks that are competing two strong central banks then you tend to have an auction and a ranging market whereas if you have two central banks that are one is stronger than the other or hiking then you tend to get a trending market so yeah I think for now the nearest demand zone is somewhere around there again I would probably say that absolute highs you'd have to look for a decent area to look for short trades if you want to buy the British pound against the euro and a pullback into these lows before looking at getting long on the euro but not really a pair I'm interested at all in trading but those are the technical options that you have on this currency pair Aussie US dollar and again the US dollar being beaten up and so the prices to the upside the Australian dollar was appreciated based off of some dollar strength I'm sorry dollar weakness but also as well the RBA are looking to potentially hike they did a hawkish hold maybe a week or two ago and so the market is now pricing in some potential hike so any pullbacks into that zone there I think is decent or if you get a higher high and then move back into that higher low that's going to be a really nice area to look for some long trades if you think the Australian dollar is a buy for a sell trade I think this is a really nice technical level at the moment and it's got lots of confluence there of support and resistance it's even had a previous supply zone that supply zone has been touched actually several times so I wouldn't expect it to necessarily remain strong more times the level it's touched the weaker it becomes and so I would expect prices to probably continue to the upside as long as the Fed remain a bit more dovish or the market thinks that the Fed are not going to hike twice and the RBA actually are going to hike twice to try and get inflation to the downside so I think any moves to the upside are probably where the path of these resistance is and finally gold and gold benefiting from lowering inflation which seems to be a bit strange because gold is a hedge against inflation historically but a weak dollar tends to push gold prices to the upside so any pullbacks into this demand zone if anyone did get involved in this level we'd point this out from obviously a couple weeks ago really nice buy technically against that zone and our prices have actually worked out so any pullbacks into this area here the one, the 1910s, 1913s all the way down to maybe the 1893s to the absolute lows I think a decent buying opportunity is if you think that the dollar is going to continue to be weak in the future if you do think that there's an opportunity to buy the dollar in short gold then I do think that you may want to look for prices to go somewhere around the 1980s maybe just above there and look for some sort of short trade around the 1985s so yeah that's where we are with gold did I have any news on gold? I don't think I did actually I think, here we go is it China gold? Surgeon China's demand for gold is slowing as economy stumbles so there is China central bank was buying gold I think a few weeks ago a report came out and it looks like it's still out so this is the latest report from June the 19th the jitters effect in the world second biggest economy are starting to feed through into China's gold market and so that also is going to potentially support gold prices going forward but also as well I think it actually might still support the the US dollar as well so this is a bit of a tricky trade to be fair because if the world is worried about global growth in China the Chinese economy weakening then in fact money typically tends to flow into the US dollar so let's see what happens there but either way I do think that with the dollar if the dollar continues to weaken then any pull backs into demand for gold should be potential buys so that's it for this week hope you have a great trading week take care and speak to you all soon