 Hi, my name is Leo Merrow, Currency Trader and Trading Coach at Trading180.com and welcome to this week's supply and demand for us in Gold, Fundamental and Technical Analysis. Hope you all had a brilliant week last week and if you didn't, don't worry, this week will be a new week and hopefully you'll find some profitable opportunities and take advantage. So, getting into the week ahead for the December in the United States, the focus will be on the highly anticipated US labor market report followed by Jolt's job openings and the ISM services, PMIs and those are really quite important for the US economy and GDP and a country's GDP and where it is in its economic cycle is actually reflective of what the currency is likely to do. So, a currency will typically tend to depreciate if an economy is going to a recession and if an economy is growing in maybe the expansion or the boom phase you'll see that the currency tends to appreciate. This is due to supply and demand. So additionally, preliminary readings of Michigan Consumers Confidence, Factory Orders and Trade Data will also offer insights into the economic landscape. Internationally, monetary policy decisions are expected in Australia and Canada and I think both are actually expected to hold rates while inflation will be closely watched in China and Switzerland. GDP growth rates from Australia will also capture global attention. Furthermore, services PMI from China are being an important one for global growth and whether China are recovering from their current economic contraction along with updates on industrial production and factory orders in Germany alongside Canada's IV Purchasing Managers Index will contribute to a comprehensive view of global economic activities. Additionally, attention will be on foreign trade data releases from Germany, Australia and China. So lots going on this week and this week, this month is going to be a short month as we're pretty much at the end of the year. Everything starts slowing down around the 19th, 20th, I think the last central bank meetings are really around and I think it's Japan is maybe around the 19th or 20th and then after that, traders really start to unwind for the year and January will be when it's typically volatility starts to pick up. So if you want more information by the way, go to tradingeconomics.com and click on the week ahead tab and if you are in the mentoring group, trading 180 mentoring group, then you can go to the trading videos channel where I have a more detailed fundamental breakdown as well as some much more detailed technical breakdown in terms of trade opportunities, levels, etc. This video on the YouTube is really just for free and kind of just the summary. So before we get into the upcoming fundamentals, I just wanted to kind of go over the trade update that we spoke about and I was in last week. So this is something that I'm doing week in, week out in terms of trade updates as well as one winner and one loser that I've had. If I had two losers, then I might go over two losers. If I go, if I had two winners, then I might go over two winners, right? But this was a trade update from last week. So if you go to last week's weekly video, you'll see the breakdown of this trade that I had taken on the Euro Swiss and the reasons why I'm bearish fundamentally on the Euro and I've got in actually on this nice candlestick right here. The two hour, which ended up being a really good trade. So prices are going sideways for a little bit. And actually, I must admit, I was thinking about exiting the trade. We were discussing this on Wednesday in a group call and I did say then I would hold on to see what the data was going to be with inflation. Because inflation came down and it did come down. Then I then basically this would have been a hold reason being is because the central bank are less likely to be hawkish and inflation is coming down to their 2% target inflation target. And so the like I said, the European central bank are less likely to hike, which should weaken the Euro. So it was on the Wednesday. I think Wednesday's call I was thinking to myself, let's see what happens. And the data came out and it was pretty supportive. So you can see inflation came out. You can see that the actuals of 3.4, the expected inflation year on year, it was forecasted to come out as 2.7 from 2.9, but it actually came out as 2.4%. So you can see pretty much what happened. And so in the group, I ended up taking some profits, part of the majority of my profits off at the 50% area. So that was a decent trade from up here. And then I let 20% run to 80% of the range, which actually it didn't. My position didn't close immediately there. And it bounced away from it. So I thought, oh, my days will scan on here. And then it eventually rolled over and hit the rest of my position. So I'm actually out of that really nice trade from the absolute highs, managed to pick the highs on that and got out at 80%. So there's the trade update Euro, Swiss, and later on in this video, I will go over the dollar CAD, which ended up being a loser on the Friday, as well as the Aussie Swiss stop hunt. So stick around for that if you want my trade breakdown on those. So let's get into the fundamentals for the week and some technical. So dollar index and the dollar index is just a measure of dollar strength. And now my bias is still really to kind of looked up for buys on the dollar. Although we came down this week, the dollar index doesn't look too bad in terms of, you know, the last couple of days we have found a bit of demand down at these 102 round number. Prices didn't hold in this demand zone. So we can delete that from an overall high and low. The dollar was obviously expensive at the 107s. And it was a bargain at the 90 at the 99 area. We're just below fair value, probably somewhere like around the 61.8% fib or 61.8% discount. And so this starts to look cheap to me. But there is some negative sentiment surrounding surrounding dollar. Their economy is slowing just like all economies are slowing by the way. So it's not just exclusive to the US economy. That is the economy is kind of slowing down. And it says here Americans are finally turning frugal after splurging over the summer. So government data retailer warnings indicate consumer pullback. Further labor market cooling may put more pressure on spending. So if the consumer stops spending, then businesses aren't going to get their their money in income. And then that affects the economy, right? So it's put to kind of put it simplistically. And then there was a Pals said that he pushes back Fed, Chair, Jerome Powell on rate cut bets, but markets push back harder now. Again, really the narrative fundamental narrative and sentiment narrative is that the federal reserve are going to be cutting rates next year. And the market is pricing that in based on what they think is the data today, right? The economic data and the inflation data today, which is the reason why you're seeing the dollar kind of set off a bit. And there's some negative sentiment and Jerome Powell is basically pushing back and saying that, you know, rate cuts in the first half of the year may not happen. So just here it says Federal Reserve Chair Jerome Powell attempted to push back against investors growing expectations of interest rate cuts in the first first half of 2024. Wall Street responded by doubling down Friday despite Powell's warning that it would be premature to conclude with confidence that we have achieved sufficient restrictive stance or to speculate on when policy might ease. So it says markets now place odds of a quarter point cut by the federal open market committee, March meeting well above 50% and are fully pricing in a cut in May as traders viewed Powell's comments as sufficiently balanced to leave the door open for such a pivot that followed a round of manufacturing data earlier on Friday adding to and other measures that signal growth is slowing. So the market looks like they're pricing in rate cuts. So there are reasons to definitely sell the dollar 100% and one of the things I'm saying to the group is that I'm definitely not married to the dollar. And if data does support short in the dollar, then I will do that. But my bias really to kind of buy the dollar over certain currencies is that I don't think the dollar is the worst currency, right? So you can't look at the dollar in isolation. You can't say, oh, well, you know, this is what's happening to the dollar and not compare it to what's happening, for example, in Europe or in Canada, right? So although things might look bad in the U.S., are things worse in Europe or in another country, and then you make a judgment as to which one is the worst. And then you look to short the worst currency, right? So yes, it looks to headlines look bad. But is the dollar the worst? No, in my opinion, it's not. But let's see what happens. The dollar at the moment suffering from negative sentiment. So going back to the dollar index this week, I do think there could be a little bit of a bounce. I would say if prices do come back down, you definitely want data to support, by the way, buying. So you can wait for at least some decent data to come out before looking to buy the U.S. dollar. But it does look like in the short term, any pullback to any supply zones or something around here looks like you could look for short trades where we are right now. The market could start to look like it wants to continue to make lower highs and lower lows. But me, I'm still looking for dollar buys in terms of bargain hunting. So let's see what happens with the dollar. There are reasons to buy and reasons to sell the dollar. So it's not an all out seller when all out buy. My bias is only slight leaning towards, I guess, more dollar buys. So I'm going to still look for some dollar buy trades against, you know, certain currencies, not necessarily all currencies. Dollar yen. So the dollar yen has pulled back again just really kind of based on dollar weakness. It's really not really yen strength. Although there are rumors that the yen could start to adjust monetary policy next year. And if they look like they are and the data does support that, then I will be a buyer of the yen. I think next year the yen is going to be a very, very good trade if the data proves it. And so there's actually talks that the yen could come all the way down to the 122s. I think it was next year with dollar weakness and the Bank of Japan being the only bank really that's hiking rates or looking to potentially hike rates. So not only will the yen strengthen or should the yen strengthen against the dollar, it should strengthen across the board while all other currencies and the central banks are cutting rates and you start to see the Bank of Japan hiking rates. So there's a massive divergence there on the horizon. So I'll draw the demand zone for maybe around here. So with that being said, I do think that any levels to look for trading opportunities to the upside in terms of buying the dollar are probably starting around now and maybe down into the 145s, 144s. If you're looking for short trades and trying to short the dollar, then you're looking for probably some sort of pullback into the 149s. Maybe a bit earlier, maybe the top of this 148. If this makes a lower load, then this would create another supply zone. So maybe the top of here as well, the 14850s. But until that does, I think the really the supply zone trading opportunity would have to be at these lower lows here at the 14950s. Going to the dollar CAD and I lost the trade on here this week. I'll explain that at the end of the video. But the CAD actually had some on the surface. It looked like good news, but it was a bit mixed. Finance, real estate, job cuts push up Canada's unemployment rates. So jobless rate is highest in 22 months as firms reduced off. Total hours worked plunged by most since early last year. So Canada's labor market beat expectations with job gains, but a rising unemployment rate and the drop in hours worked show mounting economic weakness, especially in the finance and real estate sectors. So there was again some positive and negative news for that dollar CAD, but overall it did strengthen against the dollar on the Friday and kind of pushed back down into this area here. The 1.35 area round number, which I think is decent for a potential trade. And I'm probably going to be getting back in on this trade to some degrees. So let's see what happens. But yeah, so those demand zones just didn't work out. There was no demand. Unfortunately, not every single demand zone is going to work out. So fundamentally again, we had some decent news in terms of GDP growth rate quarter on quarter. But this is already positive, but it had been revised up. So that looked like it was being positive. But then on the Friday, we had ISM manufacturing was supposed to come out a bit higher, tick a bit higher, from 47.6 from 46.7. But the ISM manufacturing actually flatlined. So it came out the same. So the market kind of readjusted. And that was seen as a bit negative or depreciative for the dollar. So yeah, ended up losing my last trade on this one. Again, I'll break that down at the end of the video. But going into this week, you'll see potential move here. Or if prices do come down to this 1.34 round number or 1.338, then I think that's actually going to be nice for a buy trade. If you're looking at continued shorts, then because I'm not really convinced on the Canadian dollar. So any pullbacks up into the 1.36 and even way back up into these areas here, the 1.37 round number, I think might be decent for a potential short trade. If you're looking to buy the Canadian dollar, New Zealand dollar, US dollar, now I'm actually bullish on the New Zealand dollar based on some data that came out this week or the central bank matter. In fact, we're saying that there's the potential for a hike. So they're likely to hold at the next meeting, but potentially next year they could start to hike. So I think that if the Fed actually are still holding, then any pullbacks into a zone should be quite nice. So you can look for buy trades around here. I think the New Zealand dollar isn't necessarily the best buy against the US dollar, but look for something like the New Zealand CAD for example. I mean, yeah, New Zealand CAD and New Zealand Euro would be a better trade for me in terms of policy divergence at the moment. But I do think this is also quite a nice level in terms of some port of resistance in that demand zone. So that's quite nice for a pullback. If you are looking at short trades, and again I wouldn't necessarily buy the dollar against the New Zealand dollar, you can look for some trades probably looking at now. There is a level of horizontal resistance right here. Yeah, somewhere around there. So yeah, decent area to look for the potential reversal, but I'm not really interested in looking at this trade. If I was, it would have to be more to the upside. Pound dollar and the pound has gathered strength going into this week. There wasn't really much news out of the UK, but it was the pound's strength and short-term strength has really been driven on receding rate cut bets. So the pound sterling hits new peaks against the Euro and the dollar on receding rate cut bets. So this was driven really by, not last week, but the previous week's data with regards to the PMIs. And so the economy, because the PMI manufacturing came out better than expected, the market has now decided that the Bank of England are maybe not going to cut as soon as expected. So you could see basically a week ago, they were pricing in maybe rate cuts to come in a bit sooner, but recent data has come out after the PMIs and that is expected to kind of be delayed a bit. And so if they're not going to cut rates as soon or as deep as expected, then that is actually positive and appreciates a currency as the market has to kind of revalue the pound. So you'll see in the pound with negative dollar data sentiment or dovish dollar sentiment, and then you've got more of repricing for the pound. That's the reason why you're seeing the pound go, continue to go higher. So any pullbacks into demand zones, I think could be actually decent buying opportunities if you're looking to buy the pound. I'm looking to buy the pound, but again, not really against the dollar at the moment, against other currencies would be, I think, preferred. But if you are a buyer of the pound, then the dollar and the pound dollar pair, and that's what you trade, then I think probably the power for this resistance possibly is to the upside. But also as well, just be mindful that if the dollar does have some decent news, then this could start to reverse from where we are around now. Pound yen, looking for a bit more of a pullback on the pound yen. So yeah, I think there was last week, it made higher highs, matter of fact, this week. So prices did pull back into the 86 area demand zone, which also turned out to be a decent level of previous resistance. So you know that business was being done there in terms of buying by institutions. But I am waiting for a bit more of a deeper trade. Preferably there is a stop sign in and around this area, which I have highlighted in the members group, which you can take, but ultimately, I think the better value would be down at the 184.50s. So anything around here and just below, I think it's going to be really nice for a buy trade. But we could see a bit of a stop sign around where we are now. And if it does occur, prices could start to go to the upside. That would be quite nice. But also be mindful that this could be the highs based on a shift, the potential shift in the Bank of Japan's, I guess, sentiment in terms of yield curve, moving yield curve control. If it does look like they will be then that yen, it's going to be a very good trade. And that's where you probably want to look for some short trades on that yen. Looking at the euro dollar and the euro dollar, I'm short on that euro as you know. Prices did kind of spike above and come back down this week into this demand zone. And it's found some buying in and around here, of course. So the euro didn't have a great week either. And as I said, never look at just one currency in isolation. Traders are also betting on earlier and deeper ECB cuts as inflation is slow. So market footing prices in the cut in April sees more easing coming and euro inflation decelerated more than economists expected. So pretty much went over this and why that is usually depreciative of a currency. And that's what you're seeing now. Now I'm not saying that it's going to drop to the lows because if you've got two central banks where both central banks are looking to potentially cut rates soon, then you may see actually the market auction in and around this area or what traders would consider ranging. So you may see something like this. The euro dollar is a bit of a trickier one to trade. But I do think my bias would be more to the short side. I don't think the US is in a better position matter of fact than Europe. Main reason is because if you look at their economy and the economic growth again this week, we've had the GDP growth rate coming at 5.2 percent. And although yes, this is old bit of old data, it's the most recent data from the estimates. Whereas Europe on the other hand, I think they are in the contraction phase. So I think their GDP is minus 0.1. So buying the euro when they're potentially going into a recession is just not something that I'm willing to do. So I do think that if I'm in a straight fight, my money would be on the US dollar. So any pullbacks into a supply zone, and probably this would be now the new supply zone from here to here is going to be where I think the opportunity to look for some downsides. But let's see what happens there. If you are looking to buy the euro, then that's decent or you could look for euro. I think if the euro comes down to the 107s, 106s, that could actually be a decent area to look for euro buying against the dollar. Euro yen again, weaker euro coming out with that data. And again, isn't necessarily the strongest, but it's just the euro had some inflation data that didn't support buying of the euro. And as you previously saw, the market is pricing in rate cuts. So again, there's no technical level that's going to stand in the way of fundamentals. It doesn't matter what you believe. Markets don't move based just solely off of the fact that there's a demand or supply zone or some sort of technical level. If the market doesn't think that there is, this is a bargain price and demand is understanding and supplies understanding where the bargain and expensive areas are. If that has to be driven by either fundamentals or sentiment and obviously the fundamentals are not supportive of buying here. So technically that level and that price is just not going to be respected. Now, technically this is a very nice area to look for a buy. But again, the question is, is why is the euro buy here fundamentally me personally? I'm not looking for buy trades on here or sell trades. At the moment, my bias is probably more to look for short trades in anticipation of a yen change in monetary policy. So preparing for that, if prices do pull back up to the 163s, then I think that's going to be nice. But again, the data really has to support that on the yen. So that's where we are with the euro yen Aussie dollar. Now, the Australian dollar is actually in my book a buy, continue to be a buy, although the data did come out and inflation data came out and Australia says, Australia's inflation calls boost in case for rate pours. And the result was driven by oil price gains slowing from high levels and traders paired bets on another RBA hike to about 50% from 70%. So it's not necessarily the worst thing in the world. It's a 50-50 coin flip. You know, whether the traders are betting the probability that the RBA will high crates, but even if they don't high crates in the latest Westpac Bank analysis, they think that the RBA will probably hold in December or likely hold in December, but the February 2024 meeting is still live in terms of the potential for a rates hike. So I think any pullbacks into demand zones could be decent buy and opportunities if you're bearish on that dollar, US dollar, and more bullish on the Australian dollar. So any pullbacks, in fact, I'll include this zone here as well. So any pullbacks into these areas, if you want to trade this, and again, I'm buying the Australian dollar, but it's not against the US dollar, not really a pair I'm looking at. But yeah, that's decent for a buy and these areas here, if you think that the Australian dollar should appreciate against the US dollar. Aussie yen, again, my bias would be more to buy this currency pair, although you have to acknowledge that when you zoom out that we are at these ultimate highs. And so buying the Australian dollar at the moment is a bit tricky against the yen. And again, as mentioned before, if the Bank of Japan start to switch their bias in times of their monetary policy and implement monetary policy measures that are strengthening of the yen, then in fact, this is going to be a very, very nice sell regardless of what happens with the Reserve Bank of Australia, simply because even after February is over, the bank are less likely to hike rates, whereas the Bank of Japan are likely to continue on their hiking cycles. So I think where we are, I think this pair is probably done in terms of you'd really need to see prices move much higher than a pullback into that zone before looking at going long, if you are looking to go long, but where we are now is quite tricky. So I'd wait for prices to kind of pull back even deeper into maybe the 95, 50s, 90s, 96, 50s, 96 round number, for that to be a really good opportunity. Of course, you can look for the 97s, but if I'm looking to trade this, I want a deeper pullback. And then finally, we have gold, and gold pretty much making higher highs based off of dollar weakness. And really the headline on this is that gold inches closer to record high as bets for fed pivot beef up. So the precious metal has rallied more than 11% since October, and the US Fed preferred measure of underlying inflation data. I'd say that was just before the inflation came out. And so gold basically making new highs as the dollar gets weaker, right? So yeah, any pullbacks on gold, I think are potential nice buying opportunities if you have a short dollar buyer. So even if you don't, and I believe that over the next year or two, as the, as economies, all economies go into their recession cycle and contraction cycle, that gold will be a decent, is a decent buy. So any pullbacks into these areas here, I think are really nice for potential buyers, even if you're not necessarily trading this, I think gold should be a buy, just period, right? Whether you're buying gold bars, coins, sovereigns, Krugerans, wherever you're from, maple leaves. So yeah, you've got any pullbacks into these areas if you're expecting the recession cycle next year in a rate cutting cycle. So gold, a decent buy, and yeah, let's see what happens there. So that brings us to the end of the fundamental analysis and technical analysis video, and let's get into the one winner and one loser. So here we are on the dollar cat again. So basically on Friday, and let me just break this down, let me delete all of this. The level I was looking for was this area here. Now, actually there was a, there was a trade where I got a small win, but the last trade that I took was actually a, was a loser, but anyway, I'll get into that. So down onto the hourly, and what I saw, in fact, let me just clear this, was a what I considered to be a stop-punt just before the news. So you see where you have a level, that one, and then it kind of went below it, but this area here, once I saw this, once I saw this one set, I thought that this was actually a decent stop-punt, and it was basically taking out all the stops before the news, right? So the news came out for unemployment, was supposed to come out there, and so I thought the market was positioning itself to close back inside this area and be a stop-punt. Now, again, at this point, nobody knows what's going to happen with the news. If the news comes out worse than expected for the Canadian dollar, then I was likely to see prices go to the upside, right? So it entered at one o'clock, and the news was at 1.30, and again, nobody knows what's going to happen with the news. Now, unemployment did come out actually as forecasted, but what was kind of supportive for the Canadian dollar was a bit of the jobs data, which I do now think that it might not be as supportive as price is actually reflecting. So I ended up getting into a few positions on this one. So many of you know that I do enter into three positions, right? Three or four positions. So entered here, market order, then two pending orders, 50, and then 100% discount by orders, and then the data came out, and then we got a bit of a contraction, right? Or say contraction, but a bit of a move down. So I entered into, I was triggered into two positions, but I was still waiting for, didn't get out of the trade, but I was still waiting for the dollar news to come out, which was ISM manufacturing, and if that was positive, then I was thinking that, excellent, I would have gotten a better price, at least a couple more positions at a decent price, which would have pushed prices to the upside, and then the data came out and ended up stopping me out, right? There it was. So actually I think it stopped me out just before, but it would have stopped me out anyway. So that was the trade and ended up losing all three positions on this one. So a full stop out doesn't happen often, but that was just the way it went against me. So that was that now with the Aussie Swiss, which was the current winner at the moment, this was something that I put in the group, and this was said to everyone on the first, that afternoon at everyone, for everyone who took the Aussie Swiss stop point yesterday, and this was from a chart that I posted earlier, the day before you should be in some profit if you were triggered into 50% retracement pending order. So I've taken one to one profit on the 50% retracement position. Now I'm still in trading the remaining position. I have also moved my stop just below the stop hunt so to lock in for other profits. So let me break down that trade. And so this trade was a stop hunt, and it was a level clear defined level. And then this was the stop hunt around here, right? When prices came back inside, I decided that I wanted to enter again, see if I could get into a few positions if the market gave me that, which it did. So the market retraced, so I entered into that market, that candlestick there, and then prices pulled back to the 50%. So when it done that, my stop was actually, let me just move this down again as well, my stop was 11 pips. And so when prices pulled back to this area here, right, what I did was I took one to one, right, on the Friday, which hit my position on a Friday. And then the market order, which I'm currently in, right from there. Now I can swing trade. If I'm right about this fundamentally, then we can see prices move to the upside. And I've also as well locked in some profits. So I've moved my stop loss just below the potential stop hunt. Well, it looks like it's a stop hunt now. And so not only am I, you know, got a one to one on that, basically I'm betting in a break even set of prices pulled back now and basically stopped me out from here. I would have broken even at the very least, but because I've locked in some profits now, this is probably going to be a small profitable trade. And so yeah, that's pretty much one loser and one winner with the potential for this to continue going to the upside if the Australian dollar does continue to appreciate against the Swiss Franc. And fundamentally, the Swiss Franc, unless there's severe risk of coming into the market, shouldn't want to appreciate. So yeah, that's one winner, one loser. I hope you have a great trading week guys and I'll speak to you all next week.