 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's Applied Demand for us and Gold Fundamental and Technical Analysis for the week ahead, starting the 15th of April. I hope you all had a great trading week and if you liked the analysis that I provide every week, every Sunday, please don't forget to like, subscribe and share the videos with your trading colleagues and so this week getting into the week ahead and this is from TradingEconomics.com. So investors focus will be on retail sales figures and speeches by Federal Reserve officials followed by building permits, housing starts and existing home sales. In China, attention will be on the Q3 GDP rate, industrial production, retail sales, house prices and fixed asset investments. And China's mentioned really because China's recovery is important to the world and also as well to currencies and if you have a growing China, China starts to recover and actually get into their kind of recovery expansion phase of their economic cycle then in fact it can have a massive effect on currencies like the dollar and actually the dollar will end up weakening but we've seen the dollar actually strengthening for various reasons, various fundamental reasons which I'll go into a bit later but always worth keeping an eye on China and what their economy is doing when taking trades. Anyways, in the UK markets will follow inflation rate, unemployment rate and retail sales also inflation data will be released for Canada, New Zealand and Japan that's really important because at the moment if you're not aware inflation is a deciding factor as to whether central banks will be cutting rates or holding rates and so the quicker it comes down to their 2% target is the more likely they are to cut and the central bank that is looking to cut first versus the central bank that is looking to hold for longer you want to sell the one that is cutting first and really kind of buy the one that is holding for longer. So we're looking at finally Japan, Euro area and Switzerland will release foreign trade data Germany's ZEW economic sentiment indicator and Australia's labor market figures so pretty busy week for data for the major currencies now getting into some trade analysis in the trade that we took this week which was on the Euro dollar so the Euro dollar was a short for me and it's always been a short for quite a while matter of fact I've kind of had a negative bias and I say negative but a short bias on the Euro dollar and I've been waiting to get involved in this in the short and finally you know I managed to get an opportunity and it played out not necessarily a textbook trade and but I guess I'll explain it so again fundamentally I wanted to be a buyer of the the dollar and this week was a was a critical week especially because of CPI data right that came out on the I think it was a Tuesday was it was it a Tuesday it was the yeah the Tuesday that's what everyone was waiting for this week so in the in the mentoring group we were waiting for this and as well as the market right the whole everyone was waiting for this if you understand you know fundamentals and data and what happened is that inflation rate as you came out higher than expected and what that you know means is that the or that meant was that the Federal Reserve were going to hold likely to hold rates for longer so rate cuts so we're being priced out of the market which should appreciate the currency and so the day before on the Monday I had seen a bit of a stop hunt above the level if you go down into the one hour here was the stop hunt which was basically has been circled right that was the stop hunt there but it wasn't a stop hunt that I could really kind of get involved in in terms of this specific criteria that I'm looking for with the stop hunt which it really didn't meet in my book although you know you can still take you can still take those types of stop hunts but I didn't take it based really on that it was really based off of candlestick timeframe that I look at which is the 18 hour and it was like a there was a divergence that was going on so I use an RSI divergence I don't necessarily put it on on here for the Sunday videos but I use the RSI and one of the entries I've been looking at over the past few months is divergences and so it's just an entry trigger really that's all I'm really looking for and I saw the entry trigger because the direction is just short right so I'm not looking for divergences long and short just looking for divergences as an entry trigger or one of the entry triggers that I use on on the euro dollar so I was looking for a short trade where you have the RSI is is is not making higher highs or making lower highs and lower lows and you've got the price action doing the opposite where it's making higher highs and higher lows right so that's what I saw here saw on the 18 hour this was my entry and I took off about 75 percent profits around about two to one somewhere around here from that one position only managed to get in on one position so many of you know that I you know split my total risk up into three but I only managed to get in on a market order which didn't pull back enough to get in on a second position unfortunately so when the data came out managed to bank some profits and then I've let the rest run so I took off again 70 75 percent off about three quarters off that position and now I've got a quarter running which is just gonna I'm gonna let it swing trade and I've also trailed my stock down as well to around the 107 fifties just just below the I think 107 forties so yeah so that's basically the trade at the moment and I'm still in the yen euro yen short as well as the cad yen short and those trades and now in profitable positions so yeah the fundamentals are actually working out and yeah that was basically the the trade analysis for this week and also from last week many of you if you watched the video I'm in I'm still in the the natural guess long trade I haven't been stopped out of that again I took majority of profits off I got about a quarter of position on and trailed my stop up but it hasn't stopped my trailing stop out yet so everything's looking good in terms of trades over the past week or so so euro dollar nice trade and we'll get into some of the game some bit more fundamentals right now so looking at the dollar index looking at it from a daily perspective the dollar index is an equally weighted dollar index I'll leave the video which explains why you should use equally weighted indexes and why I use it anyway with my trading and why it's a better way to kind of see what the strength of the dollar is overall against the you know currencies that you're trading and again now really the bias is really just wait for buys on pullbacks for the dollar I think the market I think but I know the market is pricing in you know rate cuts in in September now it looks like you know maybe July to September rather than June and so they're holding for longer essentially which means that I think if the dollar index pulls back to any of these zones for me they are potential buying opportunities so let's see what happens there technically fundamentally you know it says US inflation quashes the chances of a June Fed rate cuts the US inflation came out at 0.4 percent month for month for the third consecutive month more than double the rate we need to consistently hit to bring inflation down to the two percent year on year expectations for a June Federal Reserve interest rate cut have collapsed with the higher for longer narrative on rates firmly in place September is going to be the earliest opportunity for any policy easing and that's pretty much you know the market sentiment at the moment so so there's that so for me that is really the the play the direction of travel for now and yeah if there's some confluence on the dollar index especially like somewhere around here where you've got we all have you know some support and resistance within that area of you know demand then that is also a nice technical level to look for you know trades if prices come down there then you're looking for long trades on the dollar crosses right if you want to go long on the dollar dollar yen so this level finally broke last week and we do have the market and prices on the dollar yen you know making higher highs now gotta be careful with trying to first of all buying at highs is not something I'd ever advise anyone to do but if you are that type of trader who likes to buy expensive prices just be mindful that the higher prices go is the more the Bank of Japan are likely to intervene to try and devalue their currency right they actually don't want a week yen at the moment because it adds to inflation pressures and so it says here that Japan's five-year yield rises to highest since 2011 on BOJ bets so deepening yen weakness fans speculation of BOJ rate hike so a rate hike is the intention of a rate hike is to appreciate the currency that's what is supposed to happen when they want to hike rates right when a hike rates and so everything is pointing towards intervention and rate hikes at the moment and it has here yield curve has shifted higher amid persistent inflation so inflation is going higher and last week we went over this as well in terms of the relationship between bond yields and and interest rates and so ultimately bond yields going higher is an indication that inflation is likely rising therefore if inflation is rising then interest rates should want to also rise too and so you're seeing bond yields overall it says here Japan's yields have risen you know I've risen across the curve this year right and so they just keep you know rising and rising the bond yields the two-year to five-year to ten-year to thirty-year all keep going higher and higher which is an indication that bond traders are you know thinking that inflation is going to rise therefore interest rates are likely to also rise and so with that being said just be mindful if you are looking to buy a highs because ultimately the highest goes and I've seen some banks like Goldman Sachs say that it should reach 155 that's that could be a target and of course it could reach 155 but any minute you could see the Bank of Japan and Ministry of Finance you know intervene and push the market down and that's when you start to see those large volatile moves so just be mindful that that is happening also as well we do have we are in a risk-off environment right so the front page I guess of the Reuters and Bloomberg is all about Iran seizing Israel linked container ship near Hummus Straits right so tensions are increasing between you know Iran and Israel and so historically the yen has actually is actually as seen as a as a safe haven currency and actually so is the the dollar but over the past few years I don't think the yen is really acted as a safe haven currency but it could do at any minute and that is also reason to just be mindful if you are looking to buy at highs now one of the things I would do is put a demand zone somewhere around here so if you are looking to buy the dollar yen wait for a pull back into that zone there and then look for a trade to the upside that should probably be the level but again that would have to happen and it not be in the face of intervention right I have to probably slowly start to drift down and then look for long trades if you're looking to take that play but I'm not looking to take this just yet I'm interested I said I'm looking to take this short really when the the US dollar and the Fed starts to cut rates I think this is going to be a very good trade to the downside but let's see when that happens right no one knows when but once the inflation for the dollar starts to cool and head towards the two percent then I'm gonna be all over this on a short dollar CAD so dollar CAD zooming out a bit on the daily again we got the really good news this week for the for the dollar if you are long as it was good news and it just blasted through these levels now I always say if you've paid attention to me for any length of time is that there is no technical level that's going to stand in the way of fundamental analysis you know price charts really should really just be used to understand where price is and if you obviously use you know pattern recognition and things like that but just looking at where bargains likely are and obviously if you've got a level you know whether it's support resistance or supply and demand if the fundamentals say that you know the value is going to be higher then you know or lower than that that technical level then it's just not gonna you know no technical level that's going to stand in the way of any type of fundamental analysis because fundamentals is what drives the market right we notice although some people refuse to admit it so again we've got some supply zones here and here but ultimately the path of these resistance should be to the upside so you're really looking for pullbacks on this trade that would be where I would look for for some my direction is looking for something like that or if prices make higher highs like this like you know a higher low and a higher high then you're looking for a pullback into that higher low because that would be the new demand zone and then you look for a trade in and around that zone there pound dollar again pound dollar this this week again affected by what's happened with the dollar we've got some supply zones here as well as I guess demand where we are now and demand just below here the pound this week does have some news coming out but last week we did have the UK economy growing for a second month as recovery takes hold so manufacturing and services both stronger than expected and Jan is reading all January is reading also revised up from first estimate so good news there was some good news for the for the pound but we've got some I think we've got inflation data this week if I remember correctly some inflation data and yes UK markets will follow inflation rate and unemployment rate and also retail sales so unemployment and inflation data is going to be key to whether the pound will continue to you know rise and I wouldn't necessarily buy the pound against something like the other dollar I'd probably buy the pound against something like the Swiss Frank for example or or the euro weaker currencies the ones that are really kind of cutting first so I'm not necessarily too keen on trading this but if you are you can look for some long trades even now or just further down if prices come down into that demand zone if you think that's gonna be a bargain for the pound against the dollar if you think that the pound is a sell against the dollar then I think the first area should be really around this one two five seven eights to one two five four two somewhere around there three nines four forties so that's really your options at the moment pound yen the pound yen again if there is some sort of intervention the pound should roll over and I intervention from from Bank of Japan but also as well if there is news supporting lower inflation and higher unemployment then I think that should want to roll over to the downside even further so prices did come up to this area of supply and eventually rolled over but we are in this a bit of an auction now where you've got prices right between here and here let's just use that so yeah prices within this auction here this range and so it'll break out of the range if the if obviously the fundamentals say that prices should be lower this week so if you are looking to buy it now is it actually a decent time technically but if you're looking for continued sales then you really have to look for prices to kind of move up to that supply zone before looking at going short so I draw the supply zone from around there yeah the one nine two one nine two point zero six four yeah we've covered the euro dollar earlier from a from a supply daily supply zone perspective if you are if you missed out on this trade and want to get short on this then you've really got a long way to go right I don't know whether prices are really going to pull back to the 10850s anytime soon of course anything can happen in you know in forex and trading but I don't think anything like that is likely to happen you do have that breakthrough yeah that kind of broke through that level now so I would say we're in a bit of no man's land at the moment probably you could look for if you know how to trade stop hunts and you want to get long on this don't know why you would want to get long but if you are looking for some sort of trade then that's that's maybe just a level that could have the potential to be stop hunting if you know how to trade stop hunts but or in a way that we do right because everyone has their own method of trading stop hunter identifying them but for now from a daily supply zone you really are waiting for price to pull back there or prices to make lower highs and lower lows and then for prices to pull back so that lower high because then that would be a level of supply so right there would be what you're looking towards in terms of going short and that's really the direction of travel the euro and really the run of the biggest bigger reasons as well for the euros decline across the board is that euros five month low fuels talk of parity on ECB Fed split right so strategists see drop to 105 or lower before ECB June meeting and escalating geopolitical risks add to euro dollar downsides as I was saying before about you know with the Iran Israel tensions the dollar ads is used as a safe haven currency whereas the euro isn't and also as well the fact that the Fed are now likely to cut in September whereas the ECB likely to you know cut in June there's a bigger divergence there right in terms of you know leading who's leading and who's lagging as I was talking about the beginning of this video this analysis so that's what's being priced in the the the the fact that the the European central bank are likely to cut first by several months before the Federal Reserve so that's why you've seen the move just sell off like this and yeah that's pretty much it for me the euro is definitely not a buy any time soon Euro yen finally rolling over made a bit of money on this to took some some profits off and just waiting for really one more position to swing trading one position now so yep decent decent decent trade finally played out took a while to play out took a few weeks matter of fact but ultimately let's see what happens so again I would more likely be short on this if it do get a larger pullback look for them put another entry or maybe even if you get a stop on above that level that'd be what I'd be looking for to re-enter into a short on this trade because I really don't think prices are gonna go any higher than that at the moment doesn't look like it anyway so that's where we are and if you are looking for a buy trade you can look for a buy trade right now as we are in that demand zone if that's it's Pete that demand zone there so can actually delete that and look for any kind of trades from from now sorry from now if you are looking at buying the the euro against the yen euro pound so again depending really what happens this week with the pounds I think there is an opportunity potentially actually if you were gonna buy the euro it may be against the pound if the pound has some bad news so that could be a decent air to look for a trade you also have a bit of a stop hunt below these levels so that could be actually a decent trade to the long side if it does stop hunt but euro pound I would think that if the if the pound data is positive in terms of the the Bank of England holding rates for longer than the Parfoulis resistance should really be to the downside so you should look for I would say probably more shorting opportunities on here so wait for a pullback up into a zone and then look for a trade right there so that would be there actually matter of fact there is a supply zone right there so that'd be the first supply zone you'd look towards to try to work short this currency pair based really on the data Aussie dollar US dollar so this is sold off a bit again the US dollar being the the stronger out of the two at the moment so that's really where you're looking at the latest demand zone another demand zone below there in case you are looking to buy this currency pair I'm not looking to buy this at all or even trade this I think there's much better pairs out there but if you are one of those people who want to get involved in this even long or short these are the levels that you're looking for either a you know for probably a buy trade right now technically that's actually very nice I do like this is what's known as a capture paying relief trade but again there's no point in taking technical trades against fundamental analysis makes no sense especially when you've got you know two currencies that quite that looking to cut rates at the same time so you could look at this as prices could want to auction meaning they could want to range but yeah I'd rather look for clearer divergences so if you're looking for a buy trade that could be one are we looking for a sell trade either in that supply zone or in the higher supply zone but not really interested in taking this at all and then we've got gold gold just kept making new highs again this is from last week's analysis looking for a bit of a pullback if you were looking to buy gold we've had this large bearish pin boss so that could be something maybe could be profit-taking who knows right but at the end of the day gold over the medium to long term should still continues to be a buy there was some analysis on gold it says gold slips after topping two thousand four hundred dollars an ounce as rally is seen oh as over extended so we've got again Israel braces for political retaliatory retaliatory attack from Iran so risk off and traders wage your political tensions with interest rate outlook so yeah gold is really doing its thing but there was something in here and it says that we we do feel that mark the market has become overextended and that will lead to a liquidation selling why so people want to profit take said Philip Newman managing director at consultancy metals focus any liquidations any corrections would be short lived and should present a very strong buy opportunities so basically you want to buy on pullbacks right so so yeah that's pretty much it oh here was something interesting as well the precious metals has no where is it now it says here it's rally and often outside move have left something like this puzzled because of the lack of any obvious triggers particularly the outlook for interest rate cuts by the Federal Reserve has become muddy and recent week so you would really think you know you've got gold moving in the same direction as the the US dollar right so if you zoom out you've had the US dollar index move to the upside right beginning of 2024 right and this is why correlations are never 100% you really should know the fundamentals you can't just rely in my opinion anyway some people do of course good for you but this is where traders typically end up getting caught out because there are times where the dollar right typically inverse correlated pairs or assets and asset classes right can actually still move in the same direction and so you'll see in that beginning of the year you'll see in this beginning of the year right both going higher and so gold is obviously going higher based off of Joe you know political tensions as well as the expectation for rates cut this year but yet you've got the dollar doing the exact same thing right which is again a bit confusing bit baffling as this this article was saying right especially because you know there's no obvious triggers for gold to really continue to kind of you know go to the moon right in terms of you know because because the Federal Reserve haven't cut rates yet in fact they've just continued to push cuts out further and further into the future so yeah it's wanting to highlight really that point that if you are looking at you know things like correlations and price correlations you must be aware of when it's not working because no you know no correlation is 100% all of the time so you know you can buy gold and you can buy the dollar at the moment so that might be a strange one to some but not to me because you know I already know that you know if you if you go into the nuances of fundamentals it makes sense to actually buy both at the moment so there you go for different reasons but if you are looking to be a buyer of gold then you know basically you're looking for pullbacks right pull back into a nice decent demands done somewhere around here or maybe even lower right the lower it goes the more of a bargain it is if you are looking for shorts I would rather wait for prices to kind of prove that there is some strong supply before looking at going short anywhere around here so let's see what happens with gold but again the path of the resistance should be to the upside anyways guys that's it for this week I hope you all have a blessed week and speak to you all soon take care