 Hi, my name is Liam Rowe currency trader and trading coach at trading 180.com Welcome to this week's supply and demand for us and gold fundamental and technical analysis First of all my sincere apologies for uploading this a bit late yesterday. I recorded a Sunday video But unfortunately the video got bit messed up. So I had to record this today. So week ahead Monday the 23rd in the United States attention will be focused on critical data points including the Q3 GDP growth rate the PCE price index and personal income and spending followed by key metrics such as Durable goods orders and PMI readings from the S&P global housing market health will also be assessed Through pending and home new home sales and internationally Bank Central Bank interest rate decisions will be key with announcements from the European Central Bank and Canada Flast services and manufacturing PMI's will be released in Australia Japan France Germany in the euro area and the United Kingdom and Australia's inflation rate Germany's LFO business climate and GFK consumer confidence the UK's unemployment rate will also be closely watched So lots going on this week the main highlights being the Q3 GDP growth rate for the and the PCE price index for the US Now We'll get into a bit more of that and looking at the dollar index, which is just a measure of dollar strength against the basket of currencies I believe that the dollar is still a buy on pullbacks reason being would one of the main reasons is that Economists or economists have boosted their US growth projections and reduced recession odds Whoever would have thought right? There's a lot of doom and gloom around What may happen with the dollar, but at the moment it does look like the dollar is economically strong enough To keep rates highs so economists boost Q3 growth Projections on stronger consumer and Bloomberg survey respondents see higher rates for longer And so it says economists have raised their US growth projections through early 2024 and trim recession odds To a one-year low as consumers continue to spend so if we zoom in a little bit more we can see that Wall Street It says Wall Street grows Increasingly optimistic on outlook and it says here from the September survey in Q3 The economy was expected to grow 3% but now it's at 3.5 percent. So Interesting fourth quarter as well as is growing a first quarter as well So if the US actually do avoid a recession that should be supportive of for for the for the US dollar And although they might necessarily high crates They're holding rates potentially holding rates for longer And so that all kind of adds up to a potential stronger dollar now doesn't mean that this week dollars gonna go higher right no one knows week to week but the overall Move should continue in terms of if you're looking at this from a trend from you know the July until now we could see obviously pullbacks where I people buying investors buying cheaper You know maybe taking some profit on the dollar at these highs And then any pullbacks I think are definitely buying opportunities And if prices go higher then just look for pullbacks into demand zones before looking at going long And that's just my bias and not necessarily financial advice of course So dollar still a buy for me dollar yen The dollar yen grinds higher and as it grinds higher There is still the chance of a Bank of Japan intervention at 150 meaning that the Bank of Japan Could step in to try to prevent their their currency from getting More devalued and you see here that the Bank of Japan may review yield curve control policy As rates rise the Bank of Japan officials are pondering the question of whether to tweak the settings of the yield curve control program as Domestic long-term interest rates float higher in tandem with those in the US and the Nikkei Newspaper report on Sunday without saying where it obtained the information and basically yield curve control is Central bank policy measure that is designed to Devalue a currency and so if they start to reduce or remove yield curve control The effect of that should be that the currency will or should appreciate so At the moment, this is basically maybe what's preventing prices going too much higher for now Also as well, you do have some some banks actually think that there should be The dollar yen should go up to the one five fives But it all depends on how quickly it devalues if it's a slow grind higher then the Bank of Japan may be a bit more tolerant, but If it's if it's a sharp devaluation Then there's likely to be some intervention and a potential change in the fact that the Bank of Japan are talking about a change in your Curve control or there's some rumors, and I know there's been rumors for forever, but The fact that they're getting closer to that deadline I would say be definitely cautious of going short in these areas if I'm going long I'd look for really pullbacks to one four seven fifties one four seven round numbers One four six fifties before looking at going along on that currency pair the dollar Swiss Just pull back to a nice area of demand which has summer Some confluence with support and resistance. We've bounced off of this area here, which is the 0.89 round number In a risk-off environment the both currencies will tend to Appreciate but the Swiss Frank has been the dominant risk-off currency When it comes to the three major risk-off currencies with the dollar the yen and of course the Swiss Frank So Swiss Frank money's been flying into that and you can see that take place not really a pair that I'm interested in But if you do want to look for any kind of long trades, then now is really the time You could look for potential more short But you'd have to wait for prices to pull back up into this supply zone before looking at getting short dollar CAD and the dollar CAD in a risk-off environment the dollar the US dollars should want to strengthen over the CAD yes due to risk-off sentiment and what's going on in Palestine and Israel with Palestine is in Israel you Commodities should want to increase in value But overall from a risk sentiment perspective, you would think that the dollar should be the dominant currency So any pullbacks into demand zones would be where my bias is So pullbacks Is where we're looking at so yeah, that's Pretty much it for the for the for the dollar CAD if you do want to get short on this currency pair Then you are looking at just any moves for probably from now Maybe up into these one three eight one three nine It's also as well. Just going back to the dollar a bit and some analysis There there could be some Some risk-off events and black swan events that do that can affect the dollar at some point but for now Until that actually happens and until those those events do affect the dollar I think the dollar is definitely Continues to be a buy so then the the move any pullbacks. I think are decent for the man zones to be a buy dollar New Zealand dollar US dollar and again in the risk-off environment Added to you would think the US dollar would be the one to to strengthen and it has been also as well last week The inflation report for the New Zealand dollar came out and was lower than expected so lower than forecasted So that took the rate hikes the possibility of a rate hike off the table for now Which basically drove prices to the downside? so move up to this 50.59 a cent area I think is going to be decent for a short trade or a move to the To the 60 cent area also just be mindful of China so China do start to grow They did have some decent news, but nothing Really that supportive, but if China do start to grow again Then that could be supportive of the New Zealand dollar But until that data does support the narrative I think You know the dollar is still the currency to buy and also as well We if you are looking to be a buyer there is technically a decent level in and around the 60 Just where we are now matter of fact, but again You really have to expect even a dollar to get weaker or the Order New Zealand dollar to get stronger, and I think my money's on the US dollar getting stronger pound dollar so pound dollar There was some data that came out wage growth easing In the UK and this is a sign of labor market cooling and so private sector earnings growth Also moderates to 8% in period and the Bank of England wage growth for signs of persistent Inflation so UK wage growth Slipped in the three months to August indicating a cooling of labor market pressures That will make it easier for the Bank of England to keep interest rates on hold next month So interest rates staying on hold Is not necessarily, you know supportive and even though it's it's up against the dollar who are likely to also hold rates There's a differential in terms of the economy So there are stagflation fears for the for the UK stagflation meaning that you have Higher inflation but a contracting economy so but if inflation is coming down then that kind of Eases the pressure on the Bank of England on our high crates But I think the US dollar and the US economy is in a better position and the Fed are in a better position than the Bank of England So I think any pullbacks this week into these areas I think they're going to be nice opportunities to continue to look for short and less of course Things change around for the dollar in terms of maybe not some great news And then you might look for want to look for a buy into in these areas Looking at the the pound yen and in a risk-off environment You would expect the pound really to devalue against the yen The yen hasn't really been acting as a risk of currency and it hasn't acted as a risk of current risk of Currency for a very long time for a couple of maybe about a year or so, but it has its little I guess spells of risk off Really, it's been the the US dollar and the Swiss franc so far, but I think The If I was looking to get short on this that it would be around these 183 Area just maybe just below it to the wall's this this this high here This week most recent daily high But if you do want to be a buyer of the the pound then the first area to look for any kind of bias would be the 180 181s and then maybe down into the ones 180s here and then the 178s those would be the levels that I would look towards But from a risk-off perspective, you would think that any pullback should be shorting opportunities Going to the euro dollar euro dollar Definitely a pivotal week for both there is the European Central Bank announcement and whether they're going to Look towards hiking rates or at least be a bit more hawkish And so I think any moves in this I say moves, but any Opportunities to shore I think a decent There was an interesting article that came out matter of fact And it was saying that Europe's biggest money managers bet on higher ECB rate LG I am vanguard and Rebeco Anticipate and additional tightening and worn on front-end debt see Italian spread spreads at risk from hikes And so some of the biggest money managers in Europe say traders are wrong to bet the European Central Bank It's done hiking rates as a net energy import The region is particularly exposed to rising prices if the crisis in the Middle East escalates and Markets are underestimating the possibility of additional time in response to accord in response according to legal in general investment management Vanguard asset management and Rebeco Group that leaves short maturity Government bonds particularly vulnerable and this clashes with swaps pricing that shows a pause from the ECB virtually baked in this week and only 10% chance of a 25 basis point hike at a Subsequent meeting in the US swap show a 40% chance of another quarter point hike from the Federal Reserve So you can see the difference And what the market is thinking of course the market can be wrong and if it is then it will rule Then it will reprice but one of the reasons why and I'm not necessarily, you know Want to go against, you know, you're its biggest money managers, of course, but one of the sticking points in The reasons why the European Central Bank or the market is really thinking that it won't hike rates is because Well, one of the reasons is Germany as well. Germany's year of frailty is seen ending in double-dip recession. So hiking when you've got Germany which is Europe's economic engine potentially going into a recession will only make things worse So it says here Germany won't escape a second recession this year as the economy long seen as Europe's motor Limps through persisting industrial weakness according to forecasters. So Yeah, it doesn't look good for Germany at the moment. And so that's the reason why the market is Thinking that they will potentially hold Rates, but of course if inflation comes in higher due to higher energy costs There is obviously the possibility that they could start to hike rates But we'll see what the what the European Central Bank says this week. And if it is a bit dovish Then you're likely to see prices move to the downside if you know prices do come up to the 106 is 107s I think that's still going to be shorting Opportunity or territory. I do think that's a really nice area to look for some short trades Unless of course the European Central Bank are really really hawkish And there's some really good data that comes out of Europe supporting rate hikes for the economy Euro Yen and again European Drifted slightly higher this week and it depends upon obviously what happens I think in a risk-off environment the yen should be the currency to strengthen But at the moment that that doesn't seem to be happening and And if but if you do want to be a buyer of the of the euro I would say basically a pullback to this area where you have Level of support at the end of a decent demand zone that's led to a new high I think that's to put in the first area to look for any kind of long trades But my bias personally would be to actually look for some short trades In and around these highs and let's see what happens around there Euro Pound euro pound again and really nice accurate and obvious level in a supply zone That is brilliant so technically but again fundamentally the both currencies are a bit Difficult to read because they're both both central banks are holding rates and they've both got their economic problems as well So although this is a nice short This could just be profit-taking I know probably a lot of traders ended up going Short here on that daily pin bar on a Friday where that could just be end of the week profit-taking right but let's see I Think the pound may have a slight edge over the Bank of England But but yeah, I would really kind of expect prices to potentially move to the downside Depending on what happens with the ECB. So I think definitely looking at You know this week where you've got news that could potentially move the market That's going to be it's going to be a turning point based on what happens fundamentally If you are looking to buy the euro then a bit of a pullback into this demand zone here It's going to be a decent area to look for some long trades Aussie dollar and the Australian dollar against the US dollar You would think you know the US dollar would be the stronger out of two and it's proving so, you know, so at the moment so a pullback into the highs of this demand zone is just under the 64 cent area or up to the 64 20s will be where you want to look for the potential For short trades. I think that is the sound right there. Yeah, so that's where we are Again to buy the Australian dollar There are currencies that you could probably buy it against but I wouldn't necessarily against the US dollar so But there is a nice technical level we can see here that's kind of bounced off it but the more times a level Touches and gets rejected and revisits and tests the weaker it does actually become but again It depends on what's happening this week with regards to Some news which we have inflation rate year-on-year The forecast is for 5.3 percent if it comes out at 5.3 it will show that inflation is coming is going lower Which then? Basically takes rate hikes off the table, but if it comes in higher than forecast then that may prove That the inflation is a bit stickier and the Australian central bank the RBA may have to Continue hiking rates or hike rates at least one more time to try to get inflation down To their 2% target and of course we have fed chair pal speaks on On these days as well GDP growth rate as well as a personal spending and core Inflation so lots going on this week And then the Australian dollar Japanese yen again risk-off environment. You think that prices should want to fall Right now and any pullbacks should be potential buying opportunities for the yen I think of any kind of reversal may happen at these 93 area just below that But again that would probably have to be driven by less risk off and also as well China Growing so decent areas to look for potential buy trades There is a level at the 94 round number as well that you may want to look towards Seeing if there's any intraday Opportunities to buy the Australian dollar if you think that the Australian dollar is going to be a bargain down here But I think in the risk-off environment the yen should want to be you know strengthen and also finally the gold so you've got gold against the dollar rising and rising And last week we did have I think a supply zone around here, but prices basically just broke through it And as I always say, there's no technical level That's going to stand in the in the way of fundamental analysis And the sentiment is that's what really drives the market. So any pullbacks into This demand zone I think is going to be a really nice Trade technically Also as well, I know many traders do Think that gold and the US dollar are Basically inversely correlated if gold goes up the dollar should go down and if you know gold goes down the dollar should go up That doesn't happen all the time What in certain environments the Gold is obviously a safe haven asset, but also the dollar is a safe haven currency. So you can get situations where gold and the dollar can go up and In a risk-on environment where money comes out of the dollar into commodity currencies and also Comes out of gold into, you know, it goes into stock markets and bonds where they can get a higher return and yields Gold goes down as well And so, um, yes, we do know that they do Inversely correlate, but also as well There are environments that you need to be aware of where both Can be buys and both can be sells. So just because, you know, you're going to go long dollars Doesn't mean you should short gold if you're going to go launch gold that you should short dollar Because in an environment that we are in now Both can actually increase in value But if you are looking at gold in a risk-off environment, it's just a case of Will this appreciate more than the dollar will in this environment? So, yep, I think that's the really nice area to look for any kind of long trades And if you are looking for short trades An anticipation of maybe some peace or de-escalation in In the Gaza Strip then Really, this is the this is the putting the time now or maybe just above this area at these highs right here Anyways, guys, that's it for this week. I hope you enjoyed the analysis Again apologies for it being late and I hope you have a great trading week. Take care