 Hi, my name is Liam Rowe, currency trader and trading coach at trading180.com. Welcome to this week's supply and demand forex and gold fundamental and technical analysis. If you find the analysis that I provide every Sunday of use, please don't forget to like, subscribe and share the content. And so let's get into some of the fundamental developments in the coming week, as well as some in-depth technicals and fundamentals a little bit later. The key events in the developed markets, developed markets, the G8, G9, G10 countries next week. All eyes will be on the European Central Bank meeting next week. So they think this is ING, by the way, think.ing.com, in case you want to have a read of it. We think a 75 basis points from the European Central Bank looks like a done deal. So probably been priced in at the moment, that 75 basis point. The PMI survey on Monday will also be closely watched, providing clues on whether the eurozone economy has contracted even further. Now, you know, rate hikes are usually typically positive, but not positive in if the economy is going into a potential recession. So let's see what happens there. For the Bank of Canada, we expect a similar 75 basis point rate hike. The Bank of Canada will be hiking rates, given the upside surprise in inflation. And in the article, they talk about the Fed can't slow the pace of hikes just yet. And this is really because of inflation still rising or being sticky as the term Canada. A 75 basis point hike is most likely outcome. UK markets looking for clarity on fiscal plans and government stability. And the eurozone, the ECB to high by 75 basis points again, amid ongoing inflation concerns. And so there's some analysis here, which I'll get into maybe a little bit of it. But again, you can go to I'll post the actually the link in the description in the description on YouTube. So it says the Fed cannot slow the pace of hikes yet. There are lots of important numbers for the US next week, but none more likely to change the markets forecast of a 75 basis point hike on the 2nd of November. Q3 GDP is likely to show positive growth after the technical recession experienced in the first half of the year. And those two consecutive quarters of negative growth were primarily caused by volatility in trade and inventories, which should both contribute positively to the third quarter data. Consumer spending is under pressure, though, while residential investment will be a major drag on growth. We are forecasting a sub consensus 1.7 annualized rate of GDP growth. So should be positive for the for the US, Canada, more hikes likely to come. So it talks about a job creation has also returned and consumer activity is holding up. So we agree that 75 basis point hike is the most likely outcome having previously forecasted at 50 basis point hike. So more hikes to come. The UK, you know, lots of political uncertainty around the UK, this trust being the shortest prime minister in UK history. And I'll get into that a bit later as well as the Eurozone as well, having their 75 basis points and pretty much again, it's it's it's it's hard to see how the ECB cannot move again by 75 basis points at the end of the week's meeting. The 75 basis point hike looks like a done deal. All eyes will be on another more open issue, excess liquidity, quantitative tightening and the terminal interest rate. And so, yeah, there we are. Let's get into some of the charts starting off on the dollar index. Dollar index is a measure of the dollar strength against various currencies like the the Euro, the pound in the end. And so for me, my bias is still to the upside. Still, it's been like that pretty much for the whole year. And you can see obviously zooming out what's happened here today since this year start of the year. And I've been saying, you know, long dollars, long dollars, basically what's been happening. And so again, not financial advice, though, just, you know, giving you the observation and my bias still hasn't changed for now. Although there is, you know, on the horizon, there could be a change, but not not not yet anyway. And I think any pullbacks on the dollar are still buying opportunities, whether it's going to be at the 1010s, 109s around the 108s. So for me, again, it's just looking for buying the dollar for cheaper. And one of the reasons why there could be a potential for the dollar to to be a sell at some point would be the Fed officials are talking about a debate on rate peak and when to slow hikes. So hiking, rate hikes and rate cycles, interest rate cycles, moving cycles. So you've got to, you know, central banks don't hike forever, right? They hike, then they hold, then they cut, then they hold, then they hike, depending on what is going on with inflation and the economy. So Bilal sees minor moves once rates reach appropriate level, which is known as, I think, a terminal rate. And I think that's somewhere between 4.5 and 4.75 and daily sees Fed shifting to smaller increases as peak rates near. So the central bankers, US central bankers will set the next phase in their campaign to curb inflation will be to debate how to raise interest rates when to slow the pace of increases. So again, that's the cycle, right? They're going to have to slow the rate of increases, rate hike increases at some point. So St. Louis, Fred, President James Bullard and San Francisco, Fred Chief Mary Daley both stressed the need to keep tightening policy with inflation at 40 year high. While suggesting more caution next year. So for me, unless, you know, if the data does not support the narrative, then obviously the dollar might be a sell. But as long as the data supports the narrative of rate hikes, then for me, you know, the dog with the least fleas, the best of the worst is the US dollar for now. So even though price might come down, you know, over the week or two, I just look at that as buying opportunities. So let's see what happens there. If you are looking to sell the dollar, then the, you know, you've got supply zone there at the moment. If you see, you know, prices come up for, you know, to the one 14, then maybe you want to look to short there for me, my bias is to the long side. So I tend to ignore trades that go in the opposite direction to what the way that I want to trade is no point because no technical analysis level was going to stand in the way of a of strong fundamentals and risk sentiment. Looking at the dollar yen, I'm very interested in the dollar yen or the yen. And on Friday, late on Friday afternoon, we had the rumor that the central bank bank in Japan were intervened, right? And it's not really confirmed yet. And if you don't know what intervention is, central bank intervention is central bank intervention just basically is the key takeaways. And you zoom in is a foreign exchange intervention refers to efforts by central banks to stabilize the currency. Yeah, so destabilizing effects can come from both market or non-market forces. And so the market has been, you know, market or non-market forces have been really devaluing the Japanese yen. This was the line in the sand, but in September, they intervened here and called like the one for five area was pretty much the area that they thought, you know, they didn't want the yen to devalue by and the pace at which the yen was devaluing. And so they intervened here. Now, I didn't have much of an effect on the dollar because the dollar is quite strong. And what you've seen is, you know, market forces and non-market forces push prices higher or the entity value even more when they intervened here. So then, you know, the central bank has really kind of intervened at the 150s, 151s, right? And so actually the 152s. And so, oh, I see the rumor that they have matter of fact, I can't confirm that they have because the room is the rumor. And and so you're seeing this and, you know, in the group in our private members discord group, we were talking about this. This was on the Friday morning. I was saying, look at the acceleration of the U.J. Currently, the faster the devaluation, the more pressure for intervention. And and so, you know, posted a chart. And so, yeah, there was a lot of pressure on the on the bank in Japan. Right. And so, you know, we was watching this and managed to get in matter of fact on this and buy the yen, not against the dollar, actually, against the pound. So it was a nice set up in anticipation of this intervention on the pound yen and up a few, quite a few hundred pips at the moment. So, yeah, you know, we saw we saw this, you know, play out and, you know, technical analysis traders. If you're only trading technical analysis, you know, you're never going to know these things are actually in play. Right. And and so, you know, talking about, you know, technical analysis and really just being kind of a bit single minded in a term of in a sense that, you know, again, there are things going on beyond the price chart that you must be aware of. If you are, you know, interested in learning a bit more about that, then we have a webinar free webinar for you to join on the 4th of November, 7pm London time. And it's really hard to trade fundamental strategies, as well as a smart money market maker concepts for the ultimate trading combination will be presented by myself. And Mark Chapman, Mark is a brilliant mind and taught me a lot of things that I know. And so, yeah, I think if you are struggling with fundamental analysis or want to know more about fundamental analysis and really how to apply that to and talk about smart money concepts, I know that that that term is being used all over. But, you know, Mark will show you really the real market makers business model, because at the end of the day, that's exactly what it is. And combining the two for a really, really, really, really powerful way to trade. And really, it's evergreen, right? Because these things are not going to trade. These things are not going to change. And even if they, you know, did change because you understand how it works, you would understand why and you would always be aware of any typical, you know, or any changes to, you know, fundamentals or even, you know, market maker strategy. So the link is in the description box below. I highly, highly recommend that you join, if you can, not sure if it will be recorded. But if it is, then probably maybe send it out to those people who, you know, missed it and maybe requested it. But let's see. I don't know if it will be recorded. So definitely see if you can join before you do join as well. Or please watch this webinar, which is on YouTube called the Fundamental Analysis Webinar, Three Steps to Generating Profitable Forex Trade Ideas. And so this will give you a really basic understanding of how interest rates, inflation and GDP works in correlation to generate the best trade ideas. As I'm not really going to go over this type of stuff. If you don't know this, then it might be a bit difficult for you to understand what I'm talking about with the fundamental strategies on the 4th of November. So please watch that before attending. So let's get back into central bank intervention and the foreign exchange intervention voted by the Bank of Japan. And I mentioned that it was a rumor because on the 22nd of October, this report came out on the 21st of October. And it's always talking about the yen sword the most against the dollar since March 2020 as Nikkei reported, Japanese authorities intervened the game to prop up the currency. But when asked later on on the next day, the Japanese Prime Minister said that when asked whether Japan had taken any action on the currency on Friday, because she said we won't comment on whether the government has intervened in the market. So it is actually still a rumor. My best guess is that they did, but and if they have and then you probably may see some follow through. If they didn't, if they haven't, right, then you could see actually prices start to come up, right? And then, you know, still push them again and test them for another or for them to actually intervene. And really this, this move has been, it's happened simply because the dollar really is the dominant currency when you look at it from a fundamental perspective and monetary policy perspective. So let's see what happens. We did get, you know, obviously this move here and then it literally went to the upside. You know, some technical analysis traders might say, oh, the same thing happened there. It didn't work there. So why would it work here? But again, you have to understand what's going on behind the scenes in order for you to make that decision. You couldn't just base your, you know, your long trading based off of just, you know, because it happened here. It must happen here because you don't know how much more they're intervening, right? And whether that is really the line in the sand and they're not willing to tolerate and that whether that is the ceiling. But you only know that if you do a bit of reading. Anyways, let's move on. Actually my fact now I won't move on just yet and just clear the chart. And so for me, not against the dollar, I'm not really a buyer of the yen against the dollar, but I will be a buyer. I am a buyer of the yen against weaker currencies. If you do want to get long on the dollar, there's a demand zone. If you're looking for, if you feel that you missed this move and you want to get short a pullback into the 150s, 151, 152s would be the area to look for some short trades and buy the yen. Moving on to the dollar Swiss, zooming out a bit. We've had this spike up above the area. And if you believe that the Swiss franc is a bargain price, then, you know, any pullbacks to this area here will be decent for a sell. If you are looking at buying the dollar, then any pullbacks into, you know, this wide zone of demand. This would be the area to look for buy trades. If you're, you know, worried about where to buy, then just break the zone down with horizontal support and resistance areas. And as well as, you know, round numbers would be decent as well. I think the best areas to look for buy trades, if you are looking for a buy trade on the dollar, dollar Swiss is going to be the 90s, eight round number, 9750s towards the lower end of this, of this demand zone. So I'm not really a pet that I'm interested in trading at the moment, but if you are, then those are the areas that you want to look for buy trades. Looking at the dollar CAD and the Canadian dollar looking to hide by 75 basis points, but so are the Federal Reserve. So for me, I tend to look for divergences or convergences, right? Fundamental convergences and there are none between the Canadian dollar. Although the US dollar I feel is probably slightly ahead simply because of a more of a risk off environment and money tends to flow into the dollar over a commodity currency. So this is hence the reason why you're seeing you've seen something like this. So a bit of a pullback into that demand zone. If you're looking to buy there would be the trade. If you're looking to get short on the on the dollar CAD at the moment, I think probably anything up to the highs. I think the definitely around the 139, 140s is going to be the better area to look for any kind of short trades. Moving on to the New Zealand dollar, US dollar and again, zooming out for the year to date. You've seen this large trend to the downside. And again, that's really because of more risk off environment and dollar really being a dominant currency. So you've seen a bit of a pullback at the moment up into a decent area of supply. That could be the area to look for any trades if you feel that the US dollar is a bargain here. Or the next level up will be the 60 cent area. If you're looking for buy trades, any pullbacks into this zone around a 55 cent round number will be a decent buy. But I think from a risk off perspective, the dollar is the buy continued to be the buy also as well. If there is a double sentiment around the US dollar, you could see a bit of a larger pullback. Moving on to the dollar, pound dollar and the pound is going through a lot of uncertainty at the moment. I mentioned before that the UK Prime Minister, Liz Truss, pretty much had to resign or she resigned. And now charting the global economy, the UK recession awaits Liz Truss's successor. So escalating inflation, higher borrowing costs and likely recession are in store for Liz Truss's successor as Britain's Prime Minister. The UK consumer prices rose 10.1 per cent last month, the first double digit reading in four decades. And energy costs are set to soar further this winter, euro area inflation just managed to slip below the 10 per cent mark. And the bloc's economy is seeing shrinking next year, led by contraction in Germany. And this is here are some charts that appeared on Bloomberg this week on the latest developments in the global economy. So in the UK quarter on quarter, they're forecasted to kind of go into recession third quarter, fourth quarter to negative quarters of GDP growth, a considerable recession. And so, you know, it's there are definite, you know, major issues in the UK inflation is to four year highs as well. And so you can see the comparison when it comes to the euro area, Germany, France, Italy and Spain talks about, you know, the contraction in the euro. And yeah, just problems not only in Europe, but more specifically in the UK. And so for me, the pound is still a sell and the UK credit score outlook revised to negative by movies on political drama. So the outlook for the UK's credit score was revised to negative by movies investor service, which recited factors including increased unpredictability in policy making, you know, the markets like a certainty. And so with a lot of uncertainty, they, you know, will not like that. And so any movements in price to the upside, maybe just some sort of sentiment liquidity hunting, etc. But I think overall, any pullbacks will be short trades. I'm actually in this trade from here, taking positions off the table. I'm in a small position at the moment and it just pulls back then, you know, I just lose that small position. But overall, I'm going to be up on that trade that would have been a profitable trade, but any pullbacks, I get stopped out. I'm definitely going to re-enter to the short side anywhere around, you know, that one of the beans and above there, I think is going to be really nice for a another short trade. Hopefully trade it down to the 105s. If the UK can't get their act together. If you do want to be a buyer of the pound for whatever reason, then I think probably the areas to look for buyer trades going to be there. One second, one second, guys. Yeah, sorry about that. I'm going to be right here and let's just change that to demand and then you've got another demand zone here. So if this was an absolute bargain price for the pound, then I think that's pretty going to be the best area to look for any kind of buyer trades for the pound down at these 104s, 105 levels. But let's see what happens. But I think that the dollar is the currency that should want to strengthen over the next coming weeks. Euro dollar and same thing with the Euro dollar. You think about who's, you know, best placed. I think the dollar, US dollar is definitely best placed. So any price movements to the upside, I think of buying opportunities. The 75 basis point hyped by the Euro has pretty much been priced in, I think. And there might be some positive sentiment based off of, you know, future hikes and as that has to be priced in, but also again, the problem is, is that the economy, right, isn't doing well. Not so hiking into an economy doesn't necessarily have the most positive effect. And in fact, you know, we talk about inflation because it's important to watch inflation because the central bank monetary policy is kind of driven by inflation as well as GDP. But uneven inflation spike redraws Euro zones, east-west divide. And so the Euro zone and the European central bank have a trickier task than other countries simply because they're managing, it's a zone, right? So you're managing, was it 25, 26 countries in comparison to the UK, which, you know, the UK government and bank have to only really, you know, manage their own. You know, one single currency or country as well as the Fed, you know, have to only manage the, you know, the US. You know, in the Euro zone, you've got many different countries that have many different governments who have many different views on policies. And, you know, if inflation is affecting, is affecting one part of the Euro zone, it might not be affecting another. What does the central bank do in terms of, you know, hiking rates and, yeah, very, very uneven, which is always a problem, always a problem for the central bank. It's a really massive headache. And so for me, you know, I wouldn't necessarily buy the Euro. Also, as well, here's some analysis. A strong Euro is a welcome but unlikely development. Again, a strong Euro because of inflation to kind of cap inflation. And it's his wallet. It's true that the ECB is consistently surprised on the hawkish side in the past few meetings. The positive impact on the Euro has been null. So as shown in the table below, the Euro dollar most weakened in the six hours following the last five ECB announcements. So, you know, for those people who like statistics, you know, there is, there is your... This is basically, you know, what has happened. And so, yeah, I know the reasons why that's happened. And again, just for repeats, because the Euro is seen as the worst, one of the worst currency, especially against the dollar as well. So, you know, I expect the same thing to happen. Any pullbacks will be for me anyway, shorting opportunities, again, not financial advice. Moving on to the Aussie dollar. Again, Aussie dollar. I think this move is just really just a pullback. And I think the US dollar should be a buy around here and a risk of environment. The RBA have, you know, turned quite hawkish. I'm sorry, dovish as they didn't. They were expected to hike by 0.75 basis points, but they didn't, they hiked by 0... So, they were expected to hike by 0.5% or 50 basis points. But in fact, they didn't, they hiked by 0.25%, which is basically 25 basis points. And so that was known as a dovish hike. And you're seeing, you know, pretty much this happen. Any pullbacks, I think will be shorting opportunities. Any reversals, any pullbacks will be, you know, down into that 0.62 area if you want to be a buyer. And if that area doesn't work, then you've got a couple of supply zones just above here. And then you've got one here and here as well for you to look for any kind of short trades if you want to get involved in that currency pair. Aussie yen. And so the Aussie yen, yeah, again, the rumors of the, of intervention, you know, obviously, you know, caused the market to, you know, go from 95s all the way down to the 93s. And it's kind of pulled back again. So, again, I think a continuation of this is probably going to be confirmation of the Bank of Japan that they did actually intervene. And you can see, you know, that that would probably be what happened. There's, you know, doji candles is known as an indecision candle. So there's, you know, the market has been, you know, undecided also as well. Friday liquidity, everyone's taking their positions off the table, maybe to re-enter, you know, to go short. So let's see what happens there. If you are looking to go short on this currency pair, any pullbacks, I think to the 95, 50s, 96 areas would be decent for a short trade, for a long trade. Any pullbacks down into this zone here, I think it's okay. But just understand that and recognize that this level has been touched several times. So, you know, the best area to always look for a long trade is the fresh area of demand, which would be around here. That was a fresh area of demand there. And so you can see what's happened. But I don't know whether I want to be a buyer against the central bank really and go against the central bank if they are intervening and gold. And so gold came down into a nice demand zone around the 16, 15 area. Really nice, you know, demand zone, fresh area of demand. Prices pulled back now. Again, just understanding that at the moment, what's been happening is that the, you know, the market is more focused on the return on the dollar, on the yield. And as the Federal Reserve with hiking rates, the market has been more concerned and put their money into maybe getting a yield on the dollar, rather than putting it into a non-yielding asset like gold, right? And gold historically has been a hedge against inflation. But for some reason this year, it really hasn't acted or for at least a good, maybe six months of the year, hasn't really acted as an inflation hedge. But I still think gold is a buy over the medium to long term. And so if you do think that as well, I think this is a great opportunity to look for, you know, buy trades to the upside, especially as the Fed potentially start to look to pivot from hiking rates as well. So they're looking to go from maybe 75 basis points to potentially, you know, 25 and then start to hold. I think gold is then going to come up and especially for inflation, you know, they don't get inflation to come down as much or only inflation to come down to maybe, you know, a 765%. So I think that gold should be a potential buy. But if you are looking to continue to short gold, then, you know, any way up into those 1670 area and especially the 1730 area, this was obviously the best area to look for short trades, fresh area of supply. But you can get, you know, prices can bounce around here as well. But for me, I'm more of a longer time buyer of gold. And so, yeah, let's see what happens from here. Anyways, guys, that's it for this week. I hope you enjoyed the analysis and I'll see you next week and take care and hope you have a great trading week.