 Hi, my name's Leon Roe currency trader and trading coach at trading 180.com and welcome to this week's a plan demand forex and gold fundamental and technical Analysis for the week and if you're new a warm welcome to you and if you're returning an equally warm welcome to you and If you are new don't forget to like subscribe and share and if you are subscribed already, please press the thumbs up button to like and Share with your fellow trading colleagues and it gets this quality content the views up on on YouTube and Really the difference between myself and probably 95% of other YouTube weekly analysis traders is that I include fundamental Analysis to the technicals Fundamentals a little understood, but they are very important and they are really the medium to long-term drivers of price If you want to know where prices going in the future and kind of predict trends or a ranging market You have to understand Fundamental and risk sentiment analysis based on inflation interest rates Business cycle and generally monetary policy and then we go down into the technical analysis and use Supply and demand strategies like daily supply and demand zones capture pain relief and stop-hunt strategies And then obviously looking at risk management trade entry and profit targets So this week before we get into the technicals and fundamentals, we just look at the week ahead and Looking at the week ahead the President Biden Joe Biden has passed the 1.9 trillion pandemic a bill narrowly in the house on Saturday and all attention will now move to vote in the Senate investors also turn their eyes to US jobs report You Friday GDP data for Australia Brazil Canada and Turkey as well as worldwide manufacturing and services PMI and monetary policy action by the Reserve Bank of Australia So important for the for Australia is the monetary policy We've got GDP for again for Australia Canada, so the Canadian dollar and Jobs report will definitely be closely watched because if there is you know employment coming into the market Then that is a good sign for GDP and economic growth So the the trillion 1.9 trillion pandemic bill passed So that should stimulate the economy get people spending and the economy functioning again We're going to be talking a bit more detail about the dollar as we get into the the analysis so moving on to the dollar index and the Dow Jones dollar index DXY What we have and I was saying this for the last couple of weeks matter of fact a few weeks is that I was probably more bullish on the dollar in the short term over the next one to three months and It's really because I kind of saw that the dollar Was having some positive news around you know the the the economy and inflation and I think it had really been Sold quite a lot. I do think probably overall maybe the next a medium to long term Time horizons, maybe six to 12 months may want to You know Continue it's down trend, but for the medium to finish work for the short term Anyway, I thought that prices would start to dollar would start to increase in strength and really the Dow Jones dollar index We don't necessarily trade this it's just a measure of dollar strength with regards to Other currencies like the euro the pound Japanese yen the Australian dollar more how we use the dollar index is just to really kind of as confidence So if you do start to see Demand zone the dollar index and prices start to tick higher then you should want to potentially get long on the The dollar, but also as well you have to understand why you're getting high on getting long on the dollar It's not necessarily driven by the technicals it's fundamentals first and in this This Bloomberg article why the dollar is more robust than it looks by Richard Cookson and Richard Cookson Was the head of research and fund manager at Rubicon fund management He was previously chief investment officer at Citibank and head of asset allocation research at HSBC So he knows what he's talking about anyone on Bloomberg will know what they're talking about But in this article, he basically breaks down why the dollar He thought that the dollar also was a decent Well, basically the headline being the dollar looks more robust than it is and really the kind of the pick out of this One of the sentences was that he thinks that the US will grow more quickly Then the rest of the developed world this year and rate expectations thus will keep moving in the dollar's Favour so I could come to this conclusion Few weeks ago, especially against the euro not necessarily against every every other pair But just I thought that the euro was a bit weak and I'll get on to the euro and it's when I do the euro dollar But just some more articles as well after the Federal Reserve Jerome Powell spent two days telling your makers the economy is in no state to be thinking about monetary tightening financial markets Suddenly started pricing in a rapid and perhaps too hot recovery. So that's really what's happening the market the bond market Is pricing in a potential, you know, inflation and recovery and so you're seeing the dollar start to Strengthen especially when you compare it against other certain other countries and currencies and where they are so positive sentiment at the moment, you know by the rumor at the moment the rumor has started whether this rumor will continue You know and has legs. Nobody really knows but while it does, you know, it's by the rumor so the fact It's not necessarily the fact that you know, the dollar will exactly be the the number one You know country and currency in the world and really kind of strengthen and grow that's that's not maybe here and all there But the fact that the market has to price that in or is pricing that in at the moment Then that is where the money is made. So the rumor has started and also another really interesting article from Bloomberg was that traders map out they when central banks finally raise rates raising rates is You know tends to strengthen a Currency and so after sanding shoulders shoulder with with much of the pandemic traders are Preparing for the day the world central banks begin to move apart in policy. So policy Divergences is what we're looking for and these are really good trades is interest rate divergences and Monetary policy divergences. So just quickly this This paragraph so through the little movement is expected for at least the next year Futures markets jest the Federal Reserve will hike rates in late 2023 and the Reserve Bank of Australia in 2024 New Zealand looks ahead of the pack with a hike priced in for late 2022 in Europe and the UK The likelihood of additional cuts is still being debated while in Japan a further move lower remains stubbornly priced in so you can start to see the The divergences in hiking holding and cutting rates So again, you're seeing the dollar start to strengthen as you know, the rumor starts to take hold whether The Federal Reserve will do it, you know or not is again Something different, but the rumor has now started and the dollars probably looking quite cheap at the moment So any pullbacks technically if you get it when it comes to Confluences on The dollar index that's where you know, you want to be looking for potential buy trades If it does pull back if you're looking at still selling the dollar and trying to take advantage of anything technically I would probably say anything around here would be the best area to look for some sell trades For the dollar, but again technical analysis does not stand in the way of fundamental analysis There's no technical supply zone level if this is seen as cheap for the dollar Fundamentally and risk sentiment wise there is no level of supply or resistance or Elliot wave or Any kind of ball in Japan that's gonna stand in the way of what the fundamentals are saying It just doesn't make any sense, you know, then the big money are not technically driven They understand the fundamentals. So and then they you know, basically enter trades technically to see where they are, right? so that's where we are with the dollar index and moving on to the the Japanese dollar dollar yen and if we're seeing some dollar strength then again It's really understanding where the pullbacks are potentially looking at demand zones if you want to get long Here's a new demand zone for the For the dollar yen the game We just saw that the market is pricing in potential growth for the for the US dollar and And the Japanese yen being, you know, not basically there Pricing and I guess more weakness. So again divergences in central bank policy any pullbacks will be really nice Into that zone there for a nice buy again looking at any kind of sell trades fundamentally if you want to potentially take advantage of any kind of Risk sentiment plays. So for example risk off could come into the market Then what you probably want to do is look towards any of these supply zones, but also Look for major areas of support and resistance. So you're probably looking at that zone right there. Let me just put that in Put that in nice gold color So that's probably the top area. So that's listed the 106 6 9 to 107 9 9 area Is probably the area where you're looking for some Confluence within that wide supply zone right there That'd be the area, but I doubt that was gonna maybe hold If again, the money is flowing into the dollar again moving on to the Dollar Swiss again, we're just seeing dollar movement really kind of push higher I had actually got into this trade and took profit Just as it hit the highs here. I'm looking for more Upside so prices do decide to go higher You know, then I'm looking for a pullback into a demand zone and then looking for any kind of long trades from a Again a short trade perspective because again anything can happen in the short term You know, if you do want to get short Then there's an opportunity now to get short or anywhere within this area again I'd probably say the highs of that supply zone because you've got some decent Resistance within that area as well your daily resistance resistance resistance resistance a bit of support there resistance resistance That's definitely gonna be an area where Traders technical traders will look towards You know some sort of trading activity Maybe taking profit etc. But the really the path of these resistance is in my opinion to the upside This is not financial advice, of course. This is just understanding where I think money is going to flow Based on my fundamental risk sentiment analysis, I'm gonna clean up the chart a little bit And delete these no need for this really at the moment So those are the areas that you want to probably look towards if you're looking at any kind of buy or sell trades Moving on to the dollar CAD dollar CAD again the dollar strength coming into the market There wasn't a bit of demand until the shift this week the bond market really pricing in some A Better than expected I guess growth for the US economy. So just move this down there Basically again, just seeing a shift right shift in sentiment So again any kind of pullbacks into that area there that would be a really nice Buy trade and the guys that are in the private discord group We'll also know this to be actually quite a deep stop hunt as well as a CPR zone This was a nice capture pain relief. So if we do get prices pull back into this one 1.2589 level that's gonna be a really nice zone to look for any kind of buy trades Also as well the commodities are selling off a little bit They're pulling back and this is really due to again dollar strength So let's see what happens. But if you do want to get short, you know Now is actually a quite a nice time to potentially get short technically And also as well, I'd probably take my preference to get short on this would be around the you know 1 2 9 a nice fresh area of supply there and even at the 130 zone if prices can get up there And you want to be a buyer of the Canadian dollar that was actually quite a decent zone to look for any kind of Short trades again depending on how the the dollar does and whether the rumor does have any kind of legs to it moving on to the New Zealand dollar US dollar and New Zealand dollar is quite a Potentially a strong currency again. We did read that, you know traders. I think was the article I think I was right here. Nope. It wasn't there It was here talking about New Zealand looks ahead of the pack when it comes to central banks the futures market pricing in a Rate hike, you know, basically for late 2022. So with that being said If you are probably gonna buy the Any currency against dollar it might want to be the New Zealand dollar Even though there is some strong sentiment coming out against, you know Well for the for the US dollar, so if you do want to be a buyer of the New Zealand dollar Then that is going to be the area to look for any kind of buy trades Secondly would be anywhere within the lower end of this demand So where you've got some against some decent support and resistance horizontal support resistance as you know some confluences but again, I think with the sentiment of selling dollars Again anything can happen and this is again, this is not financial advice So if you do want to sell dollars and buy the New Zealand dollar Then that is really the those are two zones to really look for that type of trade And I do think that there probably is going to be some some dollar weakness But I think now sentiment really is with the dollar and I think this now becomes if anything This does become a nice decent short if prices do come back up to these, you know 73 74 areas if you're looking to buy the US dollar, so let's see what happens with that currency pair Moving on to the British pound US dollar and the British pound has really been on an absolute tear you know over the past Since the beginning of the year especially but way back into into May when you think about The reflation trade and how prices have gone higher and the dollar You know if you go back to the Dow Jones dollar index, you'll see how the dollar has been weak but I think now the tide is turning slightly and Fundamentally the the Bank of England and Rate height bets are actually picking up Leaving options trading traders wanted more and unimaginable just six months ago investors are piling in to bets that will pay out if the Bank of England Raises interest rates for the first time since 2018 so you've got some really big money smart money options traders looking at potential rate hikes And also as well you've got UK money markets and a longer wagering on Bank of England rate cuts so market money markets are no longer betting on the Bank of England rate Rate interest rate cut as a surge in bond yields worldwide sharpens investors focus for a global economic recovery so The pound really did benefit and was benefiting from the vaccine rollout the vaccine rollout is just basically The fact that the country was really ahead in Deploying and vaccinating in a population we should lead to Normality within the economy and then therefore they're ahead or should be ahead the idea goes that For the economy right because you know people can get back to jobs and doing what they want to do rather than Staying away staying home because of the virus spreading now whether you believe that is true or not I guess it doesn't really matter It just matters that the weather than what the market thinks and if that's what the market thing was and you can see it Really play out that's basically the trade and that's you know the UK are ahead when it comes to vaccinate in their population when it comes to when in comparison to the US dollar and the and the you and Europe so This is why you've seen this this trend here The market pricing in the better than expected growth From a GDP perspective, but now we have the power sorry the US dollar now looking to actually grow Now the market has to reprice the exchange rate and the value of the British pound against the dollar So what you might see is you know Maybe a bit of a deeper pullback before looking at getting long here or long here if you want to buy the dollar for me I think the I think a dollar trade if prices can come up to these areas here I think that's actually going to be a decent trade to the downside I do like that But again to probably strong currencies competing with each other So we should now enter into a ranging market when you have a weak currency versus a strong currency or when I say a strong currency when the sentiment is for to buy the The pound and sell the dollar This is what you get and they're not doing that again because of any technical reasons. It was this is all fundamentally Driven so those are the areas that you're looking for for buys and sells moving on to the Euro dollar and Euro dollar I managed to get in short up here right at the top and if you watch last week's Analysis I was saying I was actually quite short on the say short on the euro and buying the dollar I Managed to get a couple of trades in here make made a bit of a two-to-one on this trade here and Also as well within this pullback here as well So over the past couple of weeks the your dollars been decent for me and now I've got into, you know that's this trade around here and Really nice to downside so far looking to hold this now while sentiment is actually with this trade So we're going on to Europe. So we've got a strong Europe also, I say say strong dollar sentiment, but again the divergence between the dollar and the euro is actually apparent because treasury you Treasury pain is starting to hurt Europe. So for ECB members have recently said they're monitoring rising bond yields Those words are not enough. So the reflation trade, which is what the theme is now reflation Economic growth the reflation trade that's driven the ten-year Treasury yield to their highest level in a year Is causing real pain in European bond markets with the risk that higher borrowing costs Will hinder efforts to rehabilitate the pandemic stricken economy verbal intervention by the European Central Bank has thus far proven Ineffective in capping levels or explicit action may be required. What do they mean by more explicit action? Basically? Put a yield curve control more quantitative easing more bond buying to keep the the borrowing costs down so that is more money printing devaluation of a of the currency so the Europe European Union in the eurozone is lagging behind the UK and And the US at the moment. So this now starts to look like a really good trade at least in the in the short term Probably got my targets somewhere around these lows around this 1950 1 to 0 level I think there was a there was an article I haven't got it to hand But I think it was Deutsche Bank was talking about the dollar You're a dollar going down to actually 119 so there's a target right there from a from a major bank and Looks like that may start to play out Anyways, if you do want to get long on the euro for whatever reason the technical reason then Here is a demand zone prices in that demand zone So you may want to look for any kind of Buy trades within that zone now probably say if I was Looking at this from a technical analysis perspective I would probably say that would be the area as we've got some support support and a bit of support here So where we are now around this one two zero Six to maybe the half number five would be a decent technical buy but again, there's no technical level that will stand in the way of Value and fundamental and risk sentiment so You know pick your poison basically If you are looking for a potential Sell trade, I think a move back up into this Supply zone right here It's where you're looking for and then looking for any kind of short trades Or if you're looking for you're just basically looking for lower highs and lower lows Surprises to make a lower higher than a lower load and a pullback into that zone before looking at getting short Moving on to the Euro yen euro yen there was a bit of a supply zone here I did mark it out, but it was a weak one very weak one I wasn't expecting it to hold and you can pretty much see what happened now the euro yen Again to pretty weak currencies not fundamentally not as clear Even though you're seeing the euro is appreciating against the the the Japanese yen This is actually a decent zone here I think do you think technically I do like it, but I just don't like trading I probably won't end up trading this pair. It's not a pair on my watch list anyway, so Looking at that zone there really nice technically, but I'm not really driven by the technicals So if you do want to be a buyer or the euro against the yen decent area You do want to get By the yen against the euro then really there's a supply zone here, but it's not fully formed You really want supply to prove That there is strong supply there and that would only really happen if you start to see prices, you know Fall away from that and then you're looking for a pullback into that zone And then looking for any kind of short trades in and around the highs Moving on to the Aussie dollar and again Aussie dollar The Australian dollar, I think overall is a buy Maybe not against the US dollar at the moment, but against other currencies I think the Australian dollar is one of the strongest but from you know the the Aussie dollar I do think that The Australian dollar is probably a buy maybe a bit deeper somewhere around these areas here within this 0.76 Cent level to probably the lows of 0.74 But again, this is not a pair that I would really be interested in Fundamentally because you really want to look for Divergences where you see a weak currency versus a strong currency if two currencies are You know picking up in strength. It's harder to actually know where you know The the value is because that's what we're looking for right? We're looking for bargain hunters So if both currencies are looking at you know strengthening and appreciating Unless there's some sort of monetary policy divergence Then you know or maybe risk sentiment divergence, then it's very difficult fundamentally to really want to Look to buy or sell on a particular currency even no matter how nice certain levels look I just won't look for any of those currency pairs So I do think that this area here is actually quite decent for a buy So this where you've got the demand zone, but you've also got a nice Resistance and support zone. So this is zero point seven Probably seven six round number and just beyond that to the seven five Five level is decent Right now Could you take a trade here? Possibly if you get you know, obviously a lower time frame entry that could be decent but again standing in the way of Positive dollar sentiment is is really at your peril. I would say not necessarily the smartest move at the moment Moving on to the To the Australian dollar Japanese yen and we're seeing a repricing now this I Actually like to alongside now. We are in a demand zone here I do like a potential buy here if that doesn't work out. In fact, I think this Area here is actually really nice As you've got some, you know, some decent confluence in there with horizontal support and resistance there So I do think that is really nice for a potential buy If this doesn't work out this this buy for the Australian dollar doesn't work out the Australian dollar has been in a massive Trend again risk on risk has been on Yeah, so in a risk on environment commodity currencies do well and that's why you're seeing this Take place. So for me, I think this trend should still be intact. So I'm looking at Potentially buying again. This is not financial advice for you. This is just telling you what I'm doing and the reasons why but if risk does You know come back off and there is worries about the economic recovery then this Supply zone is going to be quite a nice sort of decent supply zone to look for any kind of short trades and Finally looking at gold and now gold is really taking a bit of a dip. There was a Nice demand zone right here, which in the short term Did look like it was Looking at going higher, but now we've seen again a massive shift in In in dollar strength, so You're seeing gold start to Diminish in price and this is really due to money shifting potentially shifting back into bonds into into newer bonds and higher priced bonds so because bonds pay a yield right so To save haven assets are you know gold and silver and precious metals and bonds and if the money that was in you know in Bonds or in gold matter of fact is coming out of gold and maybe back into government treasury bonds because yields 10 year yields are going higher for example when they're paying a better return then You're probably going to see a shift in that but if we zoom out Which is always advisable if that's the Absolute bargain zone, which is back in 2020 March and this is an expensive area Yeah for gold then we are just really around fair value Between a bargain area and an expensive area 50% is fair value. It's not it's not some magical Fibonacci Level and anything below fair value is what cheap, right? So gold still probably more bullish on gold in the medium to long-term, but from a short-term perspective You probably may see some downside in gold. I do think though gold is still a Buy again medium to long-term and if you start to see Inflation go above 2% I was saying is to guys in the private group a discord group fundamentally. I think inflation If there are worries about an overshoot in inflation then gold should catch a bit again In a sense that inflation is devaluation So the higher inflation is the more currency is devalued So, you know traders want to hedge against inflation by buying gold So let's see what happens with that I think gold is again still medium to long-term buy but short-term sentiment around the dollar strengthening You know bonds now paying a decent a potential decent yield based off of you know economic growth and government debt I think now that the gold may want to be a bit I wouldn't say necessarily short it but again, you can do what you want But for me my options is still potentially looking at buy trades In the short term but not expecting massive moves in gold now to the upside I think gold may want to probably settle somewhere in a bit of a range and then just take advantage of that range Anyways guys, that's it for this week if we'll see if but don't forget to like subscribe and share and If you found the content useful and I will speak to you again Until the next video. I wish you a great trading week