 Hi, my name is Leon Roeb, currency trader and trading coach at trading180.com and welcome to this week's supply and demand for us and gold fundamental and technical analysis. Looking at the week ahead, the 8th of October in the United States, attention will be on the inflation report. That's going to be very important. FOMC meeting minutes and speeches by Federal Reserve officials wholesale price data and the Michigan consumer confidence index in China. China will release its trade balance, PPI inflation and inflation rates. That's going to be important as well. Inflation is linked to really how the economy is doing. And while in the United Kingdom will provide monthly GDP figures and that again is going to be important to determine really what the central bank are likely to do. The Bank of England are likely to do with interest rates. Australia will reveal Westpac consumer confidence and NAV business confidence data. And Germany will share insights into its industrial production. And this is from tradingeconomics.com. If you go to tradingeconomics.com, they have more of an in depth analysis on what they think with regards to the weeks news and what may happen. So if you are new as well, by the way, to the mentoring group in this called mentoring group, if you go to the trading videos channel, I have uploaded the weeks technical analysis is about an hour and 13 minutes. Also as well, I've got some fundamental analysis, which includes bank analysis that I don't include in the Sunday YouTube video. And that's the weekly fundamentals plus the weeks, some of the weeks videos as well. So basically, I've got one here how to approach trade entry stockpunts and candlesticks, but one here changing risk reward expectations when fundamentals change or uncertain. And I've got the live group call recording, which was a long one on Wednesday, which was two hours 42. And then I've got some other videos as well, where I talk about the CAD Swiss, as well as the Euro CAD. So lots of videos to catch up on if you haven't done so already. And by the way, if you are not a part of the trading mentoring group, I will reopen it in January 2024. But I know some of you have emailed me asking to join after we closed, I closed on Friday. So I'm going to do a last minute intake. Today, if you email me at info at trading 180.com, and you do want to join, then any emails I received today, then I will give you the details and reply back with how you can join the forest mentoring discord group. If you go to trading 180.com to find out a bit more information about that. Anyways, let's get into the technicals for the week and some more fundamentals. And so starting off on the dollar index and dollars just literally been going from strength to strength. This is no accident. This is not driven just by price action or some Elliot wave, you know, no ABCD 12345 wave. It's really driven by the market, right? And the market's expectation of the value of the dollar. And so for anyone who's been following me for any length of time, you've known that my bias week and week out since around these July, August areas have been to go long in the dollar and you can see it really play out. And so the Fed on Fridays, FOMC report, sorry, non farm payrolls report, apologies, was was pretty much a blowout. So it says here the headline is the Fed will lean towards another rate hike after blowout payroll. So FMC will have option to move again in November or December. Fed will be concerned about a reacceleration in the economy and why are they concerned about the reacceleration in the economy? And that's really kind of down to the fact that they don't want inflation to move away from their 2% target because long story short to get into it too much. But rising inflation is linked with a growing economy. And so actually the Federal Reserve do want the economy to shrink a little to get inflation back down to their 2% target. And so let's read the first maybe paragraph or two. And it says here hotter than expected US jobs report lightly night the Federal Reserve towards raising interest rates again by the end of the year. So non farm payrolls increased 336,000 last month after a sizable upper revisions to the prior two months, a Bureau of Labor Statistics report showed Friday that unemployment rate held at 3.8 and wages rose at a modest pace. And this will keep the Fed very guarded and very much concerned about upside risks, said Luke Tilley, Chief Economist at Wilmington Trust Corp. Because this plays into their concerns about reacceleration in the economy. It sounds a bit strange, right? You'd think that the central bank and the government would want a really good economy. But the more that inflation grows, basically, or the economy grows, the higher inflation typically gets. And then what happens is, is that the Federal Reserve have to end up hiking rates a bit more, which actually may have a detrimental effect to the economy. And they're looking really for a soft landing. So I think in the short term, overall, you know, what that means for the dollar is that the dollar hopefully should want to continue moving higher. I'm not saying it's going to move higher this week. Nobody knows. But overall, I think the trend for a higher dollar is still intact, whether it, you know, kind of bounces from where we are right now in that demand zone, or whether we pull back a bit more and get a deeper pull back and get a cheaper price for the dollar. Either way, I think the dollar is still the currency to buy at the moment. Again, barring some sort of maybe risk event, you know, out of the blue. But fundamentally, the economy is doing well. Inflation is coming down. The Federal Reserve may look to hike rates, looking at the CME Fed Watch tool. And at the moment, it doesn't look like the market has, you know, priced in a rate hike. But the more the data comes out, and of course, we have inflation data this week. So if that comes in higher than expected, you can expect this number in terms of a hike at 27% to definitely reaccelerate to the upside and the market starts to price in a hike, which then means, obviously, I hire a higher dollar. Also, what was interesting was that speculators up to dollar longs ahead of latest US jobs reports the leverage funds increased long dollar bets for the third week, according to the CFTC greenback briefly rallied after hot and expected jobs data. And so speculative traders loaded up on bullish dollar positions ahead of the latest reading of US employment data which showed hiring unexpectedly surged in September. So they basically put them anywhere their mouth was and and yeah, they got the right result in times of the fundamentals. But in price action, it was something slightly different. It was something slightly different in price. And so before I get into that, there is a book I highly recommend. It's called 50 trades in 50 weeks. It's by a trader by the name of Brent Donnelly, who was I think he was a market maker or a head trader for HSBC of works in many different institutions and banks. And on Friday yesterday, many of you may have seen actually price for the dollar spiked down the spike up, right? So pretty much if we go to something like the euro dollar, what you saw is something like on the hourly timeframe where prices spiked down, you're watching this and then it just spiked up above price action. Many traders would be confused by this. And this is something that actually does happen. If you've been trading for any length of time, sometimes these things do happen, right? So you get good news or and bad price, so you can have bad news and good price, right? That's really bad news. Good, bad or bad or good. It's more just to do with the opposite happening or what you expect. And this paragraph kind of highlights it as well in terms of the explanation for it. And in the book, it basically goes on how to kind of approach these scenarios if these things do happen. So it's definitely worth a read and a buy. My theory is that this is just really a stop-hunt. There's a lot of traders that went short here. And personally, I never would have gone, never went short here simply because of the risk-reward ratio, right? So the risk-reward in terms of looking at, you know, trying to go short here. Let's say you press your stop-loss around here, but look at the downside. We know that this is an expensive area, right, for the dollar. And so the risk-reward just wasn't worth it. If your risk-reward is something like this, you know, you're buying up here, then that makes a bit more sense. But not many traders may have got into, you know, pressed sell or pressed short at these areas. I typically wait for candlesticks to close even after the news or I'm getting in before the news. But I wasn't necessarily trading the US dollar because I didn't think it was around these highs, but I do think that we are due for a short anyway, even this week or into the next weeks. And again, it really does depend upon the inflation data and also what happens with the euro. But and I'll get into the euro in a sec. But but I think over the dollar is still a short, regardless of what happened on Friday with with short-term price action. The dollar for me is still a buy. It just means that, you know, pulling back on the dollar just means you can buy it for for cheaper, even though you might have lost a trade or so. So dollar for me is a is a buy. Dollar yen, I think the dollar yen should move up this week or over the next coming weeks. Reason really kind of being main reason is because the Bank of Japan are waiting for inflation, especially wage inflation to kind of go come in higher. And last week, basically, Japan's slower than forecast in wage growth supports B.O.J. So lackluster pay suggests Bank of Japan has to wait more to normalise, basically remove your curve control and raise interest rates and household cut spending again compared to previous years. So one of the main indicators that the Bank of Japan are watching to indicate whether they would want to remove your curve control isn't necessarily moving in the direction to make them want to remove your curve control. And so with that and with a strong, you know, dollar at the moment, I'm not saying again, price can't go down this week. Of course, it can. But if it does pull back, then ultimately, probably you're looking at more buying opportunities. The higher prices go, though, past that one fifty into the one fifty one, one fifty twos, you could start to see more intervention on Monday. There was the speculation that the Bank of Japan did intervene, but they never announced that they did. So the market kind of took that with a pinch of salt. And so it looks like the data is probably going to be more driving the dollar to the upside. But if you are anticipating trying to get short on the dollar yen, it would really be trying to anticipate some sort of intervention, another intervention, you know, towards the one five twos, one five threes as we get to these, you know, these higher areas here. Apparently, Goldman Sachs and some other banks are looking at one five fives as the as the area where the bank might start to intervene the Bank of Japan, Dollar Swiss, Dollar Swiss. And I am actually in this trade long at the moment. So but looking at this from a daily perspective, we did come up to this supply zone, sold off a little bit. The nearest demand zone is all the way down to the to this area here. So for me, out of the two, I'm definitely looking to buy the dollar over the Swiss franc. If I lose this trade, then I'll just look for, you know, continued by trades as long as obviously the dollar and the data supports buying the dollar, right? So just, you know, price actually doesn't always correlate. We're looking for value. And so the more it pulls back because it's been on actually quite a quite a big run. And so I would expect at least a decent pullback to some area of of demand. And that makes that that can make sense. Understand that this is more of an expensive area, a bit more of an expensive area to buy in. But I think if it pulls back to that 89 area, 89, 60s, then I think that's going to be a very nice area to look for some buy trades. Moving on to the dollar cad and the Canadian dollar did actually have some news, some really good news, which could potentially make the Bank of Canada look to hike rates. So Canada jobs gains, triple expectations and wages grew faster. So gains driven by part-time work, educational services and upward trend happening during record high immigration. So Canada's labour market blew past expectations for a third straight month while wage growth accelerated doing little to quels and bets for another rate hike amid stubborn price pressures. And the last I think it was core inflation for Canada did come in higher than expected. So yeah, there was some positive news and I say positive, but some news that basically puts rate hikes on the table for the Canadian dollar for the Bank of Canada. So you can start to see prices did start to obviously fall away a little bit. I wouldn't necessarily trade the dollar cad because both currencies and both central banks are looking to potentially hike rates. So there's not really a divergence there, but maybe the Canadian dollar against another currency that isn't like, for example, or might not like, for example, the Swiss franc would be a decent trade to look for in terms of a long CAD trade. But fundamentally looking at or technically looking at this this area here, I think any pullbacks if you want to be a buyer of the US dollar against the Canadian dollar is going to be the first area to look for. If you're looking for short trades, then you're looking for any kind of pullbacks up into the one three eight one three eight fifties before looking at going short. New Zealand dollar, US dollar. And I think the New Zealand dollar might be on a might start to strengthen. There was some there's been some positive data out of New Zealand recently and the possibility of a potential rate hike. So this could actually be a decent buy, but not against up again, not really against the US dollar. I'm not really keen on buying anything against the US dollar. So if you do want to get and do look to trade this currency, pay I think the highs of this supply zone. And if you're looking for a buy, it's really at the bottom of this demand zone before looking at going long. But yeah, I'm not looking to buy the this currency pair at all or trade the currency pair. Pound dollar, I will continue to short this this this currency. And we've pulled up to a decent area of supply. Where are we now? Yeah, so it's it's decent. It's also got some added confluence when you look back. That area has been traded as support and resistance within that area of supply as well. So I think that's nice. So either if there's some, you know, if there's not any good news for the pound, then I think that should roll over. If not, I think the one to four area is going to be really maybe the the short term limit of this this move to the upside. But again, it does depend on what happens with the dollar and the inflation. If inflation remains sticky or higher, then I do think that the dollar should continue to strengthen. But let's go to some Bank of England news and Bailey Bank Bank of England's Bailey says the job is not done on fighting UK inflation. And so he's trying to sound hawkish. So the Bank of England governor, Andrew Bailey, said the job is not done on fighting inflation, even though he expects those pressures to dissipate rapidly this year. So he does expect inflation to come down quite significantly and quickly. But the problem is, is that there's signs that the UK economy is weakening. That deputy governor warns employment could drop suddenly and slower consumer spending on household goods points to a slump. And so this is from the Bank of England's deputy governor, Ben Broadbent, warns that there are clear signs that interest rate rises are dragging on the UK economy and causing unemployment to pick up. And if that does start to come to fruition, then the upside to the pound really is going to be quite limited. There's no reason for me really to want to buy the pounds. If GDP, the monthly GDP comes out, you know, a bit disappointing or a bit flat. So I do think any pullbacks are really kind of short in opportunities on the pound, dollar, euro, dollar and similar to the pound where we have when you compare really the two economies, the Europe and the US, it looks like the US is, you know, in a much better situation. We have ECB's Vidoroy sees no justification for more rate hikes for now. So this is the French official echoes ECB's Kazimier in discussing in discussing rate peak and ECB vice president says too soon to talk about cuts, though. So they do have a governing council. Let me just zoom in a little bit. So they obviously, you know, vote and you have the Hawks and you have the Hawks and you have the Dubs. And it looks like I don't know whether this is more more Hawks than Dubs, but I'll turn the influence gauge. But it does look like the depending on what happens with the economy, of course, and the inflation coming down. I think, you know, that the ECB are probably more likely done hiking. So if that is the case, then we should get either a pullback into one of these supply zones before looking at, you know, another sell off. And of course, you can add, you know, an area of support, horizontal support, if you want to use that as some extra confluence within those supply zones. But ultimately, my bias is to the short side for now. There could be a deeper pullback, but any pullbacks, I think, for me are shorting opportunities, looking at the Australian dollar and the Australian dollar. I think might be, you know, having a bit of a turning point. And the there was a new governor that's taken the helm. So Australia extends rate pause at Bullock's first meeting to RBA, reiterates some further tightening of policy may be needed. So that sounds hawkish, right? And highlights ongoing uncertainties, including China property woes. So there are risks, and that is China is Australia is closely linked to how China China's economy and how it's doing. So at the beginning, I did talk about the, you know, China trade balance, PPI and inflation rates. And if, you know, those start to be positive and those are good readings, then in fact that should help, you know, Australia as well. So it says here some further tightening of monetary policy may be required to ensure the inflation returns to target in a reasonable time frame. But that will continue to depend upon the data and the evolving assessment of risks. Bullock, who took the helm just over two weeks ago, said in her post meeting statements. So she's come in and she's pretty much said she is willing to hike if necessary, if the data does support hikes. So it's all about looking at any data, like jobs and inflation and the economy that does support rate hikes. And if they do, I think the Australian dollar could be a buy again, not really against the US dollar, maybe against something a bit weaker, like, for example, I don't know, the Japanese yen fundamentally, and maybe the Swiss franc. So that could be a nice buying opportunity for the Australian dollar. But Aussie dollar, I think if you're looking at sell trades, you're really looking at this area here or a fresher area of supply. If you're looking at looking to buy, then there's obviously some demand around here. But the dollar is going to be a very difficult sell at the moment in my book. So nothing there and gold and gold. I was saying in my last weekly video, which wasn't last week, but the week before, which was when prices were somewhere up here and really explaining that gold is likely to have a tough time simply because you've got higher treasury yields, right? So treasury yields are higher. You've got higher interest rates on the US dollar as well. And obviously the dollar and gold move, typically move inversely. So if you've got 5%, if you get 5% for just holding the US dollar and then, you know, depending on whether you're holding a two year or 10 year, you're looking at somewhere between, you know, maybe something like 4.5 to 5% as well. On the US treasuries, right? Then because gold doesn't pay a yield, it's going to be very difficult for gold to really, you know, stay stay a bit basically and stay a buyer. So this is the reason why you've seen this kind of drop on gold. We've come down to the 1820s. We could even see this is like a key level, but we could even see prices drop a bit further. There are levels of demand around here. But yeah, it's going to be difficult to buy gold at the moment. I think you definitely need some sort of trigger or some sort of sentiment to change against the dollar, maybe some some fears around the session coming into play, which doesn't look like it. But, you know, or some something out of the blue, I'm not too sure what it could be. But but at the moment, it does look like the path of these resistance is to the downside when it comes to when it comes to gold. Also, as well, you do have, I think that is like some hidden supply there. Yeah, it looks like hidden supply. So this would be the first area to look for some short trade if you were looking for a short trade right there. And of course, that's that's you having the bias that the dollar really is a buy. And if the dollar is a buy, then gold is a sell. If you think the dollar is a sell, then gold could be a decent buy at this key area of of of demand, as well as support and resistance. So you can see where the institutions have been trading that area and fought that the 1820s to 1800 area is an area of of value. Anyways, guys, that's it for this week. And yeah, again, just a quick reminder that if you do want to join, you know, this the last intake really this year is going to be today by the end of today. If I don't get any emails or if you email me tomorrow, unfortunately, I'm not going to be able to accept your application. So just email me just saying that you're interested today and I'll open up a space for you. Otherwise, if you do want to join the next opening will be January in twenty twenty four next year. So, guys, I hope you have a great trading week. Take care and I'll speak to you. I agree with it, but that is my approach. And and if you have any comments, I just read out some of the comments that Eagle says, remember, for the new people here, there will always be pullbacks that don't get discouraged even. Oh, sorry, if, for example, now your cad is bearish, but you will see pullbacks, sorry, one second, but you see pullbacks up like you see now. But we know overall fundamental trend for your cad is down bearish. Same goes with other currencies or any trading assets on equity markets. And this is this is a great point that you make as well, right? This is a great point that you make as well, Eagle. And I'm going to get to some of the other comments as well. But I just want to touch on Eagle's Eagle's comments and let me just delete clear all drawings, right? So I know some of you have come in and are looking at definitely day trading strategies. Now, I had it funny because I had a talk with a trader yesterday, yesterday evening, and yeah, he asked me this question in terms of, you know, how many trades that I take? Do I take a day or a week or a month? And I pretty much said, look, it depends upon the level because what's more important is is the level, right? And and discounts. So first and foremost, we're looking at, you know, cheap, right, and expensive areas. I'll try and wrap this up as soon as I can, by the way, because I know we've got a half an hour and I haven't even started the currency summary report. But I think this is important for everybody, right? It's a cheap and expensive areas. Now, depending on which way you're trading, right? Let's say, for example, you're a buyer of the base currency. Let's say, I don't know, this is this is dollar yen, right? This is dollar yen. So obviously you want to be a buyer. I will say obviously, but at the moment, fundamentally, you would want to be a buyer of the dollar, right? It makes all the sense in the world, yeah? So at the moment, this is, this would be considered cheap and this would be considered expensive, right? Who buys at highs? No one wants to buy at highs. Now, let's say, for example, this is a, you know, a daily chart, right? So what we're looking for is daily demand zones. Now, let's say you're a day trader, right? And prices pull back, let's say this represents, I don't know, a 300-pip pullback, yeah? That move to that, from that high to that low represents 300 pips. You must be careful or be very, very mindful that you're not, if you're a day trader, of what's going on in the higher time frame and be patient enough to understand where the cheap or bargain prices potentially are. We know this was a bargain. Why? Because prices made a new high and that was a previous expensive area and prices were such a bargain down here that it pushed past that previous expensive area, right? So when prices come back down to this area, the best place to look for a trade is down here, right? That would be the best place. That's not to say that prices can't go here and can't bounce off that, you know, support term or resistance term support, et cetera. I'm not saying that. But what I'm saying is this, if this low to this high, this bargain to this expensive area, you know, discounts and premiums, this represents 300 pips. A lot of times day traders can get caught in looking at 100-pip move or 100-pip pullback and thinking, yep, that's a big enough move for me to wanna get involved, yeah? Because they're not taking into account the bigger picture on a lower timeframe, this area here may look like something like this, right? Where you're seeing, you know, certain levels and you're thinking, okay, well, yeah, I'm down on a 15-minute chart and, you know, this is what it looks like. You know, it might look like something like this and you're thinking, oh, there's a nice little demand zone or some support and resistance in that area and I wanna be a buyer here and the owner said there's a stop-hunt around here and, you know, or some sort of CPR. Not realizing that, in fact, you're still buying at highs or you're still buying at least above what would be considered 50% fair value, right? Because 50% pullback between a high and expensive and a cheap area would be known as, you know, fair value, right? So it's really important, yeah, that you understand where you are in terms of where you're buying, yeah? And whether you're buying that and again, that's not to say that this can't go higher, right? And I personally, I don't care if it goes higher because my, I'm looking at, I'm looking, my priority is buying at discounted prices, yeah? I'm not looking to just take any, you know, willy-nilly level, yeah? So when the trader asked me yesterday about, you know, how many trades I take and I just said to him, look, it really just depends on whether the level or the area that I'm looking at sets up, yeah? If this sets up within a day, brilliant, excellent. I never trade, you know, within 24 hours, if it pulls back within 24 hours, 300 pips, brilliant. If it takes a week for that to pull back 300 pips to get to a demand zone where I'm interested in, then it takes a week, right? So I can't, you know, like I said, some weeks it can be, I can take two or three trades a week, right? Maybe even four or five on a really good week, yeah? See, good week's not good or bad, just, you know, the opportunity arises, right? And then there might be a week or two where we're waiting for prices to pull back and we, you know, there's all this lack of volatility, for example, volatility dries up. No one can control how far prices or how much prices are gonna move. We have periods of high volatility and periods of low volatility. So we have to just understand that those types of things are beyond our control. And it's important you understand this because you are gonna have periods of this, yeah? And it's not my strategy, or it might be my strategy, you could blame my strategy if you want, but in the way that we trade, it's not, you know, we're looking for the opportunity and not be driven by I need to make money to date. I need to make money this week because I need to pay my bills and I need to, da-da-da-da, right? That's not how, you know, that's not really how I trade. I know some traders do trade like that, but you're never gonna take the best trades and the most optimum trades if for this week, for some reason, you know, there's been a, you know, prices haven't gone anywhere and you've kind of had to just sit on your hands the whole week and then you're going down into lower and lower and lower time frames, you know, rather than go into an hourly, you're thinking, all right, let me go down to the 15 minute. Oh, you know what, there's nothing there. Let me go down to the five minute. Let me look at a one minute level. Then you start, that's how you traders end up typically getting caught out, right? It's understanding that there will be a pullback to some degree. Sometimes you have to wait for it and the wait might be a week or two. It is what it is, but if, you know, we're trading, you know, multiple pairs, hopefully at some point there should be, you know, at least a trading opportunity, a minimum of one or two a week, right? There should be something like that. It's rare that you don't get anything for the whole week, but just understand that if there is, if there is a situation where prices have gone without you and you're looking for a pullback, just wait for the pullback. That's just my advice, of course, it's your own money, you can make your own decisions, but just know that if you do take a trade at highs and I don't comment, you know, on the trade, you know, in terms of, I might say, oh, it's a good looking trade, but I might give you some feedback and say, well, it is at highs, so just be careful. Then, you know, that's just what it is. Also, as well, if you are trading at highs and you can't help yourself, reduce your risk size, because the chances of it probably going back to discount is higher than it is, you know, buying at highs, right? Because remember, as well, liquidity needs to be got, right? And liquidity needs to be got. There are institutions that have missed out on certain, you know, moves or haven't necessarily filled enough orders, right? And the job of the market maker, right, is to provide liquidity for these institutions. So if you see some unfair auctions to the upside, a couple, just know that those unfair auctions need to be filled at some point. It could be today, tomorrow, next week, next month, but there needs to be liquidity provided, right? And that will happen and you will get a pullback and an opportunity. So just try to be patient. So hopefully that explains things as well. Let me just go back a little bit. Suspenser says the reason why these influence, the reason why these influence because the required rate of return investors require these returns if someone didn't know. Sorry, the reason why these influence because the required rate of return investors require these returns if someone didn't know. I'm not too sure. Maybe that was about, was that about the bonds? The bonds side of things, Spencer. It says, remember that bonds are debt security if someone didn't know. Yeah, absolutely they are debt. Spencer says, this is like the one thing I learned well drawn into me coming to trading, wasn't it? Yeah, yeah, this you have to man. You can't chase, you can't chase price. You can't, you know, say, I need to take five trades this week and you know, you haven't taken any trades over two days and then you start forcing bad trades. It's all about the level and the discount, right? Whether you're buying it cheap, expensive and value isn't present every single day, right? And believe it or not, it might be present every single week, right? It will present itself but you have to kind of be a bit more patient. Igor says, Haley and I have just shared dynamic yield curve, 2007 versus 2023. Take a look and see similarities. Another tip to let us know in advance that recession is coming eventually, probably 2024, 2025. We do not know but it is a good indicator to watch. Okay, that's interesting, that's interesting. Yeah, but you know possibly 2024, 2025, who knows? But for now, it looks like the dollar is still a buy, right? It looks like the dollar is definitely still a buy. There was an article, we'll get into it a bit later about the dollar. Yeah, the king, that's exactly it. And you called it, you've been calling it Igor. I have to give you your praises. You've been calling it for a while and it's come to fruition, right? So brilliant, brilliant, brilliant call on the dollar. So yeah, so that's basically it, right? So that's the, just I guess a bit of an introduction. To trading 180 and the approach that we and I take. So, coming to some of your report.