 Hi, my name is Leon Roeb currency trader and trading coach at trading 180.com and welcome to this week's supply and demand Forex and gold fundamental and technical analysis if you're new very very warm welcome to you and if you're returning an equally warm welcome to you and Please don't forget to like subscribe and share with your fellow colleagues the video and videos I have on my YouTube channel is a free way to support the channel and Really get the quality content out to the traders that really need it and really our trading 180 process Is combining fundamental analysis as well as technical analysis to really identify the best trading? opportunities, so Let's look at the calendar ahead from trading economics and the calendar a few things to be aware of I guess this week is Really kind of the GDP you've got the pound GDP month for month for April The consensus I guess is that it's going to be it's going to go from a negative to into the positive territory And I guess it should be but the but the training economics is forecast is for actually just different to kind of flat line Evil way that you know, it's been kind of priced in anywhere anything, you know way below that I think if it comes out negative I mean that's just going to add pressure to the to the pound And I'm already short the pound Anyway, I've been short the pound for a couple of months now my bias has definitely been that and and yeah I'll get into some of the trades on the pound especially the pound pound dollar That some of the guys in the group have made a tide a little profit on From a few weeks ago Tuesday 14 we've got unemployment rate as well. That's important for Overall GDP and claimant count change but unemployment rate for April is going to come in still I think unemployment should be Forecasted as pretty stable Wednesday, it's going to be the big announcement is really the Fed interest rate decision Currently we're at we're at 1% and I think they're gonna what I think but the probability is that they're gonna what the market expects is that it's going to be About 50 basis points a half Percentage rate hike So nothing new there I think what's really new is is what the thing to kind of watch as well is the press conference to see how hawkish the the Federal Reserve are when it comes to their dot-plot and Future rate hikes CPI came out higher than expected on Friday So it's putting pressure on the Fed to actually do a bit more and be a bit more hawkish. I'll get into that In the in the in-depth analysis and chart analysis Coming up Thursday. We've got I'll say balance of trade is decent for Japan unemployment rate for Australia Again, no real major changes and then we've got the Bank of England interest rate decision So they're expected to hike at 25 basis points or point two five percent There are Potential calls that they may hike even more and if they do I think the pound will go, you know higher in the short term but overall We'll say higher but it would appreciate in a short term but I think in the in the medium to long term unless they get a really a grip on on inflation and You know, I guess they don't want to hike too much simply because if they do hike too much they could Send the economy into a bit of a recession as there's higher borrowing and lending costs and if businesses are already struggling and Consumers already feeling the pinch from cost of living crisis then Haven't having higher interest rates doesn't help a situation when the economy is contracting So then we've got Friday Bank of Japan interest rate decision as well Which is expected to remain at minus zero point one. So Those are really the key News events coming up this week any surprises are you know potential trading opportunities There was trading opportunities, but in the short term trading opportunities, but longer term You know just looking for divergences in monetary policy still or convergences, right? So let's start off on the technicals. So they start off, but let's go to the technicals dollar index and Technically we've seen obviously prices make higher highs and higher lows now dollar index is just a measure of dollar strength against a basket of currencies and In fact, what I'm going to do is I'm just going to drag this probably over up here I've got a lot of demand here and as I've been saying pretty much for Pretty over a year now is that the dollar has been a buy, right? And this is nothing to do with Elliot wave theory if you're an Elliot waves, you know Practitioner and wave one two three four five s absolute nonsense This has been driven by a monetary policy and divergence in monetary policy central banks hiking rates and Hiking rates has a direct effect of appreciating a currency and if you Understand that then you'll understand that you should have really been buying the dollar for for a while, right? It's waiting on pullback. So Dollar index To me is a bar just waiting for a pullback potentially before getting long in the short term anyway There are I think there is an opportunity to potentially get short on the dollar But I think for now, I think the dollar is still being supported. So For me This is just uses confluence the dollar index and so looking at you know, the fundamentals and what you know happened was that The Fed task gets tougher putting 75 basis points hike back into view So investors bet on 75 basis point points, but not seen lightly next week power faces press conference Wednesday Congress June 22nd 23rd and bad news on inflation hard and expectations the Federal Reserve will keep raising interest rates In half-point steps through September with talk of an even larger move mounting in the conversation. So Because of inflation going higher they have to hike rates a bit more and so that is really what was driving The The dollar, you know to the apps higher right because of the market has to price in what a potential What potential more hikes means for the currency and that should have obviously hikes generally and typically have a and appreciate an effect on the Currency or should do of course, you there are different circumstances But as I say typically and usually this is the case So when inflation came out higher, it just basically Signal to the market that the Fed has to do more to try to combat inflation So any pullbacks I think on the dollar in the short term of buying opportunities and you wouldn't necessarily buy the dollar Dollar index the DXY you would look at you know buy trades on for example, you know The dollar Swiss or the dollar yen for example, right? So any confluences there now if you're looking at short in the dollar I'm not too sure why you would want to do that But if you're you know if you're looking at short in the dollar, then this is really a decent confluence technically You know the dollar could come off the boil, right? And they could be some profit-taking and I'm all saying that prices can't go down in the short term Of course they can but overall the path of these resistance is to the upside There was a few days where you had you know prices come down eventually went up, right? Prices came down a little bit for a week or two and they went up a bit, right? Prices come down prices go up prices went down a deeper pullback, right? People would have said the dollar sitting off the end of the crash is coming But again, they get caught on the wrong side. So Understanding the long-term fundamentals is really what you're, you know, what you should be looking at to help your trading and This is the way really to Understand how markets move and predict longer term trends, right? So with that being said for me dollars still a buy Pullbacks into any kind of demand zones as confluence on the DXY would be confluence on any of the forex pairs Moving on to the dollar yen and the dollar yen It's going from strength to strength and so there is Demand zone net and We've got demand zone here and if you zoom out in fact, let's do all right So the the dollar yen or a band has only gotten from 2003 but they actually goes back a bit further and I think we're heading towards All-time highs. I think it was something around the 140 mark. I'm not mistaken Which was a think around I think it was at 1998 So we're heading up towards these highs now The there is an opportunity to short this currency pair based off of central bank intervention There has been a lot of talk of the Bank of Japan You know, basically intervening in the currency markets to potentially stop it from appreciating so rapidly But at the moment Prices are really being driven by policy divergences Meaning that the Fed are hiking and the Bank of Japan are not so you're seeing this happen You know prices really, you know move a lot higher pullbacks Into that zone at 130 about 500 pips to the downside is really that the only real Zone for me that I'm looking for if I'm looking to get long But there is a short an opportunity Coming into play potentially the higher this goes. So nobody knows exactly You know where that level is, but it looks like the 140. I think might be the Might be the the level or somewhere just just below that one one three sixes one three one three sevens one three eight So let's keep an eye on we're definitely keep an eye with with with the group as to when we're trying to When I'm going to enter into a potential short trade It's not a typical trade that I would enter into because I'm normally looking for bargains and maybe not even against the The dollars, you know might be the best might not be the best trade, but I think the yen Central Bank intervention will start to strengthen. So that could happen over the next week or two or three But keeping an eye on that but for now Parthen's is Resistance is to the long side. So any pullback should be buying opportunity to that 130. I think And that's what my bias is For now, so I might take a short trade down to this 130 area Then maybe start to look for potential long trades dollar Swiss dollar Swiss dollar Swiss, I think the upside might be capped as well Swiss National Bank is What talk is that they might start to high crates, right? So I don't think that the dollar will appreciate as much Or may not appreciate as much if the against the Swiss Frank if the Swiss National Bank come out and say they look into high crates. So There could be a potential short here, of course, but ultimately I'm still looking to be a buyer Any pullbacks down to this 96 95 50 area and possibly into this no 94 50 area So looking that's my bias, but again potential buy trades For them for the Swiss Frank up at the highs prices do come up the highs because this is obviously Seen as an expensive area for the dollar Swiss exchange rate And this is seen as a potential bargain. So we could see the same repeat happened at either end Moving on to the dollar CAD dollar CAD not really a pair that I'm interested in Both central banks are a hiking rates now What you have is There's some demand here definitely some demand there and We are now into this Supply zone right there We've also got supply right here now again It's a difficult one if you think that the the Canadian dollar is a bargain at these prices Then there's a nice short trade there if you think that the the US dollar is a bargain If prices revisit this area down here, then that is where you really want to look for buy trades again for me analysis isn't technical analysis It's literally as simple as that fundamentally. It's not really a pair that I'm interested in So I think I will move on but it's decent Nevertheless on both sides if you're looking to take that technically New Zealand dollar US dollar similar thing We had Last couple of weeks prices come up into the top end of this supply zone. There's also a supply zone all the way up here And then prices, you know pretty much fell away, right? So if you're looking to buy the dollar that was a very nice opportunity There are buying opportunities right here though in this demand zone here So again, if you're seeing a wide area of demand or supply one of the things that you want to do is Break it down so you can go down into the lower time frames and look for a horizontal diagonal Support and resistance area so you go down to month something like that, you know If you one hour two hour, etc And then knowing that this is an area within that demand zone You can look at that zone there Support and resistance as maybe within the overall bigger and the Larger higher time frame of of demand as an area that you may want to get involved in right something also at the top right there Potentially but you'd have to understand why you're looking to buy the New Zealand dollar Against the US dollar and why that may be considered a bargain for me again This pair is not something that I would really be interested in Maybe down at the absolute lows maybe an opportunity but not really a pair that I'm looking to Get involved in not for me. Anyways Again, both central banks looking to high crates and but in a risk-off scenario, which we're more are in at the moment And there are definitely inflation worries, etc The dollar the US dollars should be though really the one to to buy over the commodity currency Now this is a trade that I have been in for a week or two and it's finally I mean it's paid off already, but I've reached second targets and now looking at you know close to third targets Which is going to be around the one two two five or six areas I'm going back up to the daily. So a few weeks ago. I said to you guys that if you look at the The video that I posted probably around this, you know, the end of May the weekly video I said that I was in short of this area and The guys in the group also, you know would have seen that as well I was short at this on this day here the 27th so if you look at probably the the 30th Or the 29th of May weekend in the 29th of May a beginning start to an outfit may I was saying I was short around here And you can see now that prices have moved good few hundred pips from there Yeah, about 300 or pips. So Really nice trade so far two positions take or three positions taken to taken off and so a final position now is is towards the lower end of the auction so But currently we have this area here acting as supply and I would say there's the man there And there is I'm gonna there is I would say that level is probably Yeah, I'm gonna just delete that You could if you want to get long there. It's it's you know, you could if you wanted to but for me Part of these resistances really to the downside again fundamentally. Why is that and it's because out of the two the US dollar in the UK the US the UK is really kind of struggling with inflation as well as Their economy right so the UK should not raise hopes that peak inflation is imminent So falls in global commodity prices offset by domestic pressures Britain on track for double-digit inflation this year crazy double digit a falling prices in the price Sorry, yeah prices of a few key global commodity indicators has raised hopes that the world economy may have reached peak inflation But UK households best not get carried away say economists warned so We've been saying this a while in the group and a lot of the guys You know a short in the pound and made some really Some really profitable trades on for example the pound CAD we've been in You know pound New Zealand, etc. And you've seen those trades really play out over to get in the medium to long term But as we stand now any pullbacks into that zone I think a decent or maybe the absolute absolute highs might be a decent short and Yeah, but if you do want to get long on this then it's really I think that's really the play But there's also been forecasts that we're talking about the 120 being actually a target that could be reached So There's there's also there's that as well. So let's see what happens with with that But for me again the pound is Definitely not a pair or not a currency that I'm looking to buy especially not over the year the US dollar Euro Euro the ECB meeting came out and A lot of traders ended up getting caught on this And Strangely enough we were talking about this in the group And that we were prepared for prices to go to 105 And in fact they a few pips away about six pips away from that 105 mark So I'll pretty much break it down for you guys So basically on the 8th of June reading an article by ING who said that Euro and ECB preview Right, so this was before the news came out So no hawk is surprised unless the guard hints at 50 basis point hike So what ING would be basically saying that is that any message that does not signal openness to a 50 basis point hike Would likely for sure of the market's hawkish expectations and push to euro to a euro dollar to closer to 105 So, you know the smart money talk, right? This isn't they're not mentioning all the blocks or anything like that. No nonsense like that They're looking at the fundamentals as to the reasons why prices will go where they're going to go so that's what they were looking at and so on the 8th of June where were we we were somewhere up here, right? 8th of June was here this day here So they're talking about when prices were 106 is 107s. They've talked about 105s, right? and then what happened was is that the the news the news came out and They weren't really that hawkish, but also but even before that and let's say before that but as I Guess a backdrop to you know, the fall of the euro potentially if the ECB weren't hawkish was that the ECB's most dire forecast may have been too optimistic So economically the European Central Bank's worst case scenario March for the fallout from Russia invasion of Ukraine might now be too Optimistic so they're potentially having to they're having you know severe growth problems economic growth problems So there's also that so we can talk about great hikes all we want but just like the UK if the if the economy can't support rate hikes then Unfortunately the central bank may not you know, they're in a very difficult situation where do they rate hike? Do they hike rates or do they do they not right? Do they hike rates as aggressively and if they because if they do then they might send the economy into a recession So with that being said, you know again being part of the group you would have known this and so Again, you know, we were thinking to ourselves were the 105s for sure now the euro could be a potential bite Right, it could be a potential buy but in the short term This is what we were thinking and I had a live call with the guys and we were talking about this anyways ended up on the you know after the After the meeting that you know, ECB hawkishness not enough to lift the euro right now So the implicit openness to a 50 basis point hike in September by the European Central Bank today generated only a short lift Bounce in a euro dollar. We think that rising peripheral spreads and grim growth outlook basically grim growth which was this You know outlook in the eurozone are keeping the euro at check and that a return to 105 remains lightly Likely so with that being said what happened on that day you had a return to the 105s, right? Pretty much right there nearly to the pit, right? So a lot of traders ended up going long not going to break it down I do have this on my channel Where we were talking about traders being drawn in long, right? Which video was it one second? Let me just pause this and find the actual video where I'm talking about it Yeah, here we were and it's on I released it on the 10th of June So forex fundamental euro trade analysis how to trade the news and basically a lot people say that you know You can you might have known this in hindsight But I just proving in the in this video that we were prepared for the euro to go shorter, right? And how traders are being caught out so you can watch that after this video and if we go back to You know the charts this is pretty much what we were talking about Traders gone long and then all of a sudden down to the 105 So not really hindsight bias because this was all been prepared This is information that we knew before, you know the news was being drawn in and so The traders made money on this as well. So let's see what happens, but going forward Will just be the cap on the on the euro possibly potentially It could go lower But if it does, I think this might be as well a decent buying opportunity But I think with the more hawkish Fed Prices may want to go to you know a bit more to the downside Maybe 105 isn't the the actual extreme limit, but let's see what happens. I'm not really buying the euro against the dollar for now anyway So any pullbacks into This area here I Think a decent buying opportunities for the dollar as long as the dollar Remains supported by rate hikes moving on to the Australian dollar US dollar Again, not really a pair that I'm looking to trade But it is From a technical analysis perspective again similar to the New Zealand dollar US dollar prices pretty much came up to the top end of that supply zone and it ended up selling off I'm gonna basically move that to there Again two central banks Hiking rates the Fed are definitely ahead of the Australian dollar But um, let's see what happens. I think where we are right now. Look at there. This is all demand Could see a buying opportunity at some point But I'm not really keen on this pal think really the buying opportunities would be all the way down there If you're looking to buy the Australian dollar or pull back into, you know, that supply zone there before literally getting a short Aussie Yen and again Aussie Yen my bias has been to the upside and We are pulling back into it into an okay level I just wanted to see if there is Moving fair value. Yeah, I'm not really too keen on this Trade what hasn't got certain conferences that I like But if you do want to get involved in this to the long side, definitely That's definitely an opportunity. I probably want to deeper pull back Into this the 90s and just below that 90s before looking at getting Long on this pair again. So let's see with the central bank of Japan potentially looking to Intervene of course, this could also be a nice short an opportunity But until they really come out and start to signal that they are going to intervene then That trade I would probably say again the path of this distance is more to the upside But there is an opportunity to get short Looking for the fundamentals and then Looking at gold and gold just found a circle today as I was doing some prep for this video and The central banks to increase gold holdings over crisis concerns emerging Market central banks are worrying about everything from inflation to supply chain chaos the central bank see gold as a reserve asset And will likely increase their holdings of the metal in the next 12 months according to a survey survey by the gold Well gold council. I think the last time I saw that happen Was back in 2020 or 2019 in fact, I think I had a video about it on YouTube. I must must look for it But basically there was I think it was around 2019 2020 There was reports of the central banks increasing their gold positions and then look what ended up happening Right gold grant from the 13s 14s to up to the 20s. So again, this is just a if you look at You know gold being this is an expensive area. This was a bargain area bargain bargains then And the potential bargain where prices made new highs than this again being that bargain which Prices did again come off of demand zone there and with inflation It makes all the sense in the world for gold to you know increase Right to because gold is typically a hedge against inflation. So let's see what happens and I get it though with with the dollar You know strengthening Typically works inverse to to gold to gold should want to come down if the dollar is is rising But I think if central banks are looking to buy gold to hedge against them You know a lot of risks that are potentially happening not only inflation, but supply chain problems Then any pullbacks on gold should actually be a nice buying opportunity So in fact, if you want to add this as being an area that gold could pull back down to could do Before looking to go higher because I think there is definitely support for gold with central banks buying Based off of obviously increased risk sentiment if you're looking to short gold then there is You know that supply zone right there And and yeah, let's see what happens though But again my bias would be again to the to the long side. Anyways guys, that's it for this week Definitely check out the videos on the YouTube channel. Don't forget to like subscribe and share and I hope you have a great trading week All the best speak soon