 Hi, my name is Liam Rowe currency trader and trading coach at trading 180 comm welcome to this week's supply and demand Forex and gold fundamental and technical analysis a warm welcome to you if you're new and also if you're returning an equally warm welcome to you And please like subscribe and share if you find the content I provide every week useful It's just a free way to really support the channel and get this quality content out on the YouTube Or get it up on the YouTube algorithm anyway, so let's get into the Really the news coming up this week before we get into any of the fundamental and technical analysis So week ahead that zoom in on trading economics The US is releasing the second quarter estimate of the first quarter GDP data That's not going to really be so important. This is a massive miss And it's the second estimate. So the first estimate is really the most important second estimate should be somewhere close to the first estimate So the news would have been really just priced in alongside durable goods orders personal income and outlays and PCE price index, which is I think the Federal Reserve's preferred way of measuring inflation while President Biden's 2022 budget is also highly anticipated elsewhere Central banks in South Korea and Indonesia and New Zealand if you trade in New Zealand dollar, you'd want to Take note of this will be deciding on monetary policy while GDP updates to follow including those from Germany France Mexico and Singapore investors also are the publication of the Eurozone business survey China Industrial profits and Japan unemployment rates of Japan unemployment rate will probably be something to watch as well as it has a direct I guess correlation to GDP and whether the economy is growing a growing economy has Low unemployment and if the economy isn't growing then you have high unemployment, right? So a few things to word to really kind of keep our eye on This week. Anyways, let's get into the technicals and fundamentals as well and start on as we always do on the Dow Jones dollar index or DXY and The XY is just a measure of dollar strength against major currencies like the yen the euro and the pound and We use this as confluence or it's important to keep your eye on the dollar index Just as confluence to see what's happening with overall dollar strength or weakness and just if you start to see the dollar start to Rise in value, I guess then you're looking at buy trades on some other dollar crosses And if it starts to sell off then do the opposite, right? You start to sell the dollar now What helps us understand the direction oval direction of the dollar is through fundamentals. So looking at the Fed and federal officials signal open to taper talk at our upcoming meetings So many officials saw inflation expectations as well anchored and the Fed releases minutes On the 27th of April closed-door policy meeting. So this was the Federal Reserve meeting That we're talking about they were open to Well, they were open to a debate at upcoming meetings on scaling back their massive bond purchases a Record of their April gathering showed potentially putting taper talk on the table as early as next month And why is that important is because Basically the Federal Reserve are buying bonds and buy By by basically reducing those bond purchases It should have an effect of potentially strengthening the currency because then the Federal Reserve doesn't necessarily have to print so much money to buy Bonds right so a lot central banks will support in the bond market in the economy by printing a lot of money and by tapering by reducing the amount that they buy is supposed to have a Positive and a strengthening effect an appreciative effect on the currency So a number of participants suggested that if the economy continued to make rapid progress towards the committee's goals and that is important So we look at GDP it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases according to minutes from the FOMC published on Wednesday, so again the thing to watch out for is GDP if GDP is really good It starts to come out positive in the data Then you can start to buy the rumor that the Federal Reserve is Potentially going to taper which should actually start to strengthen the dollar index Why it's a view even starts to talk about it that is should be positive. So That is where by the rumors of the fact comes in and that's how you really stay ahead really of the curve It's not about Trying to look for a technical analysis to try and determine where the price is going Technical analysis is literally like a quite a poor representation of trying to predict future price movement price movement in the medium to long term is Is determined by really fundamental analysis monetary policy economic policy, etc so We might actually find ourselves at the bottom at the bottom right now Not to say that this is the bottom right here, but in the future we could see prices drift down a little bit We know that this has been an app This was an absolute bargain at the beginning of 2021 for the dollar and this may be another Bargain price, you know halfway through the year and again, we need some sort of catalyst for the market to shift their perspective on a weak dollar and if We do get some some taper talk at the next meeting Then this could be a really nice area to look for Buy trades on the dollar and you wouldn't necessarily be buying the DXY You would look to buy for example the dollar yen dollar Swiss dollar CAD etc so looking Towards the dollar yen and dollar yen this week over the past You know week or two We've really kind of been in this range between this high and this low and again a bit more specific Really I would say price can never do this high and it's low over the past couple of weeks So really cut quite a tight range of what's that 108 to one and I made about 140 pips or so and And so again if we do get some sort of a positive dollar New start to come out then that would be actually quite a decent buy Also is why I do like this 108 area to 107 50 nice fresh area of demand Potentially for a nicer. I like this technical setup anyway and So yeah, these are the two zones that if I was looking to Get involved in this currency payout putting my bias would be more towards buying the US dollar over the Japanese yen In a risk on environment, of course risk on meaning that investors are looking for a yield and Risk offers where there's a lot of fear uncertainty and doubts and where you have Investors looking to protect their assets. Yeah, so money tends to flow into the Japanese yen But those would be for me my options if you do want to get short if there is some sort of risk-off Sentiment that comes into the market could be could be really anything from corona virus to worries about inflation Then it really, you know should be a probably short trades But overall, I think the path for least resistance is to the is to the upside So that's where I will be looking for some long trades I'll say that I'm really buying or buying this pair because there are better pairs to trade out there But if there is a shift in sentiment on the dollar and really good news starts to come out Then I might start to buy the dollar again looking at the dollar Swiss dollar Swiss has come down I do think this is a brilliant area Technically to look for some buy trades and again similar to other dollar pairs if the if the Federal Reserve start to really kind of signal taper talk because the Swiss Frank is definitely in this with the Swiss National Bank are definitely not looking at Tapering anytime soon in fact those recent report that came out that the Swiss National Bank is saying saying that the Swiss Frank is highly highly overvalued as far as it's expensive So they in fact want a cheaper currency at the moment And so that would really be beneficial for the Swiss Frank if prices do rise But I do think this potentially could be a really nice buy again just looking at any kind of dollar Catalysts for a buy trade at the moment, but I think technically I really do like this area this 80 0.895 area For a buy if you're looking for a sell trade and looking to continue to sell the dollar. I think that area there Supply of prices would have to come down inside this area And then look for any kind of short trades that you go down into a lower time frame And then look for areas within this supply zone support and resistance, etc To see whether there is a tighter Entries and stop let's stop places in your stop losses of tire entries on a lower time frame Moving on to the Dollar cad dollar cad come on. Here we go dollar cad again dollar the cad being actually quite strong When it comes to Economic data and policy Again, we did get a bit of a pullback this week and prices did set off But I think if prices do pull back into this zone here that could be a decent area But preferred area would be right here this 1.2279 to 1.235 area would be a decent area for a short trade As I think the Canadian dollar is probably one of the best currencies commodity currency And it should get stronger against the dollar doesn't mean that it's gonna get stronger every single day or even every single week There could be pullbacks, but I think that area there in this area here is decent for a short trade If we can get up there again from a buying perspective We haven't really got any kind of strong demand. So I really want to see price If I'm looking to buy the dollar cad, which I'm probably not But if you are looking to buy the dollar cad you really want to see proof of value first Surprises really proved that there's demand here and a pullback into that area and then look for any kind of buy trades Moving on to the New Zealand dollar US dollar and the New Zealand dollar It's projected by several financial institutions to be a bit higher I should I think probably where it is now But in the medium to long term around the 73 areas and possibly 74s So any pullbacks I think would be probably buying opportunities Although there are better trades out there if the dollar starts to strengthen and you've already got a decent New Zealand dollar Pair where they are BNZ is is talking about tapering as well Then I think any pullbacks into these demand zones a 70 cent round number is going to be a really nice buy I think right now and we might not necessarily be at a bargain price if you consider where price is Contained between that high and that low which is an expensive or a bargain area depending on which way you're buying Yeah, we're really at fair value. So This was an absolute bargain back in April and prices went to the upside, right? So If prices do come back down to this area, I do think that is a really nice buy Or if prices pull, you know make new highs, then you want to see a pullback to demand before looking at getting long moving on to The pound dollar and the pound dollar All the forecast pretty much came in correct, right? We were Looking at the the the forecast in a private group and talking about, you know buying the pound Not too sure if many people did end up buying the pound But again, we forecasted really the direction of the pound and we've been forecasting the direction of the pound for months now against the dollar and It's pretty much hit, you know certain targets So any kind of pullbacks into a demand zone looks like a decent buy now looking at some Fundamental news. We've got a UK jobs market gains more than expected as locked down easy So employment rises more than expected first since first gain since the pandemic and policymakers now debating whether to again tighten monetary policy just like the federal reserve were Looking at as well. So all central banks are pretty much looking at tightening policy based off of a strong in strong employment data, so the UK again the UK labor market strengthened more than expected Which is always a good sign as a better sign in April as the economy began to emerge from the coronavirus restrictions so again great news for the pound so any kind of pullback potential buying opportunities, but if the The dollar also start to come out with good data. Then this trade is probably a harder trade. You really want to trade Look for pairs that diverging where you've got, you know Really good economy versus a really bad economy or in the economy that is struggling That is the kind of you know, those are the trades that you want to really kind of take when you have to Economies that are either strong or weak for example Then those trades are more difficult fundamentally to kind of determine the the direction of travel of price So you want to look for really divergence trades or even convergence trades But for now it looks like the pound has got the edge over the over the US So any kind of pullbacks because we're at an expensive area It was expensive back here prices sold off and then this is potentially a an expensive area But the question you have to ask yourself is why buy the dollar because if you're shorting a pound here That means that you're buying the dollar is why why do you think the dollar is a bargain at this price? So for me, it's not really a trade, but let's see what happens there might be more inclined to actually buy the the pound over the dollar, but again It just depends on on on on the on the data because the data has to support the narrative But if you are looking to buy the dollar right now, this is a decent area technically look for, you know some short trades currently One second. I think there was no there wasn't anything else moving on to the Euro dollar and Euro dollar has come up to a decent area to look for any kind of short trades If you're looking to short the Euro But at the moment, I think Eurozone is doing actually quite well. So we've got Eurozone PMI source confirming that strongly bound is strongly bound is underway So after two quarters of contracting GDP the second quarter of 2021 will likely show firm growth on the back of reopening economies and stronger consumer demand pipeline inflation pressures are also on the rise to with shortages emerging and Demand returning and also as well from a From a central bank perspective ECB's the guard signals no major policy shift at next meeting So they're looking for probably a wait-and-see approach. So it depends on obviously the data and what comes out So actually in fact if if the Fed start to be a bit more hawkish on tape I'm tapering. Sorry, then we could actually see prices start to to fall here Where you've got one central bank the ECB that are maybe a bit more Sorry a bit more Neutral on taper temper Bond tapering and you've got the dollar in fact that are maybe a bit hawkish on on tapering It could be a bit of a divergence there, which could push prices down in the short term Sorry about that So we got Yeah, pretty much looking at potential sentiment divergences with the with the with Europe a central bank and the dollar But again, that's probably a bit more a bit harder of a trade I would probably say just wait for a bit of a pullback if anything Probably looking there is the the supply zone and then there is the mom's only going to be around here It's made higher highs there So just looking for prices to kind of pull back into this area here before looking at any kind of Continual long trades. I think this pair is probably do a bit of a pullback overall forecast are talking about one two four one two five at the By the end of the year So this could be actually a decent pullback to get, you know long as the euro zone does play a bit of catch up when it comes to the their economy and Let's see what happens with that But I think it's a bit probably more of a harder trade at the moment to kind of predict the short-term direction Long-term direction, you know one two fives are probably where we're at So I want to probably from looking for any kind of buy trade and looking for a deeper pullback if we can get one for a continued long trade Moving on to the euro yen and this euro yen is just you know keeps going higher and higher It just hasn't provided any kind of opportunity to get long on this I've been trying to get long from around this area here But just hasn't pulled back, but we could see a bit of a pullback. Let's see what happens If we get a pullback into this zone that could be decent got some decent upside potential If not then looking at here reason why I'm long euro is because again, we've got a bit more of a recovery the Japanese yen Is a bit behind they've got a bit of an outbreak in the corona virus. So for me It's euro yen all the way and even though we haven't necessarily got in on this trade If you go back the past few weeks and see really what I've been talking about You'll see that the you know, we've been right on our analysis. Literally. This is what's been happening And we've been saying that we want to get long on this currency pair And if we had there was an opportunity technically to get involved then You know, this would have been a really nice trade. There's trades that we're not going to get in on It just is what it is, right? but the the main thing is is actually Doing the fundamental analysis and then seeing it play out and if you can do that then the technicals just help you to jump on board When when you are right, you know, and you get your you hone your skills and really kind of predicting, you know the direction of travel Anyways from a Supply perspective, I don't think there's anything you'd have to again wait for price to you know Kind of come down a bit prove that they're supplied there Then they move back up into that, you know supply zone which would start from around there and then look for you know Some some short trades, but for me it's demand zones all the way moving on to the Aussie dollar and Aussie dollar been in a bit of a tight range over the past week or two I do put it a bias would be more to more upside But again with the US dollar potentially strengthening In the short term or the Fed talking about tapering This is going to be pretty much a harder trade to look for any kind of buy or sell trades as far as predicting short-term direction longer term. I think there is the Institutions are predicting, you know an 80 cent Aussie dollar But so any any pullbacks I think to any kind of these zones here would be actually a decent area to look for Long trades or if prices pull, you know, go to the upside then wait for pullbacks into demand before looking at getting long on the Australian dollar US dollar if you are looking at short trades I do think this supply zone is really nice for a potential short trade a nice hard in hard out price movement and Obviously where we've got this area as well. I think it's really nice for a potential Short trade technically Aussie yen is pulled back. So this is one of the pairs I am really interested in getting any kind of entry to potential upside as long as risk stays on that's the main thing and If it doesn't then that's fine. I'm gonna tidy this up a little bit. We've got some Demand zone stacked upon each other But I think here is going to be where I'm looking for And here probably yeah, that's where we've got demand zones probably right there So right now looking for potential buy opportunities if we can get some with the Australian dollar Strengthening potentially if it if that zone doesn't work out Then it's looking for a better price down here and less again risk starts to turn off And if it does start to drift to an off Sentiment then the Japanese end should strengthen, but I think overall with the corona virus You know being under control vaccine rollout Australia Containing the vaccine so the virus then we should have more potential upside in the near term and finally looking at gold Gold I think it's been really making higher highs based off of inflation fears And the weak dollar as well So but this could potentially start to change a little bit from an overall perspective You know this being the absolute high being quite an expensive area for dollar in August 2020 And it's being an absolute bargain earlier this year on March April We're really at fair value right fair value. So for for gold against the dollar and Again a weak dollar has really kind of helped Gold, you know rising value, but I think with potentially the Dollar potentially now strengthening In maybe again, we need some catalyst But if it does Start to strengthen and the Fed do start to talk about tapering then gold heads Well gold may start to Come down but gold was this week headed for Third weekly advance with inflation in focus So gold pairs gains on Friday as dollar rises on factories output, but UBS Still expects gold to reach the one thousand six hundred dollar an ounce by the end of the year so There is the expectation of lower gold due to potential Inflation not necessarily coming true as far as really high inflation inflation getting out of control and maybe a strengthening dollar So higher u.s. Inflation and lower government bond yields have lifted gold back to One thousand eight hundred and seventy dollars an ounce But let's see what what potentially happens with gold and and their their forecast so At the moment if you are looking for potential long gold trades, then you're looking at You know pull back into a demand zone before looking at getting long at the moment That I don't think that level's really broken too much. It hasn't really broken for me. Yes There are closes above it, but it's not a convincing close So you could potentially still look for you know short trades In and around right now if you are if you do think that there is due a pullback Gold has been you know on on a run for one two three four five six seven positive closes So we're probably due for some sort of Bearish close and maybe a bit of a pullback at some point. So that could be a decent sell right now if not then Probably around here, but you'd want to see it start to look for Look towards the dollar index as confidence. So the dollars any kind of dollar strength and then you're looking for a gold potential sell Anyways guys, that's it for this week I hope you have a great trading week and I'll speak to you until the next video. Take care and have a blessed week