 Hi, my name is Leon Roe currency trader and trading coach at trading 180 calm and welcome to this week's supply and demand fundamental and technical Forex and gold analysis if you're new a warm welcome to you and an equally warm welcome to you if you are Returning don't forget to like subscribe and share with your fellow trading colleagues if you find the Information I provide every week of use so I just wanted to also say as well To the people that turned up to the webinar. I hope you found a lot of value in the fundamental analysis webinar that I Did and also as well mark Chapman's, you know market maker footprints of the market maker as well some really really Great value there and should keep you on in good stead and hopefully, you know will improve go some ways to improving You know, you're trading and looking at the market from a totally different perspective as to what is really kind of peddled online anyways let's get into the some some weekly news and Trading economics Zooming in some investors braced for another roller coaster week So a standoff between Russia and Ukraine will dominate again The markets with Moscow changing the atomic rhetoric on a daily basis and the US continuing to give warnings of an impending invasion So again risk off sentiment risk off meaning that there's a lot of fear uncertainty a doubt money tends to float into and out of safe haven assets and away from You know higher yielding assets, I guess so so yeah, you know, again It's it's maybe a bit of more of a difficult week to trade But there will be some sort of resolution at some point and when there is and there's a bit more clarity in the market You know, there's it's going to be I think a lot more opportunity. I tend to Want to prefer to trade, you know risk off. Sorry risk on assets meaning that I'm looking for higher yielding commodity currencies for example and Basically where central banks are looking to, you know, high crates over central banks that are not right So there's a divergence for those of you that attended the webinar So on the data front market services and manufacturing PMIs from the US UK and Germany France Euro area in Japan will be in the spotlight in the US investors with a game We're looking for signs of whether the Federal Reserve would turn more hawkish meaning that they may start to high crates a Bit a bit sooner, right as far as I say a bit sooner, but I guess more than expected So there's that going on potentially this week So let's get into the the the charts and starting off on the dollar index so the dollar index and Looking at the dollar index, which is just a measure of dollar strength Against the major currencies like the euro the yen and the pound Really my bias is to the upside again This is not financial advice or trading advice But my bias is really to the upside and my bias is really driven by again the fundamentals on On the central bank the Fed really top Fed official You know back March lift off as consensus takes shape So what does that you know really mean is that to top Federal Reserve officials back to raising rates, right? Hiking rates is generally seen as appreciative Should appreciate the currency In March to curb the hottest inflation in 40 years and start to shrink their bloated balance sheet in coming months signaling a consensus against more more hawkish action, so The the remarks on Friday by federal Nail, I think that's a pronounced the name her name Brainard of New York Fed President John Williams as well as Chicago Fed Charles Evans showed officials eager to get tightening under way so hiking under way Rising of interest rates without seeking a super sized interest rate hike or a move before the next scheduled meeting so You know that they are on the hiking cycle was really a debate as to how much they want to really hike Right, so that really is the the topic But for me as long as the Fed are hiking rates my bias is really just understanding If prices pull back in the short term that I do want to be a buyer, right? So if prices pull down to this demand zone around here And I get some confluence on obviously some other dollar pairs that dollar yen dollar Swiss For example, and then I'm looking for buy trades on those pairs as well So just use the dollar index Really as as confluence in EC prices come down into a demand zone and prices start to turn up and also prices are in the In a demand zone for example with the dollar yen or the dollar Swiss and you want to be a buyer with a dollar against those pairs I'm not saying that you should But if you do then that just adds, you know, really some confluence so again pretty much nothing You know has changed for me anyway from that perspective if you are looking at getting sure really the best Probably a to look for any kind of short trades In the short term, I guess if prices do really come up to this area here This area of supply and then you may want to look for either, you know taking take profit Targets potentially on obviously your currency pairs because that is obviously been expensive for the dollar Right, and this is seen as a potential bargain at the moment. So highs and lows of ranges are always A prudent to take, you know some some either all total profits or partial profits, right? And a potential profit target. So for me my bias is still long dollar and Let's see what the other pairs are saying. So we're moving on to the dollar yen dollar yen So we've got really on the dollar yen a strength divergence of six. So With that being said six in case you don't know Is is really one of the highest strength divergences that you can have meaning that the dollar the US dollar is ranked strong and the The the yen is at ranked actually weak. There's the highest strength divergence is actually seven and So we've got the dollar yen has ranked as a six. So for me Again buys all the way. So looking for really kind of pullbacks now is a decent Area to look for any kind of long trades. Of course the more prices come down the cheaper, you know That exchange rate But if you do want to look for any kind of long trades right now on an intraday time frame So what you're looking at is higher time frames and looking down You can even take that on obviously the the higher time frame We could look down into a lower time frame and see if there's any You know Entries that you want to look for personally. I think probably a bit lower if prices do come a bit lower I prefer for a lower price for me to look for any kind of a long trades So let's see about that now is okay though now is fine But if prices don't hold there this week and prices do fall a little bit based off of again risk off sentiment Right risk off the Japanese yen will strengthen. Yeah, unfortunately Say unfortunately if you're long dollars, then obviously It for the short term is unfortunate But actually what risk sentiment does or risk of sentiment does is pushes prices down to where, you know You can get in for cheaper, right? Because when risk comes back on then you've got a lot more upside potential So that's the way I look at, you know risk on and risk off So for me just looking at really Buy trades and it's just a case of you know where prices may want to turn around Again, if you do want to get short on this currency pair, then you are really kind of looking I would probably say this area right here To look for any kind of short trace at any pullbacks That would be it but with rush attentions and risk off sentiment potentially Coming into the market. We could see prices come down a little bit and if so again for me I'm still looking at you know buy trades for the medium to long term Moving on to the dollar Swiss and the dollar Swiss We have again really nothing's you know changed as much as much prices have come down to a really nice area And in fact, I did actually want to get long here But I missed my entry as I was actually Having the webinar that on the Thursday night So my entry actually would have been on in this candle here, but by the time I realized in the morning Prices have moved, you know way above where I want it to get long So I'm never you know chasing price if prices do come down a bit more then I will look for potential entry in and around that zone as I am long dollars And I'm sure on the trying to sell the Swiss Frank, but again, just be cautious of Risk off sentiment and when I say be cautious more You know understand that you don't really want to put on your usual position risk size in a risk-off environment if you're trying to get long So if you normally risk for example, I don't know I would never advise anyone risk one percent But if you're you know risking one percent on a trade Maybe you want to go in at zero point five percent, you know on on your trade or zero point, you know two percent Which is really what I recommend zero point one zero point two percent on on on trades Because what was told to me was if you can't handle peanuts, then how are you gonna handle coconuts? So if you can't handle, you know, you're not profitable at larger position sizes But if you can't do it a small position sizes, then you definitely can't do it a bigger position sizes And just from the perspective of if even if you've got you know a large account What you'll find is is that? You know when the larger your account actually the smaller your position size will tend to get there's you know Trying to you know risk one percent on a on a on a you know five six figure account Isn't necessarily the best thing in the world and yeah anyways some traders do some traders don't but personally You know, I wouldn't risk one. I don't risk one percent on trades I'm all risking, you know somewhere around a zero point five zero point four percent on on each trade anyways From that perspective Yeah, for me, I'm long on this currency pair So looking for potential entry in and around here if you do want to get short on this currency pair Because you're buying into some sort of risk-off sentiment Then you're looking at that supply zone in around here for a for a short trade of prices do pull back Ultimately, I do want to get long In the round this zone here, but again, nobody knows where prices will Turn if prices don't turn around here prices could turn around down here, right? Because the cheaper you go the more undervalued you are and more bargain prices So let's see what happens Around here, but again my bias really is too to the upside moving on to the the dollar CAD and the dollar CAD again, you've got two Strong currencies and I've been saying this for for a while and again those of you who attended my webinar would understand that when you get to Central banks that are hiking rates. What should happen? or cutting rates you should get a Guess what's known as a value auction some people would know that as a sideways ranging market, right? So this is it. This is what you're seeing and it's not me saying, you know, it's not me You know saying that it's so this is what's going to happen But this is what's likely to happen and it's playing out in the market So you have to kind of adjust your strategy if you are looking at trading too strong or too weak currencies to appreciating currencies to depreciating currencies and In this case in a straight fight, you've got, you know, two central banks that are looking to hike rates Canada are looking to hike rates. So again, you're getting this value auction where buyers and sellers are in agreement where prices are Between this one to seven or one to eight really 1.28 and then 1.26 maybe, you know, five area But for me, I'm not interested in this pair But if you are then I would probably say again any short trades into that zone or any long trades into that zone Depending on which one you want to be a buyer or a seller of but for me, I'm not interested in that pair at all I'm looking for divergences Moving on to the pound Dollar instead of pound dollar again, you've got two central banks that are looking to Hike rates, you know soon. So again, the analysis really hasn't changed and you're seeing I guess more more of a Sideways moving market a value auction where prices really being accepted within this range So for me again, not really interested in this currency pale though If you're looking for a short trade, I think the best areas to look for a short trade around that one three seven area I just levels been touched several times and the more times the level is touched the weaker It becomes and if you do want to be a buyer, then you're probably looking out I'll just probably say anywhere probably down below Down to this one point three four six area for a for a long trade So that's really where Where we are with the the pound dollar and I guess looking at the pound as well there was actually Where are you now? Sorry the there we go. So we've got 1990s lesson Recession is the price of curbing UK inflation. So What's happening is and it's not just exclusive to the UK It's exclusive everywhere, right is the fact that a living living standards are being squeezed Right because of higher inflation. So UK inflation now running at hottest in three decades The the US inflation is running the hottest of four decades, right? So So it's it's inflation is a problem everywhere but what's also happening is is a horrible mix of a high covering interest rates because In order to combat inflation you need to hike interest rates So with that being said, you know, you've got higher borrowing and lending costs, which you know hurts Households if you've got you know your mortgage or a homeowner You and you've got a mortgage on your home, then you're going to be paying higher prices higher interest rates on your on your mortgage, right? And as well as just paying higher prices on energy costs and everything so central banks Unfortunately are in a very Delicate situation where they don't want to high crates too much because otherwise it actually might you know tip a recession So rising unemployment and the recession have been a have been the price that we have had to pay to get inflation down That price is well worth paying You know, that was it was made May 16th, 1991 when Norman Lamont the finance minister in John Major's conservative a government uttered his famous words as the consumer prices Index of inflation peaked at over 8% Yes, so this is just a historical context now Does that mean, you know the pound is a sell well for me? No, because at the moment the pound the economy is still is Growing right, but if you start to see GDP start to you know stagnate or decrease Then you know, there is an issue there, right? There was a massive issue there, so Let's see for now. I think the pound is still a buy as long as the data supports that narrative and let's see You know going forward what happens with the pound, but I'm you know a buyer of the pound for now So any kind of pullbacks not necessarily on the dollar, but with other currency pairs? Let's see what happens with that Moving on to the euro dollar euro dollar so last week's analysis still on here Let me just get rid of this and really the The I guess from a strong strength divergence Perspective and our fundamental analysis spreadsheet the euro dollar is actually seven that the The pound was actually three In case I didn't mention it But the pound was three which isn't necessarily the best strength divergence in the world But the euro dollar is actually strength divergence of seven which is actually one of the strongest divergences And again, just seeing what's what really happened, you know a couple of what we call so ago where you're getting you know Lower highs and lower lows, right? We've had that strength divergence there prices pulled back to a level pulled back to that level and shorten, right? So From a fundamental perspective, you know, we know which way we should really want to you know Look to trade doesn't mean that it's gonna go down every single day, right? It doesn't doesn't make any sense But if prices do pull back then you're just looking at cheaper prices ready to look for any kind of self-trades now with the euro we've got Some news so ECB officials edge towards a 2022 rate hike to stem inflation. So You know a debate about ending QE a prerequisite for liftoff has begun, of course Because inflation is a problem again not just, you know, in the US or the UK but really around everywhere and policymakers concerned about widening government bond spreads so More European central bank officials are conceding that interest rates will likely need to rise late. Sorry rates Let me read that again. Sorry more European central bank officials are conceding that interest rates We will likely need to rise late this year in the face of a stronger inflation outlook. So again They are late to the party. So although we do have I think the part for the citizens is to the downside I do think the downside is going to be capped I don't think it's going to continue, you know going down to the 110s one one 109s, etc Because the rumor now has started that they may want to start to strengthen their currency So with that being said You know, I do think the downside is potentially capped but I also think that the dollar is is well ahead when it comes to You know strengthening their currencies So we could get a pullback into the 115s even into the 116s But for me, I'm still looking at short trades at supply, you know I'm only looking at one direction. I'm looking to buy the euro against the dollar Although I am looking to buy the euro against some other currencies and weaker currencies. So From that perspective, yeah, it's just really kind of pullbacks if prices do decide to know make lower lows Then you're looking at again a pullback to this area here, which would be a supply zone And then you're looking at, you know, just some short trades there, right? If that's your bias if you want to be a buyer with a dollar and a seller of the euro, but also as well Concerning the euro is that economists are wondering is the ECB about to make a policy error, right? So the policy error the euro zone watches see undershoot of 2% goal in the next two years So some one of misstep others doubt a hike will materialize. So although there are rumors of a potential hike economists are a Bit skeptical of that. Yeah, especially if if if hiking rates is Unnecessary if inflation may naturally come back to their 2% target then, you know Hiking rates may have been a policy error or a policy misstep, but let's see, you know, what happens Like I said, I'm an I'm a seller with the euro in some cases, but against others other currencies I am actually a buyer. So let's again see what happens then in the euro dollar case I am actually a buyer of the of the dollar over the euro moving on to the Australian dollar U.S. Dollar and the Aussie dollar U.S. Dollar. I'm not really again a buyer or a seller of this currency pair not really trading this currency pair The Australian dollar I think is a buy just not against the U.S. Dollar And I think when they start to hike rates, I think pricey prices do pull back to this area here I think that might be actually a decent buy So let's see what happens there But I think again the power for this resistance should be in the short term anyway to the downside So yeah, that's pretty much it really not much to kind of discuss Around there, especially maybe in a risk-off environment in a risk-off environment The the U.S. Dollar does strengthen more than the Australian dollar The Australian dollar as a commodity currency, you know, isn't doesn't strengthen in a risk-off environment Although it is benefiting from higher commodity prices due to you know, I guess scarcity in and supply chain problems Moving on to gold finally gold gold going higher and higher right gold is broken out of this of this area here And it's really again due to more risk-off sentiment and pretty inflation worries right lots of inflation worries in The market right all around the world and gold is a hedge against inflation So when you have, you know risk-off sentiment as well as rising inflation that should you know That shouldn't I use the word should and typically usually does appreciate gold So this is what you're seeing Right now with with the price of gold going higher. So if you are, you know taking that trade idea Any pullbacks into a demand zone are you know by opportunities in that in fact that should really be Supply so so from that From that angle from that trade idea. I think this is actually a really nice buying opportunity On gold any kind of pullbacks into a nice demand zone You can probably look at the top of this area as well because you do have some horizontal horizontal Support or resistance should turn to what support but I probably prefer That area there. I think prices could maybe come down to that 1851 but again, you'd have to have the perfect mix. I guess of risk off as well as Rising inflation. Yeah, if you if risk starts to come back on Then it's it's a bit more of a difficult one to trade gold But once you start to have you know the tensions in in in the ukraine and russia start to ramp up lots of uncertainty As you've seen Then that's really what adds is a catalyst You know for gold if you are looking to short gold for whatever reason Then now I think is a decent point Decent time. We've also got a bit of an area up here, but that area I think has been touched a couple of times Let's go back a little bit. Yeah So really I think the range is more to do with the absolute all-time higher, which was 2000 And 75 dollars That's really where the range is at the moment. So So if you think prices will start to continue going higher, then that is really Where you're looking at, you know trend trading and just looking for pullbacks to kind of ride it up to You know the all-time high potentially so again inflation keeps if your inflation keeps rising the Risk remains often gold should be a buy anyways guys. That's it for this week Hope you enjoyed the analysis and until the next video. Take care