 Hi, my name is Dio Miro, Currency Trader and Trading Coach at Trading180.com and welcome to this week's supply and demand for us in gold, fundamental and technical analysis. If you're new to the channel and warm welcome to you, and if you're returning an equally warm welcome to you, and don't forget to like, subscribe and share the videos with your fellow trading colleagues. If you find the content that I create useful for your trading right and this week's questions or two questions, two parts from I think the same person. And the first question was that he has a quick question. How do you know what's priced in or what's what the percentage expectation is for other central banks, just like we have the CME FedWatch tool for the Fed. And question two is another question. How do we know the whisper number for some key news events for the dollar, such as non farm payroll, retail sales and or not to show what the whisper number is, but I'm going to guess basically the forecasted numbers. So I think that's basically what it was referring to. So I'll answer that at the end of the analysis video. So stick around for that. If you want to know the answers or my answers to those questions and I will answer the best questions that I feel the best questions in a video in my weekly videos at the end of the video. So if you want your question answered here and it's a good one that I think is a good one, then post it on the YouTube channel and I will get back to you and answer it in next week's video or you have a chance to anyways. So this week, week ahead, first of May, this week is set up to be extremely busy with a number of key events scheduled. Investors will closely follow the US labor report as well as the monetary policy decisions of the Federal Reserve and European central bank. Additionally, talks about earnings there and the service ISM services in manufacturing PMI jobs, openings and external trade data in the US will also be in focus. So central banks in Australia will decide on interest rates while inflation rates will be released for the Euro area, Switzerland was what we look at as well. And the Netherlands finally, manufacturing PMIs are expected from China, Canada is the other two main ones that we're that we're looking at in terms of current season. We don't necessarily trade the Chinese Yuan, but China is important to pretty much the global economy because it is the world's economic engine at the end of the day. And if China is growing and manufacturing is growing, then it should have an effect actually on the commodity currencies like the Australian dollar, the New Zealand dollar and possibly Canada in terms of in terms of oil. So let's see how that works. But getting into some more fundamentals and some technicals and going to the dollar index and the dollar index, just a measure of dollar strength against the basket of currencies like the Euro, the pound and the yen. And we look really just look at the dollar index to kind of get a gauge of overall dollar strength. And so this week, the last five days really has kind of just been in this tight auction, this range between the one oh ones and the low was the one, the 100 area. So it hasn't really moved too much in comparison to what you see in the previous weeks. So what's basically being accepted is the value of the dollar. And what will change this is if anything is unexpected, right? Meaning that fundamentally, if the Federal Reserve decide that they want to hike more than expected, then you're probably likely to see the price of the dollar go higher or likely again, likely not necessarily guaranteed probabilities, but likely to go higher. And but if not, it has a surprise to the market and a negative surprise meaning that the Fed actually don't hike rates, you know, come this week, then you could probably see the dollar start to fall. So that's going to be something to watch. But looking at what happened in the week, so US data, US inflation pressures persist reinforcing case for Fed hike. So the Fed hike pretty much is priced in to a large degree. And so we had core PCE prices gauge rose 0.3 percent in March for a second month. And so services measure watched by Fed's power decelerated. And so two key gauges showed persistent US inflation measures in recent months, but dressing the case for another federal reserve interest rate hike next week. So that's the expectation. And if you go to the CME Fed Watch tool, pretty much it has been priced in. I was 83.9 percent, 84 percent of the market has really kind of priced in, you know, a rate hike. There is obviously a 16 percent chance at the moment that the Fed will hold. But typically you want to go for really the market pricing in and not to necessarily answer the question now, we'll get into that a bit, you know, at the end of the video in terms of what pricing in really means. But also as well, we had US economic growth slow to 1.1 percent, while inflation accelerates, as we know, in the inventory's dented GDP, tempering surge in consumer spending. And so what does that mean? Why you got rising inflation and you've got a slowing economy. And that basically means you've got stagflation concerns, right? Stagflation is when you have slowing economy, contracting economy and rising inflation. So mixed data, US data raises stagflation concern. Stagflation is not an economic environment that is that the Fed wants to really kind of be in. And so it's it's very difficult at the moment for the Fed because they want to try and avoid stagflation and really trying to, I guess, what's the term? I guess an engineer, a soft landing, right? Soft landing meaning, you know, contract the economy, the economy starts to contract, but they'll not go into a deep recession. That would be more of a hard landing. So stagflation fears for the dollar. And so what does that all mean? Pretty much for me, I think the Federal Reserve are going to be one and done. And that's what's expected for that's what's been basically forecasted by lots of banks. And so, you know, rate hike is already priced into how high can it go? It's really all about what the Fed kind of says during the meeting and what the future expectations are as the rate hike is already priced in. So depending on what the Fed say would depend on what the dollar does in the short term. But overall, I think over the long term, medium to long term, which is really where my main focus is, I think the dollar, you know, declines. So if there is a pullback to some degree into one of these areas, the 102, two area, the 102, eight areas, I think that's going to be a really nice pullback to try short dollar and not financial advice. Of course, just basically telling you what I'm doing. Moving on to the dollar yen in the yen this week. There was a big announcement, I'd say, I think is here. Yep, BOJ's radar scraps rate guidance commits to stimulus for now. So the market was expecting there to be a little bit of hawkishness or a little bit of guidance as to whether yield curve control, which is a monetary policy measure to keep the currency devalued, in fact, was potentially, you know, on the way to being removed. And so because radar has reinforces the commitment to easing, yeah, easing QE quantitative easing is a measure that actually devalues the currency and because he's committed to continue with yield curve control. The market has pretty much taken that as, I guess, a short term sell of the yen, but I do think that the policy should want to change at some point this year and any hint that, you know, the radar is going to change the policy should really strengthen the yen. It's just really about a timing issue. So prices came up, prices could have went to the downside as we were kind of analyzing from last week. But unfortunately, the fundamentals didn't follow through for the for the dollar yen. So any dollar yen trades that you're going short, basically, probably likely to get stopped out on that one. But doesn't mean that it's the trade is to go long. Me personally, I don't think I'm really looking to go long on that dollar. In fact, I'll probably look from some sort of short trade in and around these areas and possibly just above that area as well. But I'll wait until probably we get there. You could probably look at it like where is it probably from here to here. And then you've got another supply zone. So one of these supply zones up top. Summing out, I think maybe the one three eights, the top of the one three sevens and then even into the one three eights would be quite a decent area to look for some short trades if prices can get up there. And it also depends on what the Fed do as well. So if the Fed are dovish, I do think that the upside is going to be capped. Dollar, Swiss again, Swiss has been quite strong. Nothing really changed from last week. Just really looking for any type of pullback into a decent zone before getting I think probably short on this. If I was looking for a trade on this pair, I'd rather look to buy the Swiss Frank over the US dollar. But I'm not really interested in this pair to be fair. But if there is I think technically this is really nice. But fundamentally, I think the Swiss Frank has the edge for now. Moving on to the dollar CAD. Yeah, dollar CAD, you know, broke through that supply zone. And as there was some I guess maybe some hawkishness about the dollar and then it's pretty much come down. So I do think. That the eventually the forecasts, bank forecasts do say that the Canadian dollars should eventually strengthen against the dollar. But it would be more about the dollar devaluing rather than the Canadian dollar increasing in value. So get not really a pair that I'm interested in. But if you are interested in trying to get short on this, then a pullback into the one three sevens would be the best place to look for a sell trade. And if you're looking to actually buy it, we're actually in a decent demand zone if you're going to buy the dollar against the Canadian dollar, the US dollar against the Canadian dollar. So we come down into this zone right here. So depending on again, what your bias is fundamental bias, then that actually is a decent zone to look for any kind of long trades intraday. So you just go down into lower time frames and look for some sort of entry if you want to look for that. Now, going back to the day, looking at the Zealand dollar, US dollar and prices did come down to a decent zone. I was saying this last week, a decent area. Didn't quite come into the into the demand zone, unfortunately, but I think if it did, then it could be a decent bounce. Didn't quite come in. But this I think is that this zone is still valid. So if you do get a pullback into the one zero six one area, you want to be a buyer of the Zealand dollar for whatever reason, then I think that is a decent technical area to look for any kind of long trades, short trades. Looking to short this New Zealand dollar and buy the US dollar. I think the first area is going to be at least six to six to twos around here to look for any kind of short trade. We've got that intraday of, I should say, daily support and resistance as some confluence. Pound dollar, pound dollar keeps going from strength to strength. And we've been I had a long bias on the on the pound dollar for a little bit now. And so again, my price is to go long. And prices just keep going higher. So waiting for a decent pullback on this this trade or on this pair. I think that level's probably gone now into that supply zone. So we're probably going to be may head up into this area here, which is supply zone from June 20, 2022. But my bias is to go long anyway. So I'd be looking for any kind of pullbacks into a demand zone. I still think that this zone down into the one to fours, even just one to three fifties and below, I think it's going to be nice for a buy trade if you can if prices can come down into that zone. We have made a higher high. And so there is technically a demand zone right here as well. You do have also a nice decent area of support in that zone as well. And so, yeah, I think the first area to that for any kind of buy trade is going to be again around that one, two, three, fifty area before and even better would be down into the one, two, three's round number. But yeah, anyway, any pullback, I think it's going to be a decent buy. The pound fundamentally. Let's have a look. UK interest rates. Goldman Sachs is quite interesting. Goldman Sachs sees Bank of England. Base case rate rising to five percent almost matching the Fed. So Goldman Sachs, as it expects, UK borrowing costs will close a gap with the US raising its outlook for the Bank of England's key rate to five percent. So the pounds that had a reversal of fortunes this year, it was actually expected to go into one of the deepest recessions out of the G 10 currencies. And it's just raised an incredible bounce back basically since the beginning of the year. Year to date, you can see pretty much the beginning of the year. We've pretty much gone over so over a thousand pips. No, that's 700 pips to the upside. So yeah, it's been definitely a major comeback for the pound and appreciation. And I think it probably will continue. But also as well, one thing to keep an eye on is their GDP, right? GDP numbers and they may suffer the same fate as as the US in terms of stag inflation, where the inflation is still high, but the economy contracts. But for now, all the forecasts are pretty much saying the bank forecasts are saying a higher pound, even as high as one 30s. I've seen forecasts. So any pullbacks, I think are definitely for me anyway, buying opportunities for now, as long as the data supports the narrative euro dollar. So again, my bias is to the upside. You know, one more hike for the Fed is expected and two or three more hikes is expected, although whereas it now Europe, their latest GDP, Eurozone avoids recession, but inflation picks up. So yeah, it was OK numbers, I think. For the Eurozone economically, it just avoided a recession. It was below it the numbers expected. But again, it was above zero. So that was decent for the Euro and inflation picking up, which basically means that the Eurozone inflation fluctuates, tests ECB as it weighs actually a smaller height. Data will be released in 48 hours before Frankfurt session. And what was this? This was the 28th, 29th year. And so. And so, yeah, the numbers to talk about the inflation numbers will be crucial, but yeah, and the economy is crucial for a larger hike because the economy came out a bit. Numbers came out a bit less than expected. I think what they're going to be is a bit more cautious on the hikes, but they still are expected to hike more and further than the US is. So whereas the US are expected basically at one and done, the Euro area and the ECB are actually expected to hike several more times. And so with that being said, any pullbacks, I think, are buying opportunities for the ECB, providing, again, the economy can support their the rate cuts. So any pullbacks into this area, nothing really changed from last week because we had one, two, three, four, five days. Yeah, we haven't really had a deeper pullback in to get really kind of long on this currency pair. Although, again, you can draw a demand zone right there. So yeah, many pullbacks are still one of nine fifties, one of nine would be better, the deeper, the better, right? Ozzy Zola. So Ozzy Zola came down into this lower end of the demand zone and the Australian dollar is actually expected to hold rates. And so they're going to release their statement, the RBA. And I think there is a there is a potential for the this to actually go higher if they do hike one more time. Right, I put down here is one more hike expected in fact, that's not right. In fact, they're expected to hold. And so because they're expected to hold H.O.L.D. Because there are expected to hold at the next meeting, I think this has also been priced in in terms of the hold. So if they do hike, I think the Australian dollar will appreciate or should appreciate because that will take the market by surprise. And so, yeah, I do think that that is there is an opportunity if they do hike, if they do hike rates. Yeah, that's pretty much it. And gold, no, in fact, one second before I do gold, we go back to the Australian just in case you do want to be a buyer of the US dollar against the the US, you've got some supply zones here as well. So, yeah, I think what you need to do, again, if you have a wide area of supply, a daily supply, but one of the one of the things that you can do, one of the things that I look at is just looking at support and resistance within that area of supply. Right. And so if you are looking to trade, which, you know, you don't know which zone to kind of look at, then just look at where you've got, you know, some confluences in that area of supply, one of them being horizontal supply and demand. So that would be really the best area to look for any kind of a short trades or just above it, in fact, in a fresh area of supply. And then finally, gold, so gold looking for another move higher, depending on whether the US dollar, you know, comes in a bit weaker after the rate expected rate hike, I should say. Also, I did find this with HSBC and it talks about the talks about gold, and it says, however, our precious metals analysts think that there may be limits to how high gold prices can go. First, a lot of risk, especially geopolitical and trade risks may have been priced into the market, should market volatility decline, a safe haven and demand for gold may erode. In addition, it is likely to see further dollar weakness this year in a view, in our view, a weaker dollar supports gold prices, but may not propel gold higher as gold prices are at levels consistent with further dollar weakness. And so, yeah, interesting. And they say if anticipated rate cuts for the dollar in the second half of 2023 do not materialize, gold may be undercut. And so there's always that factor as well. The market is expecting gold to actually also the dollar to and the Federal Reserve to actually cut rates. And so if they don't cut rates this year, or the expectation is that they don't do it this year, maybe do it next year, then that has to be priced in and then that could affect the price of gold, right? And so I do think that gold is a buy, ultimately, so any pullbacks into these zones, I think, are decent buy opportunities in 1940s, 1950s, and even better would be down into the 1900s, right? So anyone who missed out on this gold buying, I think it's going to be really nice, a cheap price to buy gold. And you're seeing, in fact, if you're zooming out, we've come up to a high and this is obviously seen as an expensive area for gold, right? Who wants to buy it high? It's nobody. So profiting what we're going on there, maybe some selling, but some reloading on buying for gold, you know, further down. So let's see what happens with gold, but my bias would be to go long. Anyways, guys, that's it for this week. And in fact, I'm going to answer the question that someone sent over. So just as a reminder, two questions. And I think I think starting off with the second question will help answer the first question. And so the first question was, how do you know what's priced in or what the percentage expectation is for other central banks? Just like we have the CME Fedwatch tool for the Fed. And the second one is other. Another question is, how do we know what the whisper number is? I don't know what the whisper number is. I'm assuming that's a forecasted number for some key news events such as the dollar, such as one payrolls, retail sales and all. And so it's really important, actually, in fact, to understand the the concept, first of all, of priced in and what is priced in. And priced in basically just means that any everything that is known in the market, the market has valued already, yeah, has priced in that value. And so you have a situation where there shouldn't be any surprises in the market. And if there are surprises, that's where the market has to now price in new information in terms of the value of an exchange rate. And so if you understand that, then going to the forecasted number and how do we know what potentially is priced in is if you go to any calendar trading economics, right, you'll have a forecast. Right. This is this is trading economics's forecast. And then they have a consensus. So the consensus number will be they'll get from I don't know where to get it from. But basically they do have they somehow get there to get the market consensus number and then they have their their own forecasted number from the data. And sometimes they agree and sometimes they don't. So, for example, you'll see I send manufacturing PMI. You'll see the consensus is four point six, sorry, 46.7. But trading economics will be 46.5. Right. But it's somewhere within that region that that that that number. Right. That forecast now. This is already likely to be priced in on Monday because these forecasted numbers have come out maybe a week or two in advance. And forecasted numbers, I don't know exactly when they come out because economists really have to kind of crunch the data and analyze everything. And then they kind of put it out whenever they put it out. Typically, it might be maybe about a week or two before they released the numbers. Doesn't mean that they haven't done the calculations way before then, of course, because as well, banks also have their own economists and then they've got their own calculations. And so once their economists do their analysis, then that actually has to get priced in as well. And so it's almost like you have to forward think, you have to think about, you know, what is coming in the future. And once you understand what is likely to happen in the future, then you start to either buy or sell or don't do anything. And that's what we're doing. And that's what the market does when it comes to pricing in. So the numbers are really known if maybe a couple of weeks in advance and anything outside of the normal then has to get priced in eventually. And then by the time the retail trader, right, sees the release number, they already know what has been forecasted. They already that numbers, you know, is old because they've they've known what the number is two or three weeks ago. Yeah, or they've estimated or forecasted the number. And so, yeah, that's pretty much, you know, when we talk about what is, you know, priced in and the only way we're going to know what the again, if the forecasting number is, is really from reading either the calendar, the data icon, you know, trading economics or Forex factory or wherever you get your calendar data from or by reading a lot of bank forecasts, which we found and have access to in the Discord group, right? So there's that. And the second work is the first question was, how do you know what is priced in? And so and to what percentage? Nobody really knows what 100 percent is priced in. We have a gauge, I guess, right? And this is one of the best illustrations of it in terms of the Fed Watch tool. And so the Fed Watch tool is just looking at the really straight from the side. It says, what is the likelihood that the Fed will change the federal reserve target rates or interest rates at FMC meetings according to interest rate traders and allows the probabilities of changes to the Fed rate and US monetary policy as implied by 30 day Fed funds futures pricing data. So, you know, speculators, big money are making, you know, bets, futures bets. And, you know, analyzing all that data, it is like 83 percent of them of the market that they've, you know, surveyed thinks that the there's going to be a, you know, a hike, right? Now, the closer you get to the event is the more it gets priced in. The further away that you get, you know, to a from an event that may have yet to be priced in because obviously the further out the event, the harder it is to predict, it's easy to predict something that might happen tomorrow than it is something that might happen next year. And so but nobody really knows. These are just tools, you know, that we can use as retail traders, but also as well. If you understand really the relationship between GDP interest rates and inflation, then you can kind of get an idea as to what is being priced in. You don't necessarily even have to look at the Fed watch tool. Because if you understand that, for example, GDP is growing, right? And the same inflation is, you know, above the central bank's two percent target. Sorry, one second. Yeah, that's it. Sorry, I can't even do that. Right, so two percent target. Yeah, GDP is growing and the inflation is above two percent target. Then it's likely that the central bank will start to high crates or continue to high crates. Yeah. And so let's say, for example, on tomorrow, let's say, for example, they have an announcement for this current Federal Reserve announcement, right? So you've got FOMC this week. Now, the federal would have already priced in, you know, this current data, but also as well, they're going to have to try and price in the June's data, right, based off of the probability of them hiking rates at the next meeting. Yeah. So they're always looking at least one month, two months, three months ahead. And what's the likelihood that they will hike based off of today's current data? And so that is really how you're looking or how you should look at the market, right? Is today's data, right? What? How is that going to affect the price in the next month for two or three? And as long as the data keeps supporting that narrative, the market will have to eventually price this data in if it hasn't already. And you know that it hasn't typically because if, you know, they've got a meeting in in in June. And May's data comes out really strong. Then they're going to have to, again, price in the higher chance of there being a hike in June. And that's why you start you start buying in May in expectation for June's rate hike and you buy in June for July or August expected, you know, rate hike. And so, you know, the chances of a rate hike being priced in is is pretty much 100 percent the closer you get to the event. The further away you are from the event, the less likely it is to be priced in. Yeah. And so if you're looking at trading economics or trade or trading or Forex factory and thinking to yourself, well, I'm going to press buy or sell. Yeah. Based off of the number that comes out, you're always you're always too late. It's just not going to happen. You know, the smart money, right, are no. You know, the data, the how, you know, fundamentals actually work and the sentiment actually works and they're always ahead. They're always looking two, three, four months ahead of time. And unfortunately, unfortunately, we, you know, don't have access to all of the central banks, you know, tools. In fact, in the group, we have access to, I think, the Canada one. And then we've got the Australian one. We used to have the Bank of England, but I think they've stopped that now. They used to also be from the CME as well. But but yeah, we don't have that anymore. But ultimately, you don't actually really even need it if you understand, you know, the fundamentals ahead of time and what the data is actually telling you what the central bank is likely to do at their next meeting. And typically, again, like I said, like I said, I had, you know, you have GDP. And inflation data tends to come out ahead of the meeting. And so what you're looking for is, you know, the future meeting. And so the data today, if it shows positive growth, then the likelihood is that they are going to hike, you know, at the next maybe meeting or two meetings. Yeah. If the data is a bit somewhat suspect, where you have, you know, data that is, you know, maybe GDP isn't growing or contracting. But inflation is going higher than the chances of them hiking at their next meeting is probably maybe looking, you know, not not so good simply because again, as we covered earlier, that might mean stagflation. And so it's difficult to hike rates in a contracting economy. It depends on how bad or how much the economy is contracting. Of course, there's varying degrees of that. And so that will also play a role in, you know, the future expectations. But just to guess to kind of, you know, summarize and round up and then this. And hopefully you'll understand it is that you should always try to think to, you know, one month, two months, three months ahead. Right. And judging but judging that on what the data is saying today. Yeah. And also as well, if you do read up on analysts thoughts, you know, there's a way smarter minds in us that we should look at and look towards their guidance. If you read maybe 10 different reports and maybe seven are saying that they expect the Fed to hike rates in June's meeting, for example, then go with the majority. Yeah. Don't go with the three that are saying that they're not because, you know, pretty much the big money is saying that, you know, they're telling you where they're going, right? And I know there's a time to be contrarian. You can be contrarian sometimes, but at the beginning, when you try to understand fundamentals, I think you should go with the consensus more often than you don't go with the consensus. Anyways, I hope that does help. And yeah, I think that's pretty much it. I think this is something else I should be talking about. Also, as well, actually, matter of fact, here's another thing just quickly looking at the time when we talk about pricing. Yeah, I'm talking about pricing. And pricing isn't just a single binary number, right? It doesn't mean that that is the actual price. It's important to understand that prices are always in some sort of auction or what is known as known as an auction, but, you know, a trader's will look at it as a range. Yeah, a ranging market, some degree. And yet prices do trend. But it typically trend within a range, right? So you can have this could be a thousand pitch, for example, a move to the upside, but overall, it was in a thousand pip auction. But the point I'm trying to make is this is what is known. Yeah, what is known about, you know, this auction and this in this range is that, let's say, for example, the Federal Reserve, you know, the market expects the Federal Reserve to high crates once and the Euro to high crates once as well. Yeah, that is definitely known by the market. Then that is going to be priced in, yeah. And the pricing in is some people are going to, some traders are going to believe that, you know, that it should be an exchange rate of maybe one ten, yeah. And some traders might believe that what is known, yeah, the value of the exchange rate should be something like maybe one oh eights, yeah. Should be basically, you know, a fair value. Yeah, so one oh eight. Not everybody is going to agree on the value of the exchange rate, just like in an auction, yeah. Some people, you know, you might go to a property auction and some people are willing to pay more than others and some others are not willing to pay as much, right? And the same thing applies to the forex market. Some people are willing to pay, you know, maybe one ten. Some people might think that's expensive. Some people are willing to pay. I think that one oh eight is a bargain. So there's a constant auction, right? In terms of what, you know, is known in the market, right? And that is what when prices being accepted like this, yeah, that actually is what is known as priced in. The range between the high, maybe an expensive area and a bargain area, yeah, is what is known as priced in. That is priced in. Priced in isn't just a single number, you know, on a price chart, it's a price range, a price auction. And so you typically have, you know, these price auctions everywhere on different time frames, but I tend to look at the larger time frames and look at the institutional, you know, auctions and where they think that expensive and, you know, a bargain price is and then from there, you know, plan accordingly. And so if new information starts to come in, let's say for example, new information is that the euro is going to, you know, hike, you know, a couple more times then what tends to happen is you then you might get a trending market where it breaks out of the price range and goes higher. And then what you'll get is that will be priced in and then you'll get another auction to some degree and the auction might be between 115 and maybe 112, for example, because that new information has to be priced in once, you know, they discovered that new information, but then once it's priced in, then the value of the, you know, euro dollar would be worth between, you know, 115 and 112. That would be the auction and that would be the priced in number, yeah. So hopefully that makes, that adds to your knowledge in terms of what is priced in and what isn't. So yeah, anyways, guys, take care and all the best, speak to you all soon and have a great trading week.