 Hi, my name is Leon Rowe 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. Hope you're all doing well and had a good trading week Only a few more weeks trading weeks, I guess before really the end of the year I think trading really starts to slow down Around mid to late December and late December meaning maybe the second third week of December. So Few more weeks to go Before 2022 we say goodbye. Anyways, don't forget to like subscribe and share if you like the Videos that I provide every week and also as well. It's just a quick reminder An update. I was saying I want to release this this webinar that I've recorded on the 3rd of November and I set a new target for 10% YouTube likes so one in 10 of you to just like The video if you do like it, of course, if you don't then it is what it is, right? But we failed to reach that target as well. So I'm Unfortunately, I can't release this. I can make maybe one more go of it If you can do it this time around this week for this video lots of information I've got for you, especially from some bank analysis as well from a JP Morgan, right? And it's the stuff that you can't get anywhere else but if you do like this video cost you nothing to just like it and If we can get at least 10% in terms of the views versus the likes then I will release this webinar which is forecasting forex trends that last for months and I have You know a lot of information in here and it really kind of just gets down to the meeting potatoes of Of what you really need to know about fundamental analysis and forex anyway, so just a like subscribe Don't forget to like subscribe, especially the likes 10% at least of in comparison to the view So if we have a thousand views, we need at least a hundred likes and Yeah, let's I want to get this information out for you, but you got to do something for it Just like it, right? Just like the video anyways Let's get into the week ahead and the week ahead It's found on trading economics and I'll zoom in and so It'll be a very busy week in the US with the labor report Taking the central stage followed by speeches by several Fed officials second estimate of GDP growth Which isn't actually that important because the first estimate is really the most important second estimate should be close to the first sorry the first Number and data and unless unless this second estimate is totally way off and which would surprise the market But typically they are quite close ISM manufacturing PMI CB consumer confidence of personal income and spending also potential be given to inflation rate releases of the Euro area Germany France Italy Spain and Indonesia finally third quarter data growth rates Will be published for Canada. So this is their first one So this is going to be important for Canada in and Switzerland and manufacturing PI PMI's for China Canada and Australia the currencies that we're looking to trade, of course. Yeah, there are some details if you want to read that Go to a trading economics comm and click on the week ahead Tab, I think it's actually probably the other one at the top normally It's might be in here somewhere, but it's at the top so click on that and then you can have a read of their synopsis anyways getting on to the technicals and some further fundamentals and Starting off in the dollar index and dollar index is just a measure of dollar strength against various currencies of the major currencies and we've had this You know, we had this massive sell-off a few maybe about two weeks ago or so based off of a CPI figures Coming in slightly lower than expected But now the the the dollar is actually finding value in and around this area so between the 105 free twos and the 107 But we'll 108 right so I do think that the dollar is still a buy my bias is for dollar buys And that's based off fundamentals and that's also backed up by some bank analysis. And so We did there is some some not so great headlines in in Bloomberg says it says the Treasury markets big recession trade is gathering momentum so investors see rates lower over longer term even as Fed hikes and slew of data Of key data coming up on jobs manufacturing and inflation so the bond market Which is really the smartest market in the world because they are especially and very relevant to to forex trading because they understand the economy and this and how inflation and GDP can affect Bond yields and prices And so And it's basically the same things that we look at in terms of forex fundamentals And so, you know, the bond market is definitely something to to to take Seriously and the bond market is zeroing in on a US recession next year with traders betting that the longer term trajectory for interest rates Will be down even as federal reserve is still busy raising its policy rates a long-dated Treasury yields Already below the Fed's overnight benchmark And there is still an extra percentage point of of central bank increases priced in for the coming months And so it says activity has also emerged in the options market That suggests some are hedging against the risk that policy rates could eventually half From their currency for sorry from their current levels. So that's very interesting very interesting That a potential recession of the month the bond market is pricing in a potential recession But there are some positive signs in at least in the short term and The US jobs report is likely to show subtle progress for the Fed right eco week So payrolls may show a second month of decelerating labor market And it talks about the the latest reading of the US labor market on Friday is expected to show job growth on On more of a downward glide path sought by the federal Policy federal reserve policy makers in their fight to beat back inflation So so payrolls are projected to have risen about 200,000 in November a second month of decelerating gains such growth While moderating is none of that's consistent with solid hiring that will extend the feds rate hike campaign into 2023 right that's Important and so again if you're looking at you know Jobs that is really an indication of or one of the major indications of how well the economy is doing You know hiring and or the amount of hiring that's going on unemployment employment rates and so You know the numbers already been priced in at the moment so if you do get somewhere around the 200,000 mark and figure then that is actually what the Federal Reserve wants and as they say It will you know solid hiring that will extend the feds rate hiking campaign in 2023 It's also as well CPI that must be watched and if CPI comes out as expected as far as Maybe something like Around a 7.7 or even a bit higher than that will also extend The rate hiking cycle for the Fed because they need to try and get inflation down and if it doesn't come down naturally Then they're gonna have to try and you know force it down with a continued interest rate hikes Which then would make the the dollar a buy right is that it's still a buy now Another thing that is gonna, you know support the the dollar which isn't necessarily always spoken about is risk off and China, right? Covid unrest boils over as citizens defy lockdown efforts. So there's Covid is is on the rise in China lots of protests going on and With Covid lockdowns comes obviously The effect is the economy right and the economy can't grow if Citizens are in their homes and being you know locked locked up or locked down. So with that becomes risk off sentiment and risk of sentiment the dollar has benefited and does benefit in a risk of environment as well, so That also kind of supports the dollar And this basically backs up the the data this was from MUFG and many of the guys who are in the You know members discord area, you know have access to this information And so you're seeing you know a rise in coronavirus this coronavirus China confirmed cases and it's you know basically going higher and higher and So also as well Going back to the dollar as well You know a lot of traders will look at you know, this dollar, you know pullback as something of you know Of a reversal when in fact if you're looking at this being dollar value and again, this is a chart From MUFG that I pointed out a couple weeks ago when we did have the actual You know major move to the downside a couple weeks ago when the CPI data came out I was saying in fact prices are just coming down to fair value because if you talk about you know the Deviations of price and if you're looking at this just simply from an expensive and bargain, you know perspective You know the dollar was expensive up at the 115th right the one 14th 115th now we're coming back down to the 105s Yeah, that is fair value right the mean or the average Is also known as fair value and so for me buying a dollar with highs, you know, it's never really the best thing to do and so You know, I look at this, you know pullback as just a buying opportunity and it makes all the sense in the world So going back to the technicals spent a while on those fundamentals for me Vice right right here Demand and that's not to say that prices are going to bounce from here right nobody knows but For me there there is some support around here looking at at least the 105s Maybe the 104 50s and this is also data dependent as well also as well. I think I've got it on the next slide, right? Yeah This is a report from Goldman Sachs in fact, which kind of is slightly contradicts one of the One of the reports we're talking about in terms of the Treasury market pricing in a potential US recession next year It says the Goldman Sachs who has you know the smartest guys in the room, right when they release a report Which isn't necessarily available to you know the public and thank you to Drew Stevens for posting this he's a An honorary member of the of the group and and quite plugged in into you know In the industry He shared this with the group and it says our central case This is their latest report right is this was maybe a couple days maybe earlier this week they released this So it says our central case is one in which the US economy sees a slow but gradual cooling and inflation Which is fine through 2023 while avoiding a recession, right? So that's you know that is quite key. So there's you know 50 50 chance the last time I saw The probabilities of of a potential recession Goldman Sachs again think that there's not gonna be one and so You know even if there is one again even in comparison to for example the the UK which would get on to in Europe The US is still best place because they're not in a recession yet. Whereas the UK in Europe Actually are probably likely to enter into a recession sooner. So For me with them going into a recession sooner than the US for me the The dollar is still a buy, right? It's still a buy regardless of what prices are doing, you know to the You know in the short term because smart money buy low, right? They look for value and this is basically a value or potentially a value area if you understand, you know, how to value You know a currency So the meat buys all the way if you do want to get short and it's not buying on the dollar index Of course, it's just looking at the dollar index as confluence. So it's come down to a nice Level where it's shown that it's a bargain Right around here and our prices have come back to the 105s And this could be again another potential bargain that might slightly go a bit lower to the 105s round number Into that second zone around here before going higher. So I'm just looking for buy trades on the other dollar pairs. Not all of them, of course, but That's what I'm looking at. Anyway dollar yen the dollar yen again pretty much similar in terms of the Dollar being a potential buy at least in the short term. There are reports that In fact, the yen could strengthen into 2023 and that is a theme as well Or should strengthen into 2023. So I do think any pullbacks Into maybe the one four sixes and even the one fifties if there are any actually quite decent shorting opportunities If you are if you do want to get long on the dollar yen I think now is a decent time not necessarily the strongest area of demand not at all Might want to wait for maybe the one three sevens if it can get down there, of course Nobody knows no one knows where the turning point is going to be That's why we manage our risk right and on trades and then turn to small positions But I think this is a decent area to potentially look for a potential long trade I say a decent. It's okay. It's it's okay But I think the better area is pretty gonna be the one three sevens is where I would probably look towards Getting long if I was trading this pair. I'm not really that interested in this pair at the moment Um dollar Swiss again similar thing, right? We found some demand Right strong area of demand right here and then prices bounced off of that area even after this massive set off We're back down here again You know the first touches of levels generally the the strongest Or the best area best times to look for for long trades second areas not so much again Doesn't mean that you can't reverse here, but if you get maybe a move to the downside Before going higher and you want to be a buyer of the US dollar over the Swiss Frank then that is a trade again I'm really interested in in this pair. Although I am a buyer of the Swiss Frank I'm definitely by the Swiss Frank, but just not against the dollar. So Yeah, it's not my It's not the pair that I'm looking to trade there are definitely bear trades out there But if you are looking for long trades and buying the US dollar then that's where you need to be Positioned and if you're looking for buying the Swiss Frank, then you're looking for the 95 50s to 96 area to look for buy trades there dollar CAD and and so kind of established a bit of a you know buy and Short trade there. So some supply and demand in either area again not really a pair that I'm interested in although if you know What if I was gonna be a buyer one of the two? I think the dollar isn't is is best placed looking for especially with risk off and Canada being more of a risk on currency. I Think that's a decent Area to look for a potential buy if you do want to be a buyer of the Canadian dollar prices do come back up to the 1 3 5s 1 3 5 50s put a top end of this area of this supply zone I think that's decent technically for a for a short trade again Really the Pair that I'm interested in New Zealand dollar interesting so Zooming out a bit always zoom out The New Zealand dollar the RBNZ their central bank ended up hiking rates a bit more than expected But to counter that as we've just seen there are problems in China with the COVID You know issues that they do have and so That may affect the the New Zealand dollar because of Their proximity geographically of location With and they trade I guess that they're trade partners with China and so right now with risk off New Zealand not being a risk off currency the dollar being a risk off currency that the dollar does start to strengthen based off of you know risk off then I think this is a decent short But the problem is if you're sticking to you know the supply and demand rules You did kind of get a close above that area and so Yeah, it's It's not really much you can do with with with that strategy But if you do want to be a buyer of this currency Then you're looking at Demand zone if you want to continue to potentially buy a trend And you don't you know really care about fundamentals Of course don't know why you would be here if you didn't care about the fundamentals But if you do want to be a buyer in the New Zealand dollar, then you know pull back into this 61 50s to 61 or 60 65s would be a decent area to look for buy trades, but With risk off I do think the path for these resistance now is actually probably to the downside and let's see I think you've probably got some confluence in around tears might be might might might be a fib Technical confluence Nah, she went way above that didn't it? Yeah, that was where a lot of fib traders would pretty end up getting short And then probably been squeezed now, but um, but yeah, I do think this area here is is for the Is is for the short not really a pair that I'm looking to trade But a pair I'm looking to trade is the pound dollar and we've just had this massive run Taking a lot of traders by surprise. I mean, there's no real reason to really want to buy the Pound but I was saying earlier in the week to the traders in the room that When you have the Thanksgiving weekend and happy Thanksgiving to anyone who was celebrating And at the time off what can happen is is that you get? like, you know trading and so Markets can be pushed in certain directions, right? If you had a lot of stop losses above a certain area, right? Whether it's pounds whether it's, you know dollars, right? Then you can get that, you know that move to the upside for me It's more of a short squeeze liquidity hunt this whole move here. There's no way I'm looking to buy the pound not at all and you know, we talk about you know the the the Dollar and the US potentially going into a recession and questioning whether they will or whether they won't Whereas for example the UK You know UK recession worsening worsening as living costs squeeze bites PMI shows So reading suggests economy is shrinking at a 0.4 percent quarterly rate Services to see largest fall in new orders since January 2021 So the UK economy is in recession with the downturn expected to worsen heading into 2023 a key survey warned, right? You also have for example the UK business confidence drops to lowest since pandemic lockdown. So UK business Confidence has dropped to its lowest since March 2021 when the country was struggling with coronavirus lockdown despite some firms Expecting an improvement in trading prospects. That's the conclusion of Lloyds Bank PLC business Barometer which said confidence for 1% to 15% in its October survey the number of Employers expecting to increase staffing levels rose for the first time in five months and almost half of firms also report a better outlook, right and So It's not looking great for the UK My regardless of how bad you might think you know the headlines are for the US the UK is in a worse position And a lot of times price doesn't always reflect value Which is the reason why you can buy for cheaper, right? This becomes starts to become cheap and things can stay cheap for a while But eventually value will show its show its face And really smart money. I think a lot of smart money were You know understood and understand to go short, but if there's not enough liquidity for the downside Or to the downtime downside to facilitate the selling and it has to search for it above the market And I think this has just been one of those, you know yearly events one once or twice a year event where you do get Short squeezes, right? I ended up losing a trade here as I said last week. Don't care if I lose the trade You know around here because ultimately I've got back in around here And my risk award in fact, you know is now a lot better if I'm right about this trade Then I have actually a Lot more downside potential that I would down here, right? So from that perspective You know, don't mind losing, you know a trade or two or three if I'm going for, you know, eight nine ten 15 to one type traits. So Yeah, that's where we are. Of course prices could actually even go higher this week, right? Who knows and in fact it wouldn't surprise me It would not surprise me if prices eventually ended up kind of going Towards the one two twos one two threes It wouldn't surprise me and even slightly above that but ultimately There's a lot of bank analysis just in that, you know, there's You know to really kind of buy the dollar and go short on the on the on the pound So that's my analysis if you do want to be a buyer of a pound and you do want to be a trend follower, then you're looking at Buying at that area there. There's a nice demand zone around the just below the 119 areas to look for a potential buyer, but for me, this is, you know, very Undervalued in terms of the dollar and so yeah, I'm positioned again getting Getting short on this again. So let's see what happens there Euro dollar again, you're a dollar was kind of stalled out. And so we see Here we are bit of demand there, but we've you know, touch this supply zone once and potentially again twice again, I'm short on this as well on The euro dollar and I was short actually in and around here a couple of weeks ago We've pulled back and hopefully we do get a bit of a rollover whether it's this week or next week and again, even if You know prices go higher. I'm still going to short because there's no reason to really buy the the euro and Euros Europe's two top economies contract as block already in recession It's what they report into French composite PMIs fell to a 20 month low in November and German activity gauge improves still in negative territory though, so You know major problems major major problems with With the PMI data talking about expansion and contraction, right? And they're below the 50s So that's in the contraction area in terms of the PMI data. So Again with that, who is the dog with the least fleas for me? It's gonna be the the US dollar So for me the the regards what price has been doing in the short term I am gonna be still long on the dollar and so Yeah, that's where I'm positioned But if you do want to get long on the euro thinking that the euro is a bargain at that area in that zone It demands on the 103s to 102 20s then you know, of course be my guest Also as well, I think there was I did say there was a JP Morgan report didn't I? What did I actually do it as Goldman Sachs? That was that that was that one second In fact, let me just pause and find it. All right. So here it is JP Morgan Their latest report euro malaise not inflection So prospects for a convincing rebound appeared dim with energy dependents US flirting with recession tightening Financial conditions and poor carry the baseline for 2023 looks for euro dollar to average to 95 in the first half of the year With a test towards the 90s possible and this is assumes that no deceleration in geopolitics So, you know going back to the Chart on where we are they think that prices should come back down to the 95s Which is basically the lows of this area here And going down to potentially the 90s. Yeah, but this is again assuming that Russia And Ukraine find an agreement. There's a de-escalation And if there is a de-escalation and all bets off the table in terms of selling the euro I'm gonna be a buyer of the euro. I'm just letting you know that now Of course, it's not financial advice. It's just telling you what I would do if if it comes in agreement And there's a de-escalation in the war then You know the euro I think is definitely a buy but as it stands right now That's where JP Morgan who again smartest guys in the room Will let in you know, they're forecasting to their, you know paid clientele, right? So they're not trying to mislead anybody Otherwise if they were constantly trying to mislead people they wouldn't be in business and this is not a public That's not a public document that you can just get anywhere by the way and so This is where you know, they're forecasting and so It just aligns with my fundamental analysis and gives me confidence, right? So that's where I'm that's why I'm looking for for some short trades in the round there and Yeah, that's really where where I am looking at the Aussie dollar and Aussie dollar did come up again to a nice supply zone Pull back again. I do think that we've risk off Seeing some risk off were from China We should want to see prices start to You know move to the downside again It's there all there But I think if the market does start to take risk off into account then because it doesn't always do it doesn't always You know pay attention to risk sentiment But if it does then the dollar for me is gonna be a buy the Australian dollar was actually one of the currencies I'm looking to buy at some point soon Going into 2023. I think it's only one of the one of the best better currencies To look to buy it when things start to improve. So any pullbacks I think a you know potentially buying opportunities But just not on the not for the US dollar or against the US dollar Aussie yen Again, you would probably think the same thing in terms of risk off would mean that the Australian dollar should probably want to sell off and the Japanese yen strengthen. So if you do get an opportunity to go short With risk off and you want to trade that risk off You know theme and play and any pullbacks to the 95s. I think a decent areas to look for short trades But into the new year possibly I think the 90s and just below that are going to be really nice buying opportunities for the Australian dollar and Finally gold again gold benefiting from a weaker dollar But this might be slightly short-lived if prices can kind of come down into Any of these zones? I think that's going to be really nice Definitely nice buying opportunities for gold if you believe that, you know, the world is going into, you know Recession next year things are going to get worse and gold, you know Typically is a hedge against inflation and I would still say that it is Regardless of what you're seeing in price, but in the short term, but I do think that gold is going to be a buy for 2023 and Yeah, these are going to be the areas to look for potential buy trades if you're looking at the shorting and At least in the short term then you're looking at a pullback to This area here before looking at getting short on gold and again that would probably coincide with Any kind of dollar strength. So if you start to see for example CPI You know go higher if you start to see You know jobs for example Right and employment is is positive then an employment, you know is up unemployment is down Then the dollar should strengthen which would have again a pretty more of a short-term effect on on on gold Because the Federal Reserve are gonna potentially just to you know, just keep hiking, right? So they raise their red their terminal rate. Anyways That's it for this week. Oh also before I forget Train 180 membership opens tomorrow. So Monday the 20th of November, which is tomorrow and closes on Friday The seconds don't forget if you do want to join and the final opening of 2022. So you only have about a week To enroll next enrollment will be late January early February most likely early February 2023. So Yeah, if you do want to join Go to the website trading 180 comm and I look forward to working with you If not, I wish you all the best for the rest of the year and it's 2023 Take care and I'll speak to you all next week You