 Hi, my name is Leon Rope currency trader and trading coach at trading 180.com and welcome to this week's supply and demand for us and gold fundamental and technical analysis the week ahead starting April and I hope you had a good trading week. If not, don't worry This is a new week as long as you didn't blow up your account You should be all right member keep your risk low and you can define your risk and your rewards You know as long as you go through a good risk reward. You should be okay. So looking at the week ahead a week of Starting the 8th of April and this is from Trading Economics and it says this week the United States will capture investors' attention With its inflation rate and FOMC minutes adding to the watch list are Michigan consumer confidence producer prices as well as exports and import prices Complimented by several speeches from Federal Reserve officials Globally interest rate decisions are on the agenda for the Euro area Canada and New Zealand That's going to be very important in China spotlight will be on Consumer and producer prices alongside Trade data and new Yuan loans Europe's focus will be also on Germany Germany's foreign trade in industrial production and UK's February GDP reading and industrial production finally Australia Will release NAB business confidence and Westpac consumer confidence data and Japan consumer confidence so some sentiment readings there and So, yeah, let's go over some of the fundamentals and The charts and a bit more detail before actually we do just getting into some trade updates and something I Guess I'll share a trade on Natural gas. It's not really a trade and an appare and That I talk about I guess on this channel. I do trade some commodities And I'll give an update on the Canadian dollar yen as well as the euro yen. It's I haven't taken any new Forex trades, but I have taken some profit on the Canadian dollar yen pair We're looking at natural gas Looking is from a technical analysis perspective This made all the sense in the world to To get involved in this in this pair because we had on a daily timeframe chart We had a nice demand zone here, right? And so You can see where prices made some higher highs higher lows here and You know basically Putting away and what does that really kind of tell us that tells us that this area here The higher it moves away from the low and that demand zone that actually that's a bargain area Let's demand it is demand at that particular price. Now when prices come down here You know, you're gonna have bargain hunters now No one knows exactly where prices are going to turn right because at the end of the day Investors and anyone who is looking to buy natural gas, you know Once a bit of time and also to kind of buy as much natural gas as they can Hence the reason why you had, you know a couple of weeks of prices moving sideways and then it went kind of cheaper, right? And so the absolute bargain hunters because this was a bargain down here Prices were seen as a bargain right here and prices went to the upside. So that was really The play and where I entered in fact was on a four-hour candle. I'll just show you the The entry it was right here with a stop-bloss was somewhere around there and I Actually held it for about a two-to-one to the top of this This little mini range auction right here and then took off around 80% profits off this and then I've been Basically move my stop-up as well to just below this swing nearly got stopped out on the remaining position on As it as prices came down but if I even if I do get stopped out and being stopped out on really just the 20% of profit of the open position, right? And so taking the majority of profit off here Two-to-one and then I now just swing trade in the rest So I can't lose in fact, I've banked the majority of profits So really that's that was the trade and the the trade set up on natural gas Figured it was a decent Opportunity and really that's the whole point in Trading supply and demand really is actually understanding where bargains are right as well as the fundamentals behind Natural gas and why natural gas is likely to be a bargain You can you can look at it on from a price perspective, but also fundamentally you need to at least understand that You know the the fundamental side of things and what gives something value. So that was really it and And made a bit of money on that as a trade update on the cad yen So this was the trade and I've been talking about this for the past maybe a couple weeks now and It's really kind of moved a bit on the slow side, but It still worked out anyway This is now a break-even trade and the reason why it's a break-even trade is is because As I've explained in the previous week's videos What I typically do is I enter into three positions, right? I'll try to enter into three positions I enter into a market order and then a 50% pending order and then about a 95% pending order sell And so if prices ever come back Which they might actually managed to do and I nearly got stopped out on this as well Right here on the Thursday didn't quite stop me off I think it's about three pips away from being stopped out, but Luckily I didn't but what it allows me to do then if I'm right about this whole trade idea and prices eventually reverse I'm getting in at these highs Up here then it allows me better risk reward on the trade idea, right? So rather than just entering into one position down here, which is what a lot of traders You know typically do You know I enter or I look for pullbacks and I understand that the pros and cons of this because Ultimately if prices continue to go straight down then of course I would only really enter into one position whereas somebody would say okay Well, I would have you know entered into you know, then their main position or whatever it was on on the on the entry, right? There are pros and cons of everything in trading and I found that this has worked for me for Many many years and looking for a pullback and really again it ties into my buying for cheaper Ethos, right? So on this on this situation I've managed to you know prices managed to pull back to the 50% and a 95% and When it triggered that that's my risk reward, right? And now and then what I did was I took again profit off around about a two-to-one to kind of cover These two positions, right? So there was a zero point one percent Position here zero point one percent zero point one percent. So that's the zero point three percent in total and Then at two-to-one I managed to cover these two positions now because I would have made zero point two percent on this And then I can swing trade now these two positions. Yeah, that's what the plan is and so with the The Canadian dollar looking to cut rates and the Bank of Japan looking to hike rates We should eventually see it hasn't happened just yet. Of course. No one knows the exact timing of this But you know, if if I'm right about this overall trade idea over time then I will start to get those longer Trends and I can ride the trend to the downside and especially this week As the Bank of Canada may be a bit if they are a bit dovish, you know on the what's that the Wednesday? Yeah, Wednesday If they come out and they're and they're dovish then that just plays pretty much into my hands So, yeah, let's see and again that trade really is a break-even now and The euro yen again been in this for about the same time now. Let's pull back to my 50% Pending order and so now what I need this week is for prices to come down to maybe about a one-to-one to get Myself to break even and then I can swing trade this position right if it comes up and triggers me in to you know The higher position then I can look for you know Better risk reward and cover these two positions and then see where we are from now Remember, this is more of a longer-term place more of a swing trade and again If Europe are going to cut rates in June and the Bank of Japan are looking to hike There's a divergence there. So this is where the play where I'm looking to Swing trade this to the downside. So let's see what happens with that. So that's a bit of a trade update Now getting into the dollar and the dollar index and so I'm even back to the daily understanding really when we look at the The dollar index and this is a equally weighted dollar index I'll leave a link in the description box or at the top right-hand side of the screen where you can watch a video on how to Plot the equally weighted dollar index as well as other currency indexes on your chart And I really highly advise you you use these because it gives you really the bigger picture as to what the dollar is doing against other currencies That we trade in an equal measure, which I think is a bit more accurate than using for example the The dollar index the DXY or the USDX anyways So my bias is always been to kind of buy this year, you know I've kind of been maybe a bit cool in the dollar During this period, but it's really never been a sell and all that sell for me I have I did sell the dollar somewhere around here, but then once inflation came in Higher again, it was just really kind of buying the dollar. I'm taking advantage of some some short-term sentiment on that Overall the beginning of the year if you look at my past videos and the guys in the In the private mentoring group will know that you know pretty much been long on dollars for for quite a while and so I think that is likely to continue reason being is because You've had basically a blowout jobs data rise Chances of delayed fewer rate cuts fed rate cuts And so a strong jobs market gives fed time to gain clarity on inflation and Investors paired back bets for rate cuts in June or July now. Why is that right? Why is the data supporting later rate Cuts and it's really because when you have a growing economy, right? You typically don't want to central banks don't want to cut in that environment Right, so that the main goal really is to is to get inflation down to their 2% target Yeah, they want to get inflation down to their 2% target and So if they end up Cutting rates and inflation is not a 2% it's above 2% Then that could actually push inflation higher, right now when it comes to the job side of things normally when central banks cut rates GDP is normally in some sort of recession or heading at least heading into a recession now, of course with Unemployment data coming in lower jobs coming in higher that pretty much Signals that the economy is not really heading into a recession So why would the central bank need to really kind of cut rates, right? There's no need to support the economy By making borrowing costs lower because the economy actually is doing okay with interest rates At there, you know currently at that. I think it's 5.5 percent All right, so there's really no need to Kind of boost the economy by cutting rates and cheap and chipping loans and borrowing costs, right? If the economy is doing okay, so although inflation might be Slightly higher right in the 2% target and they are mandated to be fair to get it down to the 2% target They're gonna they're likely to leave Interest rates at 5.5 percent Hoping that inflation will gradually continue to go to their 2% target But it gives them a bit more leeway to hold Simply because the economy isn't you know going into that recession every period because typically when you have higher interest rates What should happen is it should contract the economy But obviously five point five percent isn't enough to contract the economy because you've got you know blow out non-farm numbers right non-farm payroll numbers and so You know it basically says here the biggest jobs gain in nearly a year boost the chances of the Federal Reserve officials will further delay cutting rates from a two decade high and Consider fewer reductions this year than anticipated and that is reflected in the CME Fed watch tool So if you keep an eye on this You know you can see that in June right we click on you got May here you've got June and The chances now of a no change basically a hold in rates in June is now 48% right pretty much nearly 50-50 if you look at what the probability was a month ago It was 25 the market was saying that it was a 25% chance of a hold and a 57% chance of a 25 basis point cut and a 16% chance of a 50% 0.5 percentage point cut right so At the end of the day the market has had to reprice the dollar higher because of cuts being You know priced out of the market and so You know looking at that on a price chart, you know, you would expect prices to you know Rise but we do have in fact CPI data I think PPI data this week which is an inflation measure And I think if that comes in as expected or slightly higher I do think that the the the market is likely to continue to price out the Rate cuts or could price out rate cuts in July which should send the dollar higher. So, you know as as traders and Who observe fundamental analysis, right a lot of the The approach really is to buy the rumor right are you M oh you are right The rumor some people say it with just an R But we also need the data to support that Rumor right so it doesn't matter whether someone says oh well, you know the Federal Reserve are gonna cut in June. Yeah Fair enough the market might start to price that in but they will price it out if the data doesn't support the rumor Yeah, so although it's you know great to have these forecasts from banks and And and economists and financial analysts. Yeah, if the data is not supporting the official data is not supporting the rumor Then actually that presents a really good opportunity to get involved and buy something for cheap or At least you know trade against other people's biases who You know who've been talking about the the US should go into a recession I'm not saying that US anchor is not going to going into a recession anything can happen There are risks and anything can happen at any time right war could some sort of catastrophe Etc financial crisis it could happen, but at the moment, right? The dollar for me is continuing to be a buy based on the data So any pullbacks to demand zones on the dollar index? Nice confluence for buy trades and as long as the data still continues to support buying the dollar And this is now the new narrative really which is fewer fed rate cuts So yeah, that's really where we are dollar yen, right? So what's that do for the dollar yen the dollar yen? the yen's I guess strength to a certain degree is based on really not only their rate hikes, but the the dollar and the Fed cutting rates and so Although I'm a buyer of the the yen. It's not against the US dollar It'd be more against the euro and the cad is you know, you've seen because those currencies are looking to cut rates First whereas again the more the market prices out rate cuts for the for the Federal Reserve based on the data You may actually see prices continuing to drift higher Right, you may see prices continues to fire and there have been calls for like one five five But also as well, there are You know, there is the the Bank of Japan could intervene and to to to prevent its currency Devaluing and this week we had radar says chance of hitting Bank of Japan price target or yes price target It's basically inflation to rise from the summer. So this ended up being actually quite bullish for the bank for the Japanese yen as Wado has been actually pretty pretty dovish over the past year But now he's saying that, you know, they could start to reach their inflation target of you know above 2% which would then mean continual more rate hikes and so we saw a bit of a a rise in the Yen and also as well we saw Japan's two-year yield climb after Bank of Japan hike now I asked a question on YouTube in the community section as to the relationship between interest rates and and Bond yields and the question was when central banks raise interest rates It often leads to an increase in bond yields true or false now If we look at this article when we seen that Japan's two-year yield climbs off the Bank of Japan rate hike You would have to say, you know, it's true, right? It's true. It's not false. I think 91% of people You participated, you know, got it right. So well done to you guys and really the answer is That higher bond yields make existing bonds less attractive leading to a decrease in bond prices This can result in capital losses for bond holders. So You know, just simply put and if you understand the relationship between bond prices and bond yields when bond prices Bond prices and bond yields basically go They're inverse so in when bond prices go higher yields go lower and when yields go higher bond prices go lower and this isn't going to be a bond You know Session or explanation, but just if you understand that and understand that rule Then and understand also as well that investors are really looking for yields and so if Let's say for example Bank raises interest rates. Yeah then Why would somebody Who may be holding a yield and getting maybe 1% right on a bond yield basically to hold government debt? Yeah, why would they? Continue to want to buy a Treasury yield and hold government debt for for 1% and Let's say for example the Bank of Japan are raising rates. Yeah, and then they eventually hit maybe I don't know 2% Yeah, you'd rather just hold the currency over The bond yield, right? There's no point in holding government debt, right? You wouldn't really want to buy it's that way and then you know prices for bought for bond Yields goes down right because the yield isn't great and then the prices go down because you'd rather just hold the actual currency and get a you know an interest rate from the Bank 2% and so In order to compensate, you know bond Holders and bond buyers who want to yield. Yeah, because it's really all you know rich people all you know very rich all want You know, it's all about yield and really just holding You know and getting passive income, right? So in order when for that to happen in terms of you know To attract traders into buying bond yields, right rather than looking for yields elsewhere Bond yields have to go higher right to attract bond Bond buyers, right? So that is really, you know The the kind of the simple way to kind of look at this, right? So, you know capital losses, right for bond holders They don't want that and so in order to entice bond holders and buy government debt basically is what a bond is You know, you have to offer higher yields when interest rates rise So that is what it is and that's what's happened right here So Japan's two-year yield climbs off the Bank of Japan rate hike So so yeah, that's really what it is. So for me looking at the The Bank of Japan I'm still a buyer On the on the yen just not necessarily against the dollar at the moment I don't think the dollar is the best currency to trade it against as I think it's one of the Stronger currencies. I think the one of the weaker currencies would be the CAD and the euro as well as the Swiss Frank as well and so yeah, if you are looking to buy the The dollar yen Then Then I think at the moment Your buying opportunities are a bit slim when it comes to looking at where demand is strong Demand is you'd really have to wait for your prices to break through this supply zone Then pull back to a demand zone there if you're looking at buying the the yen Against the this currency you really have to hope that this week inflation for the Dollar comes in way lower than expected and I think that will Cause the other dollar to to fall in value, but either way. I'm not looking to trade this I'm just looking to to watch it for now But those are really your options CAD dollar CAD again Based off of what's happened this week. You would really think that the The dollars should be more of a buy over the Canadian dollar I think a pullback into this area here should be decent in terms of In terms of buying at value The 1 3 4 round number if you can get that if you are looking at shorting the the dollar and The and buying the Canadian dollar short in this pair Then you're looking really at some supply zones right there and you've got one right there But I think Currently from what I see I think right now the US dollar has an edge So I'm looking for more of a pullback into a demand zone before looking at going long If you're looking at trading that that being with the path of least resistance at the moment the pound dollar pound dollar is Again a bit of a tricky one to to to trade at the moment and it's really just based off of the fact that both currencies potentially looking to Cut rates obviously in June or a bit later now There was some news out about the the UK and it says that the UK company scaled back outlook for pay by is to less than 5% and UK companies expect expect a wage growth of less than 5% for the first time in almost two years a Long-awaited easing that will alleviate concerns at the Bank of England that soaring pay may keep feeding inflationary pressures So the Bank of England and a lot of other central banks are actually watching Wage inflation as it is a it's a major Contributed to inflation and so if wage inflation comes down wage Wage growth comes down then that should help overall inflation fall and if it does fall again You pretty much will have The Bank of England look to probably cut rates a lot sooner and so You know pretty much it's really kind of a 50-50 thing in terms of There's not really no clear divergences at the moment But if you are looking to take this if you are looking to get you know Go short you could look for moves up into this supply zone Right, if you're looking for demand and buying the pound against the dollar look for a move really back down into a fresher area of Demand and for anyone who really wants to join the The mentoring group today is the last day so Sunday the 7th of April will be the last day to join For a while. I may reopen again in July. Maybe August Again, I'd just like to keep the you know the intake on the smaller side and more limited And so Yeah, if you really want to get The really the information And not more information than what I should provide on here and really get mentored in the fundamentals as well as the technicals Today is really going to be the last day for a while for a good few months. So you know, go to trading 180.com and Sign up if you can if you can't no worries. Just keep watching the free content I have plenty of free content that should keep you on the right path With your trading and so, yeah, if you are gonna join I look forward to working with you. So moving on to The the pound yen and again, my opinion is that the pound yen overall should be really a sell Based on again, just pretty much everyone else cutting rates and the Bank of Japan looking to hike rates. So Yeah, if you are looking to buy the The dollar yen just be mindful that once in you know information comes out that they are looking to cut in June or Later on this year prices really should start to roll over But in the short term, of course, nobody knows, right? No one knows which level is going to be the one that is going to, you know, prices are going to reverse, right? So we just manage our risk accordingly and if it works out go for good reward If it doesn't just take another trade if the fundamentals say to take those trades, right? So so yeah, that's really where we are my bias would be more to the downside If you are looking for buy trades, then you're looking for a pullback into that zone there or lower zone Right there Euro dollar. So again, my bias would be more on the short side simply because we do have Really more data supporting the potential for a rate A rate Hold for the dollar, right? The data is supporting that also as well It seems that the market is a lot more sure that the ECB will cut rates once a quarter Starting in June. Whereas again, we've just had the information and the data showing that, you know, fewer rate cuts for the Fed and the fact that, you know It could be priced out from June to July, right? And so, you know, going to the ECB it's It's it's it looks like more of a sure thing. So there's a bit more of a divergence appearing there so my thing would be Where am I build over the place? Sorry one second. Yeah, my directional bias would be More to do with a short trade So if we do come up a bit more and then we, you know, we do get the PPI data and CPI data this week supporting, you know inflation is a bit more sticky and a bit more stubborn Then I do think that in fact we should want to head to more to the downside. It could happen like that Could happen like that. Who knows, right? No one knows But ultimately, I think the path of resistance is still to the downside now They've obviously the risk to the trade would be if inflation comes out Right inflation measures come out and it's it goes the other way, right? So we've got inflation rate year-on-year core inflation Expected to kind of come in a bit lower Year-on-year here actually that year one year. Oh, sorry inflation year-on-year 3.4 Core inflation 3.7 core inflation month-on-month slightly down slightly down So again, it's still probably a bit more sticky then then then then the 2% but ultimately I do think that the The dollar is in a better place economically as well as Fundamentally then the then Europe. So I do think that any pullback should be short Should be short plays unless again, there's a really kind of a shocking data that comes out You know causing the market to kind of price in rates cuts sooner in June, right? So that's really where we are Euro dollar Euro yen again, I think this is more of a short play of course and You know, we are in a bit of supply here So any pullbacks you can look for short trades if you think that the euro is going to be the weaker of the two and if the If the European Central Bank are Davish this week in terms of their communication on what they want to do with interest rates then Pretty much You know, you really should look for kind of short plays on this But again, not financial advice euro pounds euro pound. I think the euro And the pound it's a bit of a difficult one again Not necessarily the most clear it's like although I'll probably give the pound the edge Give it the edge in terms of In terms of rates because it's not necessarily known 100% that they will cut in June Although market is trying to price that in I do think that if anything Any pullbacks if I was to take this trade I would rather look for in fact You couldn't even look for this to be a supply zone, of course right there So I think probably now or just a bit higher decent shorts would be the play but I'm Not really a pair that I'm looking to take I'm looking to trade at all and there would be demand right there So, yeah, those are really your options if you are again taking any kind of supply and demand trades You want to have the confluence with at least some level of support and resistance within that level as well as Levels that are really at the absolute lows or absolute highs, right? That's what that's what you're looking for Some of the things you're looking for anyway Ozzy dollar so Ozzy dollar I would be more of a buy on Ozzy dollar if The Fed are looking to cut rates sooner if they once they start cutting rates Right once the Fed start cutting rates the inflation starts coming down. I think the Australian dollar is going to be a really nice buy so Yeah, I think any pullbacks into demand zones are really where it's at It's a bit of a tip You probably want to start to look to buy the the Ozzy Swiss as well as these Swiss Frank are looking to to cut rates continually their inflation came out Way lower than than forecast as well So it puts pressure on the Swiss National Bank to continue to cut rates and the the Australian dollar and the RBN Z So an RBN Z RBA will be Cutting rates lost it looks like so ultimately I think You know the the Australian dollar is a buy at the moment not against the Australia and the US dollar but against other currencies You might want to look for some buy trades and finally gold so gold just continually making these these higher highs For anyone who's invested in gold Brilliant. I'm actually a long-term buyer of gold Regardless of what happens in the short term, you know with the dollar So this is looking nice for me, but in terms of trading gold Again, you've got nothing really these are all-time highs, right? So It's difficult to look for any kind of short. You really want the market to now determine Whether you know price is expensive here by prices coming down and then looking for some sort of trade to the short side But if you're looking for long trades, then of course, you know, it's just really kind of pullbacks now against the the US dollar again, you really want the US dollar to start to To devalue for gold to you go even higher. I think the longer the The dollar remains slightly strong could potentially cap Gold anyway, but let's see what happens But overall from a guess a more of a macro perspective as we head into the election cycle the you know There's there's pressure on the Fed I guess to to cut rates or there should have been and so let's see what happens there, but also as well from a China Perspective the People's Bank of China buys gold for 17th month as prices hit records So China's gold reserves rose to 72.7 for million troy ounces data and gold hits records on Rate cut expectations central bank buying and so, you know, we are heading into potentially we should be heading into at least the rate cutting cycle and That is you know, whether it's delayed to you know from June to July ultimately You know the the central banks Are looking to cut and I think the market is just really getting ahead of that and it's got ahead of that since February since early February. So Yeah, let's see what happens with with gold But it looks like obviously the poverty's resistance is you know to the upside and so it's really about buying on Pullbacks if you want to be a buyer on a pullback. So that's where we are with the analysis for the week once again You know if you want access to The mentoring group this called group as well as you know, the fundamental analysis spreadsheet Which we use as well as you know hours and hours of hours of content thousands of videos of content fundamental analysis Technical analysis a lot deeper than what I show you on YouTube then You know today's gonna be the last day for at least another, you know, two to three months. So don't forget to You know, if you want to join up then you can if not again, as I said, I've got plenty of content on my YouTube channel That you can absorb. So hope you have a great trading week. Take care all the best