 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com and welcome to this week's Applied and Demand Forest and Gold Fundamental and Technical Analysis for the week ahead starting the 18th of March. I hope you had a great trading week last week and don't forget to like, subscribe and share this video and my videos on my YouTube channel if you find the content useful with your trading. So getting into the week ahead and this is from TradingEconomics.com. So the culmination of the week will be the Federal Reserve meeting, which includes the FOMC's economic forecast and the so-called dot plot interest rate projections. Also in the US indicators such as manufacturing and services PMIs will be under review. Internationally, attention will be directed towards interest rate decisions from Japan, the United Kingdom, Australia and Switzerland. So a lot going on this week, which again I'll get into during the video. Additionally, inflation data from Canada, the UK and Japan will be in the spotlight markets. We'll also analyze flash, manufacturing and services PMIs from Australia, Japan, the Euro area and the United Kingdom. And China updates on industrial production, retail sales and unemployment rate will be crucial. So lots going on this week for sure. So let's see if we can get some movement. So before we get into the analysis, the fundamental technical analysis, just a bit of a trade update and some trade analysis I should say on the pound dollar. So this was a trade that I entered this week along with the pound CAD, but both were pretty much similar, if not the same stop hunts set up. And I don't really talk about stop hunts on this, on this channel too much is more about supply and demand. But stop hunts have their place with supply and demand. But that's beyond the scope of this video. But for those of you who just want to know what trades I've entered, this was a trade setup that I had pointed out on the private members discord group. And this was on the 11th, which was on the, I think it was the Monday, yes, the Monday morning. So I said, Hi, everyone. I noticed that the pound CAD had is at highs and has met the conditions for a stop hunt with both the CAD and the pound indexes indicate inexpensive cheap levels. Although it's not on my fundamental analysis spreadsheet as a sell, I think there could be a short opportunity at this level, which is dependent upon the UK data this week. So I was looking really for I'm actually a buyer of the pound overall. But what I was looking for is that there was a potential short and it was based off of weak some weak pound data. So if that came in, there would have been a reason to sell in the short term. And that's what I was kind of looking for. If inflation measures like wages come in lower and labor shows contraction in the economy, I think the pound is likely to devalue from here as the market may start to price in rate cut sooner from the B O E, the Bank of England. So I posted this as well as the pound dollar set up. And I basically just said the same can also be applied to G U inflation for the dollar will need to come in sticky or higher than forecast, as well as the pound data indicate inflation is lower than forecast to go for a short. And so that was really the setup and one of the traders in the group also kind of highlighted the stockpunt here. And so he just said he was looking at this stop on the timeframe daily, which is basically the same kind of setup that I was looking for as well as a supply zone in there. And yeah, he had highlighted the level that we were looking at in terms of or he was looking at as well in terms of a stop on. And so so this week pretty much before the news came out before the data, the unemployment rates and the inflation data for the dollar came out the stop on basically triggered on a daily timeframe chart. And so the entry was pretty much at the close of the day. And and so yeah, that was pretty much what we saw. Now, as prices and the data came out, we actually got some decent news in terms of unemployment. So unemployment went a bit higher, which again, the next day, which basically pushed prices to the downside and also as well, we had CPI data come in, which was actually stubborn as well. So it was higher than forecast. And so it really kind of delayed, I guess, the the Fed in hiking or potentially was going to delay the Fed in sorry, cutting rates, not hiking rates in cutting rates. And so you saw a bit of a sell off and then a bit of a pullback. Now, the next day, we did have some GDP data come out for for the pound. And actually, I was expecting that hopeful, even though it's forecasted at point two percent, I was hoping that this would come out a bit lower or even much lower than the forecast. And I think had that had come out lower than forecast, I think we'd be a lot lower. So and but as it came out as expected, I wasn't too confident that this would kind of roll over as much as I kind of wanted it to. So what I did was I ended up taking a bit of a small profit off of this trade or somewhere around the one to seven eighties or something like that somewhere around here. So it was like a small profit on the on the pound dollar as well as the pound CAD. So the pound CAD was pretty much nearly a bit of quite a very small profit, nearly a break even trade, a very small profit and small profit on the pound dollar. So but we did have actually on the Thursday, PPI data came out double the forecast. So that's one of the reasons why, you know, prices did actually again continue to fall. But at the time, I thought it was the correct thing to come out of the trade because of the fact that the the pound might have been a bit stubborn against the dollar. And and yeah, but so a really small profit this will say last week. And and yeah, that was really the trade. Now, am I going to, you know, am I do I regret getting in or taking profit on this too early? My answer is no. And again, the reason being is because this wasn't actually really a trade that I had kind of wanted to get in. I was really only trying to get in short and trade it down to a certain level, maybe get a one to one one point two to one based on the pound weakening and pound data. But the pound data, the GDP month for month didn't really kind of support the narrative of the sell off. So I needed just a bit more evidence for prices to kind of really sell off, which it didn't. And so that's the reason why I came out of the trade had that GDP had come in lower than forecast and I would have stayed in and then likely held on and then we probably would have had the PPI come out and pretty would have been a lot lower where we are than we are right now. But but yeah, ultimately, you know, the next best trade after a winning trade is basically a break even trade, right? And I got a small win off that. So and the the pound cad. So it wasn't necessarily a bad week. It was just you know, the trade didn't necessarily work out as was in terms of fundamentals as I wanted it to. But I am actually still long on the pound. And that's my bias for now until obviously, this week, where we definitely got some some major news coming out, right, in terms of, you know, the Bank of England announcements, as well as I think there's something else or some other things going on, interest rate decision, as well as retail sales. And what else was that? We've got inflation rate, what was placing was this week as well. So we'll see what happens if inflation does come out, no matter of fact, and actually, this should want to fall away. So let's see what happens. But but yeah, that was basically the trade, the pound dollar and also as well an update on the New Zealand dollar from last week. I have been stopped out of the final position, which was a profitable trade on that final position. So yeah, that was decent. And then we've obviously had the US dollar strengthen. So yeah, that was that's basically what's happened on that one. So I'm flat. I'm out on that on that New Zealand dollar trade and you can watch the the entries and the breakdowns from last week and the week before on the Sunday videos. So getting into the the actual analysis and starting off on the dollar index. And the dollar index is an equally weighted dollar index for those who are new to the channel. And if you want to know why I used an equally weighted index and how to apply it to your trading view charts, I'll put the link in the description box below or up in the top right hand side of the screen. So you click on that and it'll take you to the video. So again, this week, dollar came down or end of last week, dollar came down. And this week, we've had again inflation numbers come out hotter than expected, right? And so core inflation tops forecast again, reinforcing fed caution. So the longer inflation takes to reach the central bank's 2% target is the longer they're going to hold in a hold really is supportive of a currency. Because if you're cutting rates, then that is the effect of cutting rates is actually to devalue the currency or depreciate the currency. And so when central banks, you know, can't achieve or not achieving their 2% target, then they have to hold rates in order and hope that rates do get inflation or higher rates get inflation down before cutting. So we had core inflation come out, which was supportive of a hold. And also as well US PPI producer prices index jump according to signs of persisting inflation, right? So measures of inflation are not reaching the central banks, the feds 2% target. And so you're starting to see if you go to the CME Fedwatch tool, and especially the expectation is for a June cut. If you go down and you'll see now it's actually no changes 41.2%. Now, if you look back on the the daily and the weekly and the monthly a month ago, around the 16th of February, there was a 24% chance of a hold, right? And then a week ago, it was 2626 percent. And now it's 41.2%, which is now appreciating the currency. And there's the market prices out. It's starting to price outrate cuts in June. And so that's why you're seeing the dollar, right? Start to appreciate. So it's all driven fundamentals. This is not, you know, some Elliot Wave nonsense or anything like that. It's fundamentals that are driving prices over the medium to long term, right? And so for me, I was, I did get short on this last week. But this week, as inflation has proved stubborn, I am waiting now for at least a decent pullback on the dollar to look for some long trades. That's really my bias on the dollar back to being long. Let's say I was I was just only short, I was saying that you can look for long reasons to buy and sell the dollar. I thought last week the data came out, didn't support it and that was correct. And this week into, you know, foreseeable future, as long as inflation remains stubborn and won't go down to their 2% target, then you should have a stronger dollar or more appreciative dollar as as the Fed are likely to remain on hold for a bit longer. So that's my my dollar analysis. And you'll see in that play out on the dollar yen. So the dollar yen, the yen actually is expected to cut rates. I'm sorry, it's a high crates this week. So the Bank of Japan to lift short term rates to 0.1% range on Tuesday says Kyoto. So the Bank of Japan is set to raise key rates for the first time in 17 years on Tuesday following its two day monetary policy meeting Kyoto reported. So with that, the expectation is for the yen to appreciate right and the appreciating would mean the dollar yen to go to the downside. Now, it wouldn't surprise me if in the short term, because there's been such a build up of shorts that we get some sort of, you know, a short squeeze where prices just squeeze everybody out massive liquidity hunt. And then prices go to the downside. That wouldn't surprise me. But ultimately, they are essential bank if they do hike, and they're their only central bank to really start hiking rates. And so with that being said, you know, the the path of least resistance should continue to be to the downside. But that also does depend upon whether the the Federal Reserve do start to cut rates sooner. And I think I still think the dollar yen is going to be a trade of 2024 in terms of downside potential. But the really the risk factor to that is stubborn inflation. If inflation goes, you know, moves to the downside to the 2% target, then I think we definitely see 140s 135s is what the banks are forecasting. So let's see what happens this week. Of course, there is a risk in fact that the Bank of Japan don't hike rates. And if they don't hike rates, then I would probably see, you know, you're likely to see prices actually go probably maybe above that 152s, who knows, but we're definitely going to get a revaluation of the end, because I think the market is heavily expecting the Bank of Japan to to to hike rates. And and if they don't, then I think again, the yen has to be revalued in the short term. But overall, if they don't hike hike in March, then the next time and the next meeting they've got in April, that should be really where or when the bank should want to hike rates. So although you might see a massive move to the upside on a surprise hold for the Bank of Japan, I do think that it might be a bit short lived, or it might last for maybe a week or so or two until the dust settles. And then all of a sudden, you know, the the euphoria of that price movement will probably fade as then the market starts to price in an April hike. So let's see what happens there. But if you are looking at shorts, then you're looking at anywhere around here or even a fresher area of supply there. Or if you're looking for buyers on the dollar, then you're looking for a price to come all the way back and then around there. Looking at the in fact, let me just move that up slightly as the demand zone starts there. Pound CAD prices did come down again to this area of demand. And I also put a level of support there as well, which it did bounce off of this week. And of course, stubborn inflation for the dollar being the narrative. So you see basically a bounce from there. So at the moment, if you are looking for a dollar by US dollar by a pullback into that zone or even lower would be quite nice. Or you're looking for if you're looking to buy the Canadian dollar based off of some decent news, then you're looking for maybe a stop hunt above that level, I would say that's quite a nice level to look for a stop hunt. If it happens, and you think that the Canadian dollar is a bargain against the US dollar, which I can't see at the moment, any evidence suggesting that that is the case. There are some supply zones and daily supply zones in and around this area here, here and here. So let's see what happens. But yeah, that's where we are with the dollar. CAD, I think poverty resistance should be more to the upside. Pound dollar, again, spoke about this from a stop hunt perspective. But from a fundamental perspective, again, Britain's red hot jobs market cools slightly with rise in unemployment. So wages cool as well. Vacancies drop and redundancies increase. So figures add to confidence that inflationary forces are cooling. So that was the data that kind of pushed the pound. Initially, you know, the next day to the downside. And again, what kind of held it up a bit was, in fact, the the economy UK economy returns to growth after volatile fourth quarter. So a rebound in retail activity helped the UK economy bounce back in January and the combination of falling gas prices and anticipation of rate cuts suggest we should see an improvement in growth through 2024. So there was some positive news for the pounds. Sorry about that. And so yeah, I think the pound against the dollar is likely to probably, you know, stay around this between the highs of the 129s and possibly the 126s that could probably be the new likely to be the new auction or the new range, right around here. As you've got two decent currencies and looking to obviously high crates later, but I think the pound should still have the edge overall as they are looking to cut rates later now. There is some speculation on UK inflation expectations. They fall to the lowest since the Bank of England hikes began. So a survey suggests the Bank of England is keeping price expectations anchored and findings come as conservative MPs urge end of Bank of England independence. So inflation is expected to fall this week. And if it does actually fall more than expected, so it says here inflation, yeah, forecast is actually for it to be to come in lower. So in fact, if that does happen, that could actually still see the pound set off. Now would I trade the pound dollar? No, I'm looking for something like maybe like the pound, something like the what I'd be looking for the pound, pound Aussie would be something that I'll be looking at this week. But the pounds should probably sell off across the board, but I think the pound Aussie should be decent for a for a trade anyways. Listen, I'm not going to look at that and technically, but in this video anyway, but I'll look at that overall with the with the members in the group. Anyways, but the powers yourself overall, so any pullbacks, if you are looking at sell trades on the pound, then you're looking for a pullback into a zone like that or even higher before looking at getting short. So if you are looking for long trades, though on this pound dollar, you have to wait for price to come back down into that demand zone and then look for some long trades there. Pound Yen, so again with the Yen looking like a potential rate hike, if they do hike then what should happen is a move to the downside. If they don't hike, you're likely to see prices maybe even break through that, but as I said before, I don't think it would be long lived, it should be short lived in terms of price moving higher. But let's see, if you are looking to buy the pound, then you're looking for pullbacks into that zone and looking for long trades there. If you're looking for buyers on the Yen, hopefully prices come up into that area there and then look for a short trade, but even if you know after the release of the news, if you're up on the announcement of the bank Japan, regardless of whether it's in a supply zone or not, you can look for probably short trades, but just be very, very wary of, because it is a high volatile event, personally I'd look for the dust to settle, right? So if they hike rates, right, to zero and you start to see prices continue to rise, not just on the pound Yen, but you see the Yen basically weakened, I think it's going to be a liquidity hunt, a bit of a short squeeze on anyone who is trying to go short, a lot of retail traders, even the guys watching this, you guys watching this are likely to just blindly press sell on the news and then your stop losses are fueling and what will happen is that you all get stopped out and then eventually what will happen is the big money will just buy at a cheaper price and then the next day, next week, next month, you'll start to see prices go to the downside, right? Remember they don't have to trade today, they can, you know, wait for a better price before prices go lower, so I would say just be a, well, my advice, you don't have to take it and it's not financial, of course you don't want to move your money, but ultimately if you do see prices go the other way on a rate hike, then, you know, just know that it's likely to be a stop hunt in some way, shape or form and I do think that it would eventually roll over, it's just taking out a lot of the stop losses before it does do that, so that's where we are with the pound yen, euro dollar, so euro dollar, nice trade here from last week and a bit of a reversal, I'm more bearish on the euro and so any pullbacks up into that area there will be quite nice for a short trade, there is actually still supply here as well, so you can use that as a level to look to short if you want, if you are looking to buy the euro, then you're looking at demand zones there, now last week the news was a bit light on, you know, the thinking of the ECB on interest rates, so ECB's rain season prerequisites for several rate cuts this year and yeah it's, there are some hawkish and dovish members and so just because one member comes out and says that he thinks that there should be rate cuts, some, you know, members might just turn around and say well I don't think you know they should be cutting this year, so the expectation really overall for the euro is to kind of cut in June, I don't think that's changed much, so if the Federal Reserve hold for longer than the euro then you're likely to see this happen, right, you like to see prices continue to fall all the way back down to 107s and even the 105s, right, so let's see what happens there, if you see inflation for the euro come down then that's going to definitely drop the euro and I say definitely I don't like to use absolutes but that should and it's likely to drop the euro, so let's see what happens with that, euro yen, again my bias is to go short on this, so overall you've got one central bank that is hiking rates or looking to hike rates, one that is cutting rates, so any pullbacks up into this zone here are going to be for me selling opportunities or even higher, just my bias is just to sell when I see an entry or set up, so any pullbacks up into here looking for a specific entry on a lower time frame and then I'm looking for short trades but as providing obviously the bank in Japan do hike rates, if they don't hike rates then I'm not going to stand in front of that, I'm just going to wait for the dust to settle and then I'll still look for short trades but it would be a lot higher up potentially again a bit of a stop on above that area if it does show its hand and so we do have some demand zones though if you do want to get long on this, there's a demand zone there and there's also a demand zone right here so there we are demand so you're looking for a pullback into any of the demand zones if you're looking for long trades on the euro euro pound I would expect the pound to continue to strengthen although this week we have we did get a bit of a pullback I was saying in last week's video that I did like this technical setup here very very nice and it actually worked out this was known as CPR zone on the euro it's just fundamentally I didn't like buying the euro against the pound although the pound was obviously a bit weak but I do think any moves to the upside further higher I think anything around there is going to be really nice for a sell for the British pound but let's see if we can get up there and also it does depend upon what happens this week so if inflation does come out lower than expected then in fact the euro might be actually a buy against the British pound at least in the short term as maybe expectations for the pound sorry cuts start to be pushed or pulled forward towards from you know something like August to maybe July and you might see in fact the the pound weakened but overall as long as the expectation for the pound to cut is later than the euro then any pullback should be seen as shorting opportunities and then you've got the Aussie dollar and the Aussie dollar again this week we did get a move higher nice and very nice stop hunt above the zone that level there so we see level it wasn't really a pair I was looking to trade but you can see where that stop hunt is very nice and then you had to move and the news kind of confirm that the dollar was indeed appreciating so this now creates a new supply zone right there and again if you are looking for short trades on the Aussie dollar then I think I move back up to the here is quite nice if you're looking for long trades and buying the Australian dollar against the US dollar then I think I move back down into that demand zone and even down into the 63 just beyond the 64s is quite nice for a buy I am long Australian dollars overall but just not against the US dollar and finally gold so gold again the strength of the US dollar capping the upside and if you see obviously this move there's a massive move to the upside that's pretty much you know the move has happened now so I think you know we should see prices start to pull back especially with the dollar strengthening so with that if you do see prices move to the downside then I move back up should be a decent short if you're looking for short trades if you are looking for long trades then you're actually looking for something where you see prices make a new high then a pull back into a demand zone and then looking for a long trade there so that's the kind of movement you would need to see so gold at the moment definitely very in a very expensive area for my liking I do you know want to be a buyer of gold but yeah I wouldn't be buying up at these expensive areas and so yeah that brings us to the end of the video for this week and yeah for those of you who are in the the private members group I have posted the private members fundamental and technical analysis video for the week so please watch that as that goes into way more depth than what I've done in this video in the youtube videos and and also as well if you are interested in joining trading 180 and getting access to my fundamental analysis spreadsheet the joining is going to be or the enrollment is going to open at the end of this month I haven't decided on a specific date just yet but it's going to be at the end of this month beginning of April so I will notify you guys via email if you've contacted me as to the specific date over the next day or two so if you do want to know a bit more about how the fundamental analysis spreadsheet works and the currency value cycle as well I have a video actually this was recorded a year ago and I kind of break down it's about 50 minutes long and I break down really the the trading 180 fundamental analysis spreadsheet with the currency value cycle explained and it's really important that you understand this and I don't think there's anybody who's broken down the currency value cycle you know on YouTube and really understands it in a way that we do to this high very high level so yeah you can watch that video to get a bit of a understanding on exactly how to trade fundamentals and understand how the currency value cycle works anyways guys hope you have a great trading week and until the next video all the best