 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com and welcome to this week's supply and demand forex and gold fundamental and technical analysis. If you're new, a warm welcome to you and if you're returning an equally warm welcome to you and if you find the analysis I do every week of use and thank you to all of those who comment on my videos positive and criticism and questions and I try to get back to everybody but just been really busy with the private mentoring group. Thank you very much for those comments and don't forget to like, subscribe and share with your fellow trading colleagues. So getting into our trade process, which we apply fundamental analysis to establish trade direction and then apply technical analysis, supply and demand strategies to time trade entries, establish profit targets and risk management. That is the Trading180 approach. So let's get into this week's news before we get into the charts and the week ahead. All eyes turned to the US jobs report and we zoom in quickly and due Friday, which will likely point to an acceleration in the labor market recovery while the earnings season continues with Berkshire Hathaway, General Motors, blah, blah, blah. Don't need to necessarily know about that. It's just about the current seas we're looking at. So definitely looking at the jobs report because the failure looking at the jobs report and jobs are a, I guess, a leading indicator as to the economic health of a country. So you have high employment, low unemployment. That means a growing economy and if you have high unemployment and low employment, it means that you're going the other way. You're going into potential recession. You're contracting. So worldwide PMI surveys will be in the spotlight as well as monetary policy action by central banks in the UK, Australia and India. So UK and Australia are the two that we really want to focus on. Other releases include trade figures for the US, Canada and China, Japan's consumer morale and that's pretty much it. So yeah, we've got a decent week. Don't know whether there's going to be any fireworks. I think a lot of the news is kind of priced in. There shouldn't be necessarily any surprises, but let's see. You never really know with the markets how they are going to react. So let's get into the technicals and some deeper fundamentals and let's start off on the dollar index. And the dollar index is basically just a measure of dollar strength against a basket of currencies like the euro, the pound, the yen and I think the Australian dollar. And what we've seen technically this week is really a bit of a sell-off. So the dollar was strong, prices did come down. So come up to this overall supply zone last couple of weeks and then we've pretty much just sold off from there. We haven't had the greatest of news for the dollar. In fact, we did get some US economy and it says US economy back on top, second quarter growth was 6.5% while disappointing. So it was definitely disappointing because I think they were expecting I think about 8.5% or something like that. So it came out two percentage points lower, but it means that the US economy has now recovered all of the lost pandemic output and marks another key milestone in the recovery. So there's a positive spin I guess, a positive narrative on some disappointing data. So the next target given all the stimulus lashing around is to end the year with an economy larger in size than would have been the case had the pandemic not struck. So there's the positive spin right there. There are things that are holding back the economy, but what the ING is basically talking about is they have a certain forecast. And although the most recent GDP data came out as beyond where they expected the GDP to be, the market is always forward thinking. So the path still projected to actually be higher and in fact higher than had the COVID not had happened last year. So that's astonishing if it does do that. But yeah, so this week there was a bit of a mixed reaction. There was a bit of a sell-off, but prices have kind of bounced from here. I'm a bit neutral on the dollar to be fair. I think the Fed being still being a bit, I wouldn't say hawkish, but less hawkish and talking about tapering is obviously positive for the dollar, but the data has to support the narrative. So you have to have jobs. Jobs is a must. Employment is going to be what the Fed are looking at. And if you don't have jobs and employment, then the Fed pretty much are not going to hike rates, or it's less likely that they will, even in the face of rising inflation. So because they don't know whether rate hikes or the economy can support rate hikes. So at the moment, as long as the data supports the narrative, as far as higher employment, lower unemployment, you should see prices potentially be supported in and around this area. And as we're looking at the dollar index, if you see the dollar index start to gather some pace, then what you want to do is look for buy opportunities on the dollar against other dollar pairs, for example, like the Yen, the Swiss or the Canadian dollar, for example. So we just use the dollar index as confidence really. So if you do want to sell and do want to get short, then your nearest supply zone really is going to be at this 92 area before looking at getting short ending around here. But again, you definitely need like some sort of catalyst. So we could be entering into a bit of a range at the moment, and then look for potential higher highs again, if the Fed are continuing to potentially, or the rumor is that they're hiking rates and hiking rates generally has an appreciative effect on currencies. So moving on to the dollar Yen and the dollar Yen, a bit mixed this week. Again, there was some risk of sentiment coming into the market, some news around China. So yeah, we've had a bit of a set off, but I think overall we did get actually a bounce where I kind of said last week there would be so you had prices, you know, bounce up, but then that level didn't hold within that larger demand zone. And then we've had prices kind of come back. But I think again, the path of these resistance, if you're looking at long dollar is to the upside. So it is literally just looking for prices to potentially come back down. Me prefer the lower area of that zone or even a zone just below here before getting long. I will tidy this up though, to probably where we are now. I think that level is probably gone. So any kind of pull backs into this 109 round number just just before that would be a decent buy, even though this level has been touched several times to be fair. So if it has been touched, it is obvious and obvious level tends to want to be manipulated, stop hunted, etc. So in fact, for those of you in a private group watching this, you may see a manipulation below that level. And if prices come back inside, then you want to potentially get long if you are looking at buying the dollar against the yen. Of course, in a risk off environment, yeah, if risk comes starts to really kind of come off, then the Japanese yen does strengthen. So then all bets are pretty much off for me, probably the best level would be somewhere around this 108108 round number to 10750. That's a nice fresh area of demand. This level has also been touched a couple of times. The more touched times the level is touched is the more common it becomes and it doesn't become a bargain for the financial institutions. So because they bought here and they bought here and now all the retail traders looking to buy and when retail are buying, the financial institutions are not trying to buy with us common folk, right as technical traders. So they manipulate areas, obvious levels. And so that that's probably likely to break depending on obviously this sentiment and whether they consider this to be a bargain. But if you want to get short, then you know, you're pretty looking at this level right here. There is a bit of supply right there just above their supply at lower highs and lower lows. Yeah, I ran this area so low. So you got a low high and then you got a low right and lower highs and lower lows are where the best supply zones potentially are moving on to the dollar Swiss and dollars Swiss. We did have a bit of a demand zone here but price I think it was on the it was the what was it again it was on Wednesday. So that was FOMC. You know, pretty much news put a stop to that demand zone. There wasn't any really demand for the dollar. I do like this zone further down this 90 cent area just below that. So that fresh area of demand right there is really nice. I think you also have a nice area of support and resistance and support and resistance there. So you've got a lot of eyeballs on that level with a fresh area of demand. So prices do come down a bit more. The dollar starts to weaken comes down there. I think that's a decent area to look for some long dollar trades. If you are long dollar, if you are short dollar, then the nearest supply zone is going to be all the way up here at this 91 90 level. So again, Swiss franc benefit benefiting from a potential risk off environment. So risk off and Swiss franc strengthens which is basically what you're seeing here and the dollar didn't have the greatest of news with regards to the GDP but I do think in the long term you should see some dollar strength again depending on whether the data supports the narrative. Dollar CAD, dollar CAD, prices coming down. I think the CAD, there's been a lot of forecasts talking about end of third quarter prices should be somewhere down at the 120. So there's still a good 3 400 pips potentially to the downside. The CAD are the Bank of Canada are one of the and the Canadian economy are doing really well when it comes to, well say really well, but they're doing better than most when it comes to monetary policy. So what you have now is they're ahead of the US economy put it that way. So if you get a pull back to any of these levels that will be decent shorting opportunities. I do like the level just above that one there. So that would be where I'm looking at as far as any kind of short trades. There is another mini level just below there and anywhere within here nice fresh area of supply. So let's see what happens with the with the dollar CAD again to pretty even to potentially strong currencies. Actually I would probably say the dollar is probably something like this whereas the CAD is more appreciating potentially it depends again on the risk environment as the dollar can act as a risk off currency and appreciates in a risk off environment. So if we are on a risk off environment or you see some risk off sentiment coming to play in the dollar will actually tend to strengthen over the Canadian dollar. So you could see some more upside potential but risk sentiment just drives prices to where you want to be potential a potential buyer. In this case I would probably prefer the Canadian dollar over the US dollar. So let's see what happens with that. New Zealand dollar US dollar currency pair and the New Zealand dollar has surprisingly been selling off and again just from the perspective of more risk off environment I guess the US dollar does tend to do well but again there are bank forecasts that's forecasting 72 third quarter and I think it's like 74 in the by the fourth quarter. So we've got lots of upside potential depending on what happens. The New Zealand dollar the RBNZ the Reserve Bank of New Zealand are actually expected to hike rates first amongst the major currencies that we trade so if anything this looks like an absolute bargain at these prices and if they do manage to hike first then potential upside that's really the path for these resistance. They're ahead of the the United States dollar in terms of monetary policy and economic growth. So yeah their central bank is pretty much signalling that the New Zealand dollar should want to hike rates if not next month August then I say next month by the time you're watching this I'm going to call this on the 31st but if you watch this if you're watching this on the 1st of August then yeah they're looking to the RBNZ are looking to hike on the in August. So again that should be appreciative of the New Zealand dollar right and yeah we should see some upside potential I'm not saying it's going to go straight up from here it could go to the downside depends also I think there is some news around jobs and employment so as long as that stays good for the New Zealand dollar then the likelihood the data is supporting the narrative of a rate hike and you should see prices move to the upside although that should be the path at least resistance anyways moving on to the pound dollar the pound dollar and the pound has been quite a surprising and actually matter of fact not necessarily surprising per se but it's been a bit of a dark horse when it comes to the buying pressure that comes as coming in and demand I guess as coming in for the dollar and it's really because they're handling the Covid crisis I guess better than most not necessarily the best but there was some recent data that was talking about how even though cases are rising the death toll is not so people are not really dying from Covid as much as they were last year even though the cases are spiking or were spiking so there's a positive element to the to the to the data which in turn is basically causing the pound to really kind of strengthen right so we've got we've got demand there got some demand assuming a bit got some demand there and my pencil there we go all right so demand cut through that supply zone so again I always say this is that there's if there's no technical analysis level that's going to stand in the way of value yeah and if the markets fundamentally believe that you know there's no value here at a technical level then they won't be right the market has to believe that there is and we just use technical analysis to see what the markets was doing in the past and if there's possible value there but also as well we have to know which currency to buy and you can never know which currency to really kind of buy or the probabilities unless you understand fundamental and resentment analysis because that'll tell you where money typically is flowing so I think at the moment if you're looking for a pullback and are waiting to buy the pound you're looking at other big pullback down into here or a higher high and then the pullback into a demand zone that's pretty much your your buys if you are looking to buy the dollar now is pretty much or that supply zone was um was your chance if you get a pullback into that supply zone and then a bit of a sell-off then that's pretty much where you are there is the Bank of England meeting on the Thursday so in the recent rising COVID uncertainty means we're unlikely to see a hawkish turn from the Bank of England on Thursday we expect policymakers to avoid offering any new hints on when the first rate hike may come but we also doubt we'll get at the early end of QE that some Bank of England hawks have recently proposed so end of QE or at least tapering is generally positive for a currency and tends to appreciate the currency but again in short in the article we're talking about they don't expect a hawkish shift in August anyway it might in September or October but it depends on obviously what happens with regards to the spread of COVID so expect some fairly upbeat forecasts so upbeat forecasts meaning that growth and jobs we don't expect any further hints about future rate hikes or no early end to QE but how about some hints on balance sheet reduction and rates are highly skeptical so a bit neutral but again the the Bank of England are ahead further ahead than most when it comes to tapering and potential hiking rates or monetary policy so let's see what happens with that currency pair for me not really not really the best pair to look for for trades trades and I'd rather look for the pound against something like the Swiss franc or the Japanese yen moving on to the euro dollar and the euro dollar again the euro did have some positive news at the end of the week it was first of all eurozone inflation rises to 2.2 so that puts a little bit of pressure on the ECB to potentially now look to want to hike rates or at least start the ball rolling on and and more hawkish language because they are very dovish at the moment when it comes to hiking rates and also as well there was the eurozone rebounds from recession more strongly than expected so that's definitely positive so the data is potentially supporting a narrative now it's about the ECB the european central bank now potentially signalling to the market that they may want to start to hike rates and I think that if they do if they do then I think again the path of resistance is to the upside I think the the the euro has a lot of upside potential especially over the dollar so let's see what happens in in the near future it wouldn't be risky to be fair at the moment as again you know I guess we're we're always taking risks in the market but right now it's about a timing issue and I think although the euro against the dollar if you're buying the euro I don't think the dollar might will be necessarily the best currency to trade against the euro but I do think the euro potentially now could start signalling a buy so looking for weaker currencies like for example the yen or the swiss franc against the the euro but again as long as risk remains on yeah and the data must support the narrative there must be positive data employment growth um covid vaccine rollout um deaths you know the spread of the vaccine um um coming um under you know being contained and then you should probably expect to see a stronger euro but if you do want to get short at the moment as well nice song for you to get short in um and I think that is decent matter of fact a really nice fresh well fresh has been touched once so not necessarily the freshest area of supply but it's kind of broken through and kind of come back so I think that actually might be decent for a short trade as long as again I think the um the uh the US uh the US dollar jobs comes out on friday I think non-farm payables comes out on friday and that is positive for the dollar so potential more downside but I think downside would be limited to maybe the 117 area is is the is the forecast I think for the third quarter euro yen so the euro yen um again the euro actually was quite resilient against the yen um in a risk-off environment we had a bit of risk-off this week and um yeah so I think that we could see some potential upside again knowing that the data for the euro is potentially positive and if risk risk is more on than off yeah then this should want to continue drifting higher um I think any pullbacks into any demand zones and I'm gonna draw this demand zone probably from around I'll draw it here it's not necessarily the best way to draw demand but I'll keep it there anyway um I do think that this area this just below this one two nine one two eight eight seven area is quite nice for a potential buy um or in fact I think anything below here yeah I think that level there is decent as well so yeah I think any of this area here would be nice for a potential um a potential buy trade for the euro if it does come back here um if you do want to get short on the euro yen again you'd have to really see the uh the the risk off come into play um or the the I guess uh some sort of bad news for you for Europe then there is a potential short at this uh supply zone moving on to the Aussie dollar and the Aussie dollar we've got some Australian news this week uh the RBA um is really um uh might well is likely to postpone uh looking at um tapering and and potential rate hikes and this is due to the um the lockdowns of a couple of major cities in Australia also as well they have a really poor uptake in the vaccine I think we read I think I read somewhere it was something like 17 or 18 percent of the population had been vaccinated and so um it doesn't help with GDP and there's also fears that they could they could go into um uh a negative growth because of the the lockdown so let's see what happens so the so basically long long and short of it is that the reserve bank of Australia are um are potentially um uh less hawkish or more dovish and so what that means potentially is more downside right so more more downside um when it comes to the um the uh the the Australian dollar so not great also depends on commodity prices iron ore and copper as well even though that might be supportive but um I think one actually policy wise the US is actually ahead of the the Australian dollar but if you do want to be a buyer of the Australian dollar you're looking for probably pullbacks to demand you have a bit of a demand zone right here um and then so anywhere in and around the 73 round number if you want to be a buyer of the dollar then you're looking for a pullback into that supply zone or for prices to make lower lows and then you're looking for a pullback into that zone there because this is where your supply zone would be around there like that um moving on to the Aussie yen and again you're seeing the Aussie start to again set off against the yen the yen isn't doing great at all and even though um I think the Japanese yen is also um struggling with covid it seems like money still just flows into the safe haven asset anyway the Japanese yen so um um yeah it's pretty much just looking for potential um sell trades if you are interested in trading risk off so you've got supply there and you've also got yeah technically you've got supply right there as well so again I think the top level would be the one that I'd be looking for because that's the level that if you look at where there'll be other traders looking at not just supply and demand traders but you've got support daily support and resistance there as well so there's a lot of liquidity you know resting around this area here so that'd be potentially where you want to get short if you're looking for long trades again probably around this 80 cent round number it bounced off of here already so that's decent for your potential buy trade if risk sentiment turns around and finally looking at gold and gold um there should have been a supply zone right here I don't know why it's not there um so yeah you've got supply and prices literally came up to here this supply zone and it's sold off now gold saw an article just before I started recording this video and central banks go big on gold buying in quest for security so just um this is just a single paragraph so central bank is appetite for gold it's growing providing a bright spot for the traditional haven as investors investor interest ebb's global reserves expand 39 percent higher than uh higher than the than the five-year average for the period according to quarterly summary um and if central banks continue this is a key right so if central banks continue to buy at the level seen recently it will provide a supportive element for the market according to louis street senior market and is um at the council and the central banks aren't are some of the smartest people in the room so when you see that they're buying gold they're thinking you know uh uh three six nine 12 months uh two you know two years ahead right so what would make gold really want to continue going higher right well there's two things higher inflation right because inflation is is really devaluation of a currency devalue yeah of a currency and uh gold is a hedge against against inflation against devaluation and um also as well if the dollar you know doesn't doesn't do well so if gdp you know there's um there's um uh higher unemployment and lower employment right so if non-farm payrolls fails to deliver and employment is still low for example that is definitely a catalyst for buying the dollar right that's because the federal reserve will have to we can't really uh look to appreciate the currency because again as mentioned before you need to have a growing economy economy needs to be able to support rate hike she can't raise rates borrowing costs loans um on businesses when they are still struggling so um and you know uh homeowners as well right you don't want to raise rates on homeowners because otherwise if they ought to pay more back on their mortgage loans then um then it hurts obviously the pockets of homeowners and then um homeowners you know won't spend in the economy they're looking to save and then you know it's a it's basically a spiral right so you have to have a growing economy in order to facilitate um uh rate hikes so if you start to see that combination of um employment um go lower and inflation go higher and gold is going to be the buy anyways guys um i hope that helps and if you find my again uh analysis useful please don't forget to like subscribe and share the thumbs up it really helps get the uh the the video out there and its quality content anyways guys take care and uh hope you have a great trading week