 Hi, my name is Liam Roeb, 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 or warm welcome to you and if you're returning and equally warm welcome to you and I wish you all a happy new year. I hope you had a chill, safe Christmas holiday as well. So going into 2021, if last year was a great year, congratulations to you and hope long may it continue into this year. But if it wasn't as long as you're still in the game and you're managing your, you know, your risk, then make this year a good one. But getting on to the fundamentals and risk sentiment and this is a forecast analysis from JP Morgan. We were discussing this in our private members group yesterday and one of the themes was the US dollar. So will it continue to weaken? And the short answer from JP Morgan is it probably will, but modest, but modestly from current levels. Investors are likely to move money from the safe haven of the United States into higher return opportunities elsewhere as the global healing continues. Investors should be mindful of currency exposure and consider beneficiaries of a weakening dollar such as emerging markets. So there are reasons for a weakening dollar. I have really been saying this since September, in fact, August when the Jackson Hole Symposium, you can check out the video on my YouTube channel. So Forex Fundamental Analysis, this was it. So it's the one that was about four months ago. And we talk about this with the Federal Reserve Average Inflation Target F-A-I-T and why the dollar was going to more was likely to basically weaken and a lot of the guys in the group benefited from shorting the dollar as well as buying the euro. Again, these videos explain the fundamentals. And we talk about target, especially on this video here as well, which a lot of you have been commenting on and sending me messages on. So we were talking about the 125 area. But in the short term, you have to also look at the fact that there will probably be pullbacks on the US dollar, right? Because the theme and a lot of financial institutions are quite bearish on the dollar this year, which basically leaves, I guess, the market open for pullbacks. Pullbacks are going to happen anyway due to liquidity, etc. Everyone can't be bearish or one way without there being pullbacks because the market needs liquidity, right? So Saxo Bank think that bearish bets look a bit overextended. Doesn't mean it can't go down. And I'm not saying that prices go into reverse this week. But the financial institutions are heavily bearish, which basically opens up for a pullback. And none of us know how large that pullback will be, but just be mindful of pullbacks. But overall, pullbacks are good to supply zones where we can get bearish at. So looking at the economics behind the dollar, Fed's policymaking panel tilts even more dovish in 2021 rotation. So FOMC this week unlikely to even consider rate hike amid the pandemic rebound and new FOMC voters could influence debate over asset purchases. So if they're unlikely to hike rates anytime soon, it means that they're not looking to strengthen their currency, which is the US dollar. So changes in the Federal Reserve interest rate setting panel will make US central bank even less likely to tighten monetary policy in the new year, no matter how much of a jolt the economy gets from the rollout of the COVID-19 vaccine. So at the moment, we are in a currency war. And again, if you want to know what the currency war is fundamental analysis four months ago, only 537 views. Let's get this up. This is a very important video. So the currency worth you don't know what's going on is that a lot of all central banks looking to devalue their currency in a recession. So that explains why we're in a currency war, but the Federal Reserve are not looking to raise rates anytime soon. They're looking to keep the dollar week, which is actually advantageous. And as we alluded to before, the US passes, well say alluded to, but we were talking about the virus. And there is obviously a rollout. The US passes 20 million cases as new year begins. So there is obviously the concerns of the virus still, but the market is actually more forward thinking because of that, because there is a rollout, you know, Oxford Astra will supply two million vaccine doses in a week in the UK. So globally, the pharmaceuticals are, you know, getting to grips with the vaccine and the rollout, which should be positive going forward. So I think the market is really priced in any kind of, you know, bad news when it comes to the spread of the virus because there is, you know, the vaccines that are coming out, which should want to combat the spread of it or at least from an immunization perspective. And while we're in the UK, Brexit has been done, right, but Brexit is a new world, is a new world business is, so Brexit is a new world businesses still figure out, still need to figure out. Okay, I thought I read that wrong. But yeah, so Brexit has been done. We've divorced from Europe, but the details still need to be ironed out. Yeah. So generally, what does that mean for the British pound? It should be quite positive for the pound in general for positive sentiment for the pound, at least in the short term, but until obviously, details start to get exposed, I guess, and the winners and the losers and see who is the winner, who is the loser of, you know, the negotiation and the agreement. So yeah, there are key issues weighing on the city of London after the Brexit deal. So we, in the UK, that issue is still not over, probably be rumbling on, depending on obviously what the details come out about the actual deal and who will benefit. So moving into Europe and economics from the ECB officials closely monitoring strengthening euro, right? So the strengthening of the euro is a problem we've been saying this for months. Not if you're obviously trading the euro and you understand why the euro would appreciate against the dollar or the dollar would depreciate against the euro, for example, but understanding that the European Central Bank is closely monitoring the euro's strengthening against the US dollar governing council member Oli Rehn told Germany's Bozene Zeitung, sorry for betraying that, while the ECB doesn't target the exchange rate, that does not mean that the appreciation is not important. This is what forex and currency traders need to understand if you're just looking at from a technical perspective. You won't understand these things and there's an edge beyond just looking at technical analysis that we can take advantage of. So an appreciation leads to a loss of competitiveness, meaning the GDP, for example, in a business cycle and the effects that outlook for growth and inflation, which is what the central bank's mandate is to monitor, right? So we monitor exchange rate developments very closely and will continue to do so in the future. So the euro has strengthened around 15% against the dollar since March and is trading it near enough, $1.23. So it's important because of inflation and also competitiveness and expensive currency is not good for an economy, especially in a recession. But with all of that going on, you know, gold is one of the assets that we should be looking at and gold caps its best year in the decade with the dollar on the road. So again, dollar depreciation leads to higher gold prices because it takes more of that currency, for example, the dollar to buy gold, right? So gold is a hedge against inflation and, you know, going obviously looking into the future into 2021 gold miners set for another banner year with focus on discipline. So analysts outmining stocks with strong capital allocation, stimulus, low rates and weaker dollar to lift gold in 2021. So that again will be positive weaker dollar. If that narrative still continues, then it should benefit, you know, gold prices. Now moving on to this week's economic data. This week would probably be all about the FOMC, average hourly earnings, non farm, sorry. Yeah, so FOMC meeting and we've got non farm as well, employment change. So it's all really focused on the dollar. You also have Canadian employment change and unemployment rate. So the forecast really hasn't come out yet, but I'm sure it'll be probably priced into price this week. Everything else you've got governor Bailey speaks, which is usually important for forward guidance. But I think that's pretty much it for this for this week as far as any kind of market moving news. Now let's get on to the technical analysis and starting off as we always do on the US dollar index. And the US dollar index is just a measure of dollar strength against the basket of currencies. And it's worth keeping your eye on as you can see basically dollar strength or weakness overall and look to take advantage by using this confluence on other dollar crosses and dollar pairs like the dollar yen and dollar Swiss. So starting off on a brand new fresh chart for 2021 and we have an area of supply here. We also have an area of supply right there where that swing is. And I'll just draw maybe about two or three of the relevant ones. They want to clutter up the chart too much. And from a demand zone perspective, there is a bit of demand from way back in 2018. I really don't like using 2018 demand zones. You've got to be aware of them for sure. But from a trading perspective, I'm not necessarily too keen on zones that have been there for the past maybe two years. Because the main reason is whatever drove prices higher here in 2018 is not going to be the same fundamental reason that is going to drive prices higher here. It may be technically yes. But from a fundamental analysis reason, it's not the same. So it's best to wait for what I consider proof of value of price does decide to go higher from here. Yeah, then it's just a case of a pullback into that demand zone. Then looking for long trades if you want to get long on the US dollar. So that's the way that I would approach that. Also as well, I guess many of you are looking at this whole wide zone here and saying to yourself, well, you've got such a wide zone of supply, why would, where is price potentially going to turn? So that's where you kind of can break down supply zones using support and resistance. We know that lower highs and lower lows proven value areas. So what you then want to do is within this wider zone of supply is look for prices to come up to here. And again, looking at the dollar index, you're just looking for confluences. So if price starts to turn around here on the dollar index, and we're in a supply zone, let's say on the dollar yen, then you're looking for, then you're looking for short trades on the dollar yen or the dollar Swiss, for example, with the confluence of overall dollar weakness at a, not only a supply zone, but also a technical area of what is known as support and resistance, which support and resistance are supply and demand zones, past supply and demand zones that have been projected into the future. Again, I have videos on that on my YouTube channel. So coming to, you know, I think coming to the end of this analysis on the US dollar currency, I think that's pretty much it. Fundamentally, you understand where you should be, what direction you should be trading, and then look for those price to reach those areas, look for confluence, and then look for trading opportunities on the other dollar crosses. Moving on to the to the dollar yen, some more, some more chart space. Again, looking at some some supply zones first, we've got to change that to supply. Right, we've got a supply zone right there, not necessarily the strongest area of supply at the moment, because it hasn't made a new lower low. We've also got a little bit of supply there, cluster of supply, I would say around there, and then we've got something up here. So those are the areas that you want to look for. And then from a demand zone perspective, we do have some demand right here. So we are actually in a demand zone, right there. So again, just looking at certain areas. And again, necessarily just trading on the daily time frame, you can zoom down into lower time frames, break down the zone where it is, where do you want to look for trading potential trading opportunities using daily zones, and then using support and resistance within those zones to understand that you've got the higher time frame confluence. So for me, again, it's probably more short on the US dollar yen, but I'm not looking to even trade this pair to be fair. It's not necessarily something that's on my radar. But if you are, then you are looking at probably buying opportunity right now, or looking at the first area of supply back into this 103 level, and then either the 104 or 104, yeah, 104s. And then you're looking at an area here. And again, if you've got this wide zone of supply, what you're looking for is areas of support and resistance. So that zone there where you can see price bounced off that area level, level, level, and then resistance, resistance, resistance. So this 104, 50, half number, round number around there would be where I'd be looking for short trades. If I was looking to trade this currency pair, the same can be applied to this area right here. You can see where there is support, support, resistance. And again, it's looking at that area of confluences of supply and demand. Moving on to the dollar Swiss, again, dollar Swiss. Let's look at where these supply zones were. So we've got supply there. We can kind of drag this down to around here. You can see what prices did come back and sold off. We do have a level of demand. I'm wondering if this actually held. Now I'm not going to have that there. We've got anything further back. No, nothing further back, not for a while. So I'm going to leave that not going to have any demand until price proves that there is demand within that area. And again, what do I mean by that is you really want to see price prove that there is demand there. Then that creates a nice demand zone here. And then you're looking for prices to pull back into that zone right there. So wait for the market to prove that there is demand in that area. In fact, I'm going to draw the supply zone from there. So again, continued bearish bets, prices to probably come up to this area here before looking at any kind of short trades. Again, just a bit of confluence within that area. You can see where there has been a bit of resistance there. Looking at the lower time frame, for example, you can see that there has been resistance, resistance, resistance. So this area here is decent for a for a sell trade. And for those of you who are in the private members group, this zone is also looks like a really nice CPR zone just above that 89 two level to the 89 to 0.89 for six level as well. So that would be preferable for a nice short trade. I do like that. But let's see what happens going forward. Moving on to the dollar CAD and the dollar CAD. Again, dollar being sold off. And we're seeing really supply around here, around here as well. In fact, there's quite a wide zone of supply right there. And then right there. There is an area right here, we've made lower highs and lower lows. And then we do have some demand here. So in fact, what you want to do now is look for potentially buy trades if you believe that this is a buying opportunity, right? So there's a buying opportunity for the dollar proof of value prices pulled back. Is that an area you want to get low on against the Canadian dollar? Or if you want to continue getting short, you have to wait for a pullback into that supply zone and then look for short trades. You do have again some confluence of support and resistance at the highs of that zone there where you have some support there, support there, and then resistance. This is actually quite a nice area to look for short trades. You do have another bit of a micro level within there as well. You've got a bit of resistance and a bit of support within that zone there. So the 128 level and then you've got the 129 area around there, which is decent for a short trade as well. Moving on to the New Zealand dollar, US dollar, and this has been an absolute tear. So again, looking back, I don't really want to keen on supply zones that were formed back in 2018. So we're going to focus on the demand zones. If you're looking for a pullback and the traders who had that trend trading philosophy, we look for, for example, value. So these are areas where prices are proven value. So what you're looking for is pullbacks to areas of demand because it made a new high. This is proven demand. So pullbacks into this area. Again, just break that zone down from a daily timeframe perspective. You've got some support here. So you've got support there, support there. So decent for a potential buy, if you believe fundamentally that the US dollar is still going to continue to weaken against the New Zealand dollar. So yeah, I think that's pretty much it for the New Zealand dollar, US dollar, pound dollar, again, the pound strengthening. We have nice demand. In fact, this whole area right here, very wide area of demand. In fact, we've got some right here and you've got there and there as well. So quite wide areas of demand. But again, where within this demand zone, would you be looking to get involved in and just break it down? So just put that across. That's going to be areas where traders are going to be looking for trades. And then you've got another area around here. So being patient, definitely be patient with regards to this whole area here. It's not a pretty chart, unfortunately, but the rules that we use, which are basically higher highs and higher lows. So high, low, and we've made a new high. So this area here becomes demand. And I've got a course on this. If you type in again, if you go to my YouTube channel, look in the search and you can look at the how to draw supply and demand zones, the course there, and you'll see exactly why it needs to be this way. But we can also break down this wide demand zone using horizontal diagonal and dynamic support and resistance. So I think that's pretty much where we are from a supply zone. Again, perspective, nothing until this was back in 2018. So I don't think there's anything I'd really be interested in shorting unless again, price proves that there is strong supply here. And then what you want to wait for is price to come back up to zone, which would be somewhere around here. And then look for any kind of short trades. And as prices does, you know, if it does come down, then what you want to do is move your demand zone down with price as it starts to come down just to clear charts. I know this isn't necessarily the prettiest chart in the world, but it has to be drawn like this because there is demand around this area here. Moving on to the Euro dollar. Again, we were looking at the Euro dollar long around here. We've been long on the Euro dollar since August. Again, go back to the Jackson whole video I did in August and September, and you'll see exactly why we were long on the Euro. In fact, the forecast, we were forecasting, or the banks were forecasting one to five, a target around here. And you can pretty much, we were down at the 116s, 117s, 118s, when we were making, when we were looking at these forecasts, and you can see what has pretty much happened there. But anyways, looking at what we got now, again, really no supply zones, not really interested in any supply zones from maybe over two years ago. So again, if you're looking at the buying the Euro against the dollar still, then you're looking for pullback into zone. And then we have also some confluence of that area there. So that's the first area we're pretty looking for. Level of resistance, resistance, bit of support there. So within that demand zone, that's where we're looking to get involved. And again, if you can't see anything on the daily, then go down into, you know, the lower timeframes, and then get a bit more detail as to where there may be some, some more detailed areas of support and resistance for you to trade. Remember, it's all about the fundamental analysis, though. Yeah, it's all about the fundamental analysis to determine the direction you want to trade in. And then we look towards the technicals to look for the entries, but really quite, you know, a large move from 116s to 123s. So I'm expecting probably a deeper pullback, hopefully into this 121 area. If it comes down into that 119 area, that'd be brilliant for a nicer swing trade to the upside. But again, looking for downside trades, again, you'd have to wait for price to prove that there's supply there before looking at getting short on this currency pair, short on the Euro, long on the dollar. Euro yen, again, Euro yen do have, I think we had a bit of a spike, did a spike above it? It may have, let's have a look. No, it actually didn't spike above that supply zone there. So what we do have is, what I'm going to do is I'm going to put this zone probably around there. There is a bit of supply around here, not necessarily the strongest, but there is supply around here. I still want to wait for proof of value, so I'm not too keen on that, zooming out a little bit more. Again, the nearest area is going to be back in 2019. In fact, just for the price to see that there is supply in that area, I will put it here, but I would probably rather wait for price if I'm looking to get short on this to kind of prove that there is some sort of supply here. We do have a bit of demand prices to make a higher high here, so this area here is demand. So if you are looking for a trend trade, then you're looking at this area here, especially like the low of that area. I think that's decent around here. We've got some confluence of horizontal support around here. You are trading at the highs of the range, though, so not necessarily the greatest. A deeper pullback would be advantageous, but with this currency pair, again, fundamentally, you'd have to understand why you want to be buying the euro and why the euro is a bargain at this price or why the Japanese yen is actually a bargain at this price, meaning that prices should want to go a bit lower. Moving forward and on to the Aussie dollar, and again, Aussie dollar, Australian dollar has been on the absolute tear, and this is due to risk on sentiment. You've got demand zones really all the way around here. I'll draw maybe three zones. Again, supply zones, not interested in anything that is too far away, waiting for this to prove that there is supply. So prices to actually come all the way down, prove that there is supply there, and then look for any kind of short trades if I'm looking to get short fundamentally. So from a long trade perspective, again, on a daily timeframe chart, I don't know if there's any real support and resistance, turning points, zoom out a little bit possibly around here. This is where traders would be looking at anyway, but I think in the short term, I don't think there's really anything worth. There's a bit of confidence there. You can kind of see it around here as well. So that's decent. I think this would also constitute as a bit of a CPR on the lower time frame here. So anything below that is a 75 round number to 7406s would be actually quite a nice buy trade if we are looking to buy the Australian dollar, which I am personally, again, not financial advice. So pull back into that zone there would be nice. Even lower be even better for me to look for any kind of long trades. Again, short trades, you'd really look for price to prove that there is supply there before getting short. Moving on to the Aussie yen, again, Aussie yen. Do we have any supply zones back in May 19? Not necessarily fantastic. I'll leave that for now, but we do have some demand in and around these zones right here on to the REIT. I'll leave it like that. So again, very similar to the Aussie dollar pullbacks into these zones here. If you think that the Australian dollar will continue to go higher, which I actually do and this is due to risk on sentiment, obviously the vaccine, the market is looking past any kind of major outbreaks of COVID. So these are really the areas for me. I think the this 7880 level is a bit too high for me. It's quite expensive. I'd rather wait for a deeper pullback into maybe this area here, the lows, the 7760s, if I was looking at getting long on this area here. Again, got a bit of some confluences around here within this zone, and that's quite nice. That 77, close to that 77 round number, is quite nice as well for a potential buy. And moving on to gold. So gold, speaking to traders in the room and some that are in, I mean, I'm still in on silver and a lot of traders are in on silver as well. But we've got some demand zones around here. This area here between 1879 and 1855 isn't necessarily the best area until we make real kind of higher highs until this proves that that is definitely a strong area of demand. I'd probably prefer prices to really kind of come back to this 1830. So pull back into this area to look for any kind of long trades unless prices do make higher highs. And then I'm looking for anywhere around these demand zones around this 1880. This first demand zone, if you are looking at getting short, there is currently in a supply zone. But again, the question you have to ask yourself is why fundamentally you're looking to short in that area, the next area of supply here is going to be at the highs. I do like this technically. I do like that massive drop. There was definitely the gold was considered expensive at this area. So if you are looking to get short, that area is actually quite nice. But my long-term bias is for long gold. So that's where those are the areas I'd be looking at getting long at. And again, I think this area is actually quite nice because we do have some confluence of support and resistance within that area. So that 1859, 1860 level may be decent going down to a lower time frame for entry. So that might be nice. As long as we've got some good risk reward upside. Yeah, I think actually this area here 1860 is decent for a potential buy. And then you've got a nice little intraday support resistance zone around here as well within that zone there. So those are the areas I've looked for by trades. But again, this is not financial advice, nothing of the sort. So yeah, that's quite a nice those areas to look for potential buy trades intraday. Anyways, guys, that's it for this week. Hope you enjoyed the analysis. Don't forget to like, subscribe and share if you find the analysis useful. And until the next video, please check out the content I do have on trading180.com as well as the YouTube website. And again, until the next video, take care and I wish you all the best.