 Hi, my name's Leon Roe, Commentsy 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 are new or warm welcome to you and if you are returning and equally warm welcome to you and if you like and find the analysis that I provide useful every week, please don't forget to like, subscribe and share. Please press that like button as it helps the YouTube algorithm and gets it a bit more popular and recommended. Anyways, let's get into the trading economics and looking at the week ahead. And in the week ahead, we have, and let me just zoom in a bit, we've got the US and China will be publishing inflation and foreign trade updates and that's important. Inflation being I guess the valuation of money, whether you know inflation goes higher, it devalues the currency, which kind of puts pressure on the Federal Reserve to have to, you know, do a bit more tapering and potentially push forward rate hikes, which is, which and rate hikes generally appreciate a currency. So let's see what happens there and foreign trade updates in the coming week. While central banks in Canada, Australia, those are the two that we focus on anyway, we'll decide on monetary policy, they're expected to hold towards the end of the year. I think all central banks will end up holding into Christmas. They don't want to make borrowing costs and loaning costs more expensive and really potentially damage the economy before it's actually got going. So other important data to follow include US consumer confidence, UK October GDP data, German investment morale and factory orders, Japan current account and producer prices and again something about India's industrial output, but a bit of market moving news, but I think that the focus really is on the Omicron variant and I'm going to get into that when I get into the technicals, which is next. So starting off on the dollar index and the dollar index is just a measure of dollar strength against the major currencies like the euro, the yen and the British pound. And so we use this as I look at it anyway as a measure, like I said of dollar strength and use it as get some confluence to understand where really the best prices to potentially buy are, right? I'm looking to buy the dollar. So we saw last week into this week, prices did come down again into this demand zone and bounced up from there. I think the dollar being a bit of a risk off currency anyway and risk off is when there is a lot of fear, uncertainty and doubt, which we do have with the Omicron variant. The dollar does act as one of the safe havens. The other one is the Japanese yen and the Swiss franc, right? And the euro is, you know, slowly becoming a safe haven currency as well. So but for now, the dollar, the yen and the CHF, sorry about that, the Swiss franc are generally the safe haven currencies. So just looking at, I guess, the Omicron variant and things are still up in the air and ING have a great, I guess, article on the three scenarios surrounding the Omicron variant and the global economy. So nobody knows if the new variant will be more transmissible or deal a significant blow to the current vaccines. These are the best and worst outcomes for the global economy. It's important because money tends to flow in and out of certain currencies and obviously certain asset classes based off of whether they the degree of risk, right? So you've got extreme risk off, which is extreme fear, uncertainty and doubt. So extreme risk off would be what we saw last year, 2020, when the world was locked down due to the introduction of the COVID-19, right? Now things, although are quite bad, will never be as bad as that. Governments don't want to go into full lockdowns and we won't have the whole world going into a lockdown, right? So ING Bank have basically given three scenarios, an optimistic scenario, scenario a difficult but not a disaster and a Omicron deal significant blow to the recovery. So again, as I said, money tends to flow in and out of certain assets depending on the risk sentiment. So here we have an optimistic Omicron. The base case is for Omicron to be difficult but not a disaster. So that's ING's base case. And then there is Omicron a significant blow, meaning severe risk off, right? So then we have the Omicron assumptions, which are a faster spread in the optimistic Omicron. We have no basically Delta stays dominant, sorry, Delta stays dominant, or transmission advantage is minimal. The vaccine less effective is no, the vaccines work well, especially against serious illness and more serious illness is no milder illness aids path to normality, less relevant if Delta is still dominant. And the economic impact, which is always important. So what would the economic impact be? Or what do they see if we have an optimistic Omicron, which is the global recovery, I guess, continues and central banks continue to tighten and taper further into December and forecast, stay forecast, the US and also the Eurozone to grow as well as the Eurozone Euro dollar to actually fall. So the dollar to get stronger in a euro to get weaker, right? And we go go through the base case. When it comes to the Omicron difficult but not a disaster. And this is where the bank, I guess, see where see things as they are now and potentially into the future. So from an economic impact perspective, not going to go through each one of these, but the winter growth slow central bank banks pause on their tightening and taper, but 2022 tightening largely on track, which is what I would also have to agree with. And they still think that by the end of 2022, so in about a year's time, the Euro dollar should probably stay around about the 110. So any pullbacks on that Euro dollar when we get to it, probably setting opportunities if the base case or even a better optimistic Omicron, you know, you still want to potentially look for any kind of short trades and the dollar is a buy. So one of the other interesting articles on IMG currently is the central bank forecast. So they've recently updated their 2022 central bank forecast and European central bank, Federal Reserve Bank of England, Bank of Japan, Bank of Canada, Australian Bank and the Swiss National Bank. And ultimately, we're looking for great hikes or cuts. I don't think anyone is cutting at the moment due to high inflation. And we've got the QE balance sheet change as well, which is similar to a potential appreciation of a currency. And what we're looking for at the end of the day is for the central banks that are looking to hike first, yeah, the ones that are looking to hike first and hike more, as well as taper first and taper more are the ones that you want to really look to buy and the ones that are doing it least and last are the ones that you're looking to sell. Of course, there is risk sentiment that is the driving factor in the short term, but in medium to long term, once the world discovers a vaccine for the variant and once we get ourselves back on our feet, because that's what we do as a human species, this is basically what kicks in the fundamentals, right? So we've got the Federal Reserve looking to taper starting at the end, I guess, this year and into next year. And then we've got some rate hikes, potentially third quarter 2022 and the fourth quarter 2022, all things being, you know, working out as the bank, ING bank thinks, whereas the European Central Bank have PEPP reduced, which is a form of QE, but APP boosted. And then they're looking to potentially high crates in first quarter 2023, whereas you've got the Federal Reserve who are looking to high crates twice in 2022. So this should be where the money will ultimately flow over the next year, again, if this all plans out. So again, any short trades, any pullbacks on the euro dollar really should be looking for short trades for me anyway. And that means looking at the higher timeframe and looking for lower timeframe entries, the higher timeframe being the daily and then looking for supply and demand or supply zones on that daily timeframe chart and then looking for sell trades, right? So looking at dollar index, again, it's just really looking for pullbacks. The dollar is benefiting from its risk of safe haven status as well as potentially a monetary policy, right? Guidance. So any pullbacks, if you can get some as confluence, that'd be even nice. And then any kind of deeper pullback is at 95 area will be probably a bit more of a bargain if, you know, you're expecting prices to potentially be somewhere up here or the dollar index to be somewhere up here in the medium term, maybe the next three to six months, right? So any pullbacks, the trend is, you know, to the upside driven by, of course, fundamental analysis. So for me, that's where my bias is, again, anything can happen. And there are opportunities to get short, if you're looking for a short trade and prices come up to here to this 97 area, and you're looking at the euro dollar, potentially a buyer or any kind of dollar sell trades on any of the dollar crosses, then that's what you're looking for as confluence. So moving on to the dollar yen and dollar yen prices have come down to this demand zone, they did bounce up a bit and they've held so far. So, so yeah, again, my bias is, again, to a buy from a buy dollar perspective, not saying that prices are going to go up this week, because if, again, we're in a wait and see mode, and if the Omicron variant does get a bit worse, then you can expect the yen to strengthen over the US dollar. But again, once the fear uncertainty and doubt starts to dissipate, then this actually looks like an even better bargain to look for a buy trade. So my bias is to the upside, not too sure what's going to happen this week, but again, as we start to figure out the effect of the Omicron variant, again, we start to look for buying or selling positions. But this week is going to be a bit of a wait and see for me, or well, so far until some new information comes out. Dollar, Swiss, pretty much similar thing. Again, we've got bargain prices, price was a bargain at the beginning of November, prices made higher highs, obviously some risk of sentiment. The Swiss franc does strengthen more than the US dollar in a risk off environment, but that is a decent buy. I would look to the left though and see that this level has been touched several times. So for me, I think there is obviously a buying opportunity here, but for the guys that are in the group, there is a bit of a CPR around this area as well as a bit of a stop hunt towards these lows. So you may want to look for that rather than jumping in at these areas here if you see a decent entry and some entry candles. But again, if risk continues to go off, then you will have the Swiss franc strengthening, you should have prices continue to go lower, and then any pullbacks into that area of supply, which would be here, that would be your selling opportunity. Looking towards the dollar CAD and the dollar CAD, again, the dollar strengthening in a risk off environment against the Canadian dollar. Although the Canadian dollar, when we look at the central bank of Canada, they're looking to high crates actually quite soon as well. When it comes to the timeline, they're looking to hike one, two, three, four, five, pretty much every single, it's like every quarter for 2022, whether that happens or not, but it's really buying the rumour, right? If that's the rumour that the bank is expecting, then really the Canadian dollar should be a potential buy, but in a risk off environment, you're going to have this happen where the dollar is the dominant currency, and because the Canadian dollar is a commodity currency and commodity currencies generally don't do well in a risk off environment. So if risk remains off, you're going to see what is happening right now, but I do think these areas here could be actually really nice for a short, and again, just saying that this level has been touched several times. So in fact, if prices actually come up to this 130 round number, I do think that is a brilliant zone to look for any kind of short trades, but let's see what happens in the coming weeks. But again, any buy trades you're looking at, just look for a pullback to a demand zone, any of these demand zones before looking at getting long, if you want to continue buying the US dollar, pound dollar. So the pound again, in a risk off fight, you've got the money flowing into the US dollar, and that's what you've seen pretty much this week, prices really coming down into this, this demand zone continues to trend downwards. We've got a bit of a supply here. So supply, and then like I said, I mean, from a risk off perspective, you really want to buy the US dollar. Of course, the Bank of England are looking to also taper, as the QE potentially ends in this month and potential hikes into the first quarter of 2022, but that's all things being risk on. So I think there is a bit of a turnaround for the pound coming. I do think that if the data supports a narrative, of course, then I do think that the pound could be a potential buy in and around these areas. I'm not necessarily looking at the year, the pound dollar pair, but because you've got two currencies that are looking to, where the central banks are looking to high crates, and the best trades to take are really divergent type trades where you've got one central bank looking to high crates, and at least a central bank that's not looking to high crates anytime soon. So at least they're holding. And as I said, you really want to buy the currencies that are hiking first and short the currencies that are going to be hiking last. So for example, the Swiss National Bank are not looking to do anything with their currency, the Bank of Japan are looking to do anything with their currency. So those are automatic sells for me in a risk on environment, but in a risk off environment, a bit more difficult from the pound's perspective. Again, I don't think they're going to be hiking rates anytime soon, especially not this month into Christmas. But I do think at some point there may be a into next year, there may be a buying opportunity to buy the pound. And in fact, I'm going to probably delete that one year. And so I think there is an opportunity to buy the pound, but again, not against the dollar for me, I'm not looking at that currency pair. But again, if you want to look for any continued short trades, any pullbacks into that zone, and then look for any kind of short trade there, looking at the euro dollar. And we have looked at the euro dollar, and we did get a pullback, of course, and then we've got some selling opportunities. I'm looking to get involved in this as a short trade. But there was some criteria that wasn't really met for me. Anyway, there was a trading opportunity, a bit of a capture pain relief zone on the intraday. But on the higher timeframe, I'm really looking for a bit more of a stop hunt or if that doesn't work out, I think a higher move into that one 1450 area. And that for me would be would represent a bit more of a bargain price. Because if this is a bit of a high to a low, then you've got in between that expensive and bargain area, then you've got your fair value somewhere around here. Of course, nobody knows, it could actually start right here. And if that's the case, then in fact, that one 14 area is probably going to be a decent fair value to look for their fair value price to look for any kind of short trade. So for now, I'm not looking to buy the dollar, but I don't think the setup is just right technically for me to look for any kind of short trades just yet. I think better prices, if we can get some, then that'd be brilliant. If not, if prices continue to fall, for example, if prices continue to go down, then that, you know, I'm just waiting for a pullback into a supply zone before the connect getting short. That's what, you know, my plan of action is. But buying the euro at the moment, I think is is not really the one to, for me, it's not necessarily an option. I don't really want to buy the the euro, not at all. So moving on to the next currency pair, which is the Aussie dollar, again, Aussie dollars, Australian dollars suffering really from it being a commodity currency. Again, the US dollar in a risk-off environment in a straight fight is going to win. So you've got, this is the reason for, you know, this, the set off in this environment, any pullbacks into that zone are going to be really nice short trades. Again, going back to the ING forecast, central bank forecast, looking at the federal, sorry, the Reserve Bank of Australia, they're not looking to hike potentially until what a bank doesn't think they're going to hike until the first quarter of 2023. So again, they're lagging behind, right? The lagging, the lagging central banks are really the European Central Bank, the Australian Central Bank, as well as the Bank of Japan and the Swiss National Bank, whereas the leading banks are the Federal Reserve, the Bank of England, and the Bank of Canada, right? So those are the banks that you want to look towards potentially buying, or I'm looking towards buying again, not financial advice. But again, just waiting for more risk-on sentiment to come into the market. If risk-on does come into the market, then I do think it probably is going to be a bit of a pullback, but I still think that the dollar should potentially be still a buy against the Australian dollar. So that's pretty much where we are. If you are looking to buy the Australian dollar for whatever reason, then technically I think this area is okay, but not fantastic as it's not the freshest level of demand. And then finally moving on to gold. Gold has been a bit surprising because given the risk-on sentiment, you would assume that gold would have gone a bit higher from here, but obviously during the week, it hasn't, right? Again, we understand what typically happens, but over the medium to long term, but price in the short term over the week or the month can be pretty uncertain and a bit random, but you would expect with the uncertainty that price should continue to go higher. But if the dollar is also going higher, that could put a spanner in gold's work, but I don't think with higher inflation going on with a lot of Omicron uncertainty, in fact, I think what the market is actually doing is looking to buy gold for a lot cheaper than they would want to buy here. So the banks and the financial institutions don't buy in the way that retail traders buy in the sense that they're looking to scale in over a period of time via iceberg orders. They're not looking to just take one trade or 10 trades this week and place a tight stop-loss. They've got massive orders to fill. So if they've got massive orders to fill and there's not enough liquidity for them to fill, then they will look for the best prices over a couple of weeks to a couple of months before maybe turning price to the upside. So let's see what happens with that. But if you do want to get short on gold for whatever reason, there is a supply zone between that 1815 and 1788. So I'll put it at the top of this supply zone, which does have actually some confluence of, you've got a bit of resistance there, level of past support and resistance, which is actually just supply and demand zones, past supply and demand zones that have been projected into the future. But you've got some some confluence there. So technically a really nice zone for a short, but overall if I was looking for a bias, I would probably say gold should be a buy at the moment. So regardless of what happens in the short term. Anyways guys, that is it for this week. I hope you all stay safe and take care and until the next week's video, I wish you all the best.