 Hi, my name is Liam Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's supply and demand for us in gold, fundamental and technical analysis for the week starting the 17th of September. So, getting into this week's news and so it says this is from TradingEconomics.com. The financial landscape will be heavily influenced by the Federal Reserve's interest rate decision on Wednesday. Additionally, in this United States, all eyes will be on the release of the S&P Global PMI figures. That's important for GDP and whether the economy is contracting or holding up better than expected. Further, more central banks in the United Kingdom, Japan and Switzerland will be deliberating on their monetary policy direction. So, pretty much they are going to be announcing whether they'll be hiking, holding or cutting the expectation for the United Kingdom is that they're going to hike rates. Japan is going to be holding rates and Switzerland, apparently, it's going to be a hike, but I don't think they will, but it could do. But there's reasons why they might not in terms of they've reached their 2% inflation target and GDP also contracted last week as well. So, they may not hike, but the consensus is that they probably might one more time. And they will be deliberating, yes, on their monetary policy direction. Investors will also close in monetary inflation rates in the UK, Canada and Japan along with flash services and manufacturing PMI data for Germany, the UK, the Euro area, Japan and Australia. So, plenty of additional news to come out and that should create some volatility this weekend. If you are interested in joining the Forest Mentor in Discord group that I run, it opens on the 4th of October. So, go to Trading180.com if you want to find out more and if you want to learn about fundamental analysis, stop hunts, supply and demand, capture pain relief and pretty much be mentored by me, then go to Trading180.com to find out a bit more information. Now, going on to the charts and some more fundamentals and technicals. I guess on the dollar index and the dollar has been pretty much rallying to the upside last week. I was looking for, say I was, but expecting maybe a price to pull back a little bit further as to some confluence for a buy opportunity. But prices didn't pull back, but it created another higher high higher low. And so the next demand zone, if you are looking for any kind of confluence on with the dollar and the dollar index is going to be right around here. So, any kind of pullback from this zone, from prices where we are, if prices pull back into that area there and you want to also look for some long trades, long dollar trades as well in that area on a currency pair that you're interested in trading, then that is pretty much what you're looking for in terms of confluence. I think that's nice also as well if you do get a pullback into any of these zones as well. Now, my bias is actually long dollars, been long dollars for a little bit. And although the Federal Reserve are expected to hold in September, there was talk about a hike in November. And of course that is data dependent. And also as well, higher for longer rates is supporting the US dollar. So, here this week or last week we had US Core CPI picks up keeping another Fed hike in play this year. So underlying inflation quickened for the first time in six months. Overall consumer prices jumped in August on higher gas costs. So, it says here underlying US inflation ran at a faster than expected monthly pace in August, leaving the door open for additional interest rate hikes from the Federal Reserve. And so, obviously a central bank's mandate is to get inflation down to the 2% target. And if inflation is moving away from that 2% target and moving higher, then increases the chances of a central bank looking to hike. So, when looking at the dollar, the higher for longer narrative or, you know, the potential for a rate hike in November is probably likely to support the dollar for now. So, pretty much any pullbacks to these demand zones is where you're looking, well, I'm looking anyway at for complements in terms of buying the dollar. So, DXY for me is a buy, the dollar is always a buy. Dollar yen and the Federal Reserve holding in again in September, of course as we know, but the Bank of Japan also have their interest rate decision this week and the expectation is actually for a holding rates, right? But what we've been talking about over the last few weeks and months is that the higher prices go on this dollar yen is the more that the Bank of Japan is likely to intervene because pretty much the yen is really undervalued or cheap. And the Bank of Japan don't really want the yen to devalue that much. And last year, when we did have the intervention, we had it twice. It was once around the 143s, 144 area. And then we had one at the 152s is when, you know, the last one was. And so we get into that intervention zone. And so we had Ueda, who is the Bank of Japan governor, come out and pretty much he made a statement last week Sunday, which the market determined as being a bit hawkish as he's been very dovish. But the headline is that Bank of Japan watches bring forward rate hike forecast on Ueda's remarks. And so Bank of Japan watches move forward their forecast for an end to negative interest rates after Governor Kazua Ueda touched on the possibility of an interview published over the weekend. So all 46 economists surveyed by Bloomberg over the past weeks said Bank of Japan will stand pat on policy next week. Next week's board meeting with half expecting authorities to abandon the sub zero rate by the end of June. So there's the potential for an end in interest rates or negative interest rates or at least yield curve control potentially this year, depending on how high inflation and how sticky inflation is this year. The data has to support that narrative. It says here that there's a chance of an early policy shift. Mr Hiroshi Namioka, Chief Strategist at TD Asset Management Co. Every policy meeting has become live since Ueda took the helm. So my bias is to buy the yen. I understand the risks involved in buying the end at the moment, because fundamentally, and from a central bank perspective, there's such thing as the carry trade where traders will buy the lower yielding currency, borrow it, and invest in a higher yielding currency. So at the moment, the yen is the lowest yielding currency at negative interest rates. And so that pretty much is a way that obviously investors can make money in buying and investing in other currencies like higher yielding currencies, like the dollar, and basically make the difference between the two interest rates. But if that starts to come to an end where the central bank are on a hiking cycle, the bank of Japan, then or potentially looking, then traders are going to position themselves really to start to buy the yen. So I'm looking to buy the yen. It's going to be tricky against the dollar, but the yen against some other currencies I am looking at. But if you get up to these 1, 4, 8, 1, 4, 9s, expect some sort of intervention to take place, which could push the dollar yen in all currencies pretty much maybe down to these 1, 4, 3s, 1, 4, 2s in the short term. So that's where I am on the dollar yen. Dollar Swiss got a long bias on this. And so the Swiss National Bank, they say one more hike is expected, the consensus, but I don't know whether they're going to hike. I don't think they will. And even if they do, I think they're definitely at the end of their hiking cycle. That most central banks are, to be fair. So yeah, any pullbacks, we're waiting for a pullback to get involved in this on this currency. So any pullbacks into probably my preferred zone would be down at the 8850s, somewhere around here to get long. Of course, you can look for long trades. Here's a bit on the expensive side for me, but I think any pullbacks into this zone here or down into the 8770s, I think is going to be a really nice buy in those demand zones. Dollar CAD and the dollar CAD, the Canadian dollar, in fact, I think is likely to strengthen at least in the short term. And I'm not looking to buy the Canadian dollar against the US dollar, something cheaper that maybe the Euro CAD or even the CAD Swiss. So yeah, I think any pullbacks could be buying opportunities. But for me, I'm not really looking to trade this pair. I think there are better pairs to buy the Canadian dollar against and also as well by the US dollar against. So if you do, but if you do want to get long, I think that is a really nice zone to get long. And if you are looking at short trades, I think this supply zone right here is okay as well. Let me just change that to supply. And yeah, so any pullbacks into this zone, I think a decent, especially up at the 137, the absolute highs, I think is all right. Many traders will recognize that who is in the group as a CPR zone, matter of fact, up at these highs. So decent trading opportunities on that dollar CAD. But fundamentally, I'm not really keen on it looking for bigger divergences. New Zealand dollar, US dollar, yeah, the par for these resistances can still continues to be to the downside. We didn't get quite a pullback into the into this supply zone, but I did get in on a bit of a stop hunt around this area on an intraday trade, which is now profitable. So if I do get another pullback up into these zones, for me, I'm just looking for short trades. There could be a decent pullback, of course, on the dollar in the US dollar simply because of the announcement on Wednesday, if, you know, Jerome Powell is maybe a bit dovish, then all the market interprets him as being a bit dovish or the data doesn't support, you know, further rate hikes, then we could see the dollar start to sell off a little bit. But I think that's just really it's going to be short lived. I think there's going to be definitely pullbacks into these zones right here is what I'm looking for. So there and then there as well in these these supply zone areas, we've got some support and resistance. Looking at the pound dollar and I now am short, I've been short on looking for shorts in the pound dollar over the past week. But I think a pullback into this supply zone is going to be nice. Yes, the Bank of England are expected to hike one more time, but the tide is turning, right? So Bank of England turning glumia on UK outlook brings rate pours into view. So central bank watches see a change in tone since last summer investors anticipate just one more hike next week in the cycle. So as the UK UK's economic outlook gets cloutier, Bank of England policy makers are suddenly speaking more clearly about the choice before them. And so Andrew Bailey, who is the governor of the Bank of England, was quite dovish last week in times of his assessment on interest rates and inflation. And so I think that the and also as well there was there was GDP came out, which was worse than expected as well. So I really should have brought up that news article one second one sec. Right, here it is. So sharp decline in UK economy in July revives recession risk. And so there was wet weather and strikes held back activity across services figures added darkening mood for the second half of the year. And so when you have and I was going to talk about this when I got to the euro, but I guess I can talk about it with the pound because it's the same kind of scenario. But I think the I think Europe is probably in a worse position when you have rate hike. So many of you this week, who would have got long on the euro based on a rate hike, probably left scratching your head and thinking, why is it that they hiked rates, but prices went to the downside? Now, after this video, I'm going to post or there's going to be a video from a private mentoring group, and I have my private mentoring groups on every Wednesday. And I'm going to talk about in that video why rate hikes aren't always appreciative of a currency. And so the reason why the euro went down and why the pound is probably could be likely to go, you know, depreciating deep value as well is that a is because you have a stagflation face, right? So stagflation. So what is stagflation? Right? Stag. And I'm not going to write up basically the inflation stagflation and stagflation is when you have a growing economy, but sorry, a growing inflation, right? So rising inflation or sticky inflation, and you have a shrinking economy. Yeah. And so that environment doesn't bode well for central banks. In fact, it can be very negative for for a currency. So that's one thing and B as well is that the rate hike is more than likely priced in already, right? So when looking at, you know, buying the room and sell the fact, a lot of traders will wait until the day. So they will say, Oh, yeah, you know what, I'll wait until, you know, the day that they release the rate hike, but that's already been priced into the market. And so when I say priced in, I mean that the the market typically has a bit of an auction or a range where they think the value will be of a currency. By the time the news is released, right? Because everyone's got a different different expectation or value. And so it doesn't mean that because, you know, by the time we get down here, that's basically meaning that that's what is priced in is going to be that at that level and stay at that level. It just means that the overall value of the pound that the market is, you know, thinking that it's it's worth an exchange rate is likely to be priced in in terms of a range in terms of an auction. And so the pound might basically fall. Yeah. But you what you're what you're probably likely to see is not necessarily against the dollar because it depends but against some other currencies, where instead of price advice, it might fall a bit more. But then it will eventually establish some sort of auction, right? And then some sort of range. And so I think that that's pretty much where the the current pound is priced into the market. So yep, I think for me, any pullbacks into a zone in the in the for the supply, that supply zone is for me a buying opportunity. And I say a buying opportunity for the dollars or a shorting opportunity on this pair, because I think that the market is really fearing that the US, sorry, the UK economy can't really or in a sticky situation with stagflation. And I do think that we're going to see the pound not necessarily sell off massively. Don't know where it would be massively. And there are forecasts for actually maybe 120s, 119s over the medium to short term or by the end of the year. But I do think that any pullbacks and any positive price action or appreciative price action on the pound is likely to be short lived. So if you're going to come up to here or come up to here, and if it does, then I'm going to look for some some short trades on the on the pound dollar pound yen. Again, I do think there is some sort of intervention potentially. And as the pound is no longer the currency that is looking like an absolute buy, delete that demands. And I do think that there should be a bit of a pullback back into one of these zones. And I'm looking for a short trade, hopefully, the way of the Bank of Japan is a bit more hawkish. And if he is, then this should want to sell off either at this area here, or you're looking at pullback up into that zone there, and then to the downside. So that's where I'm thinking I want to get short on this currency pair. The euro dollar. So again, a lot of traders would have gone long euro dollars this week in the group. In fact, in fact, I'll just find the group comment that I made before the announcement. So here we have a comment that I made at 112 before the announcement. And I'll just kind of zoom in on this, make this a bit bigger. This is in the discord group. And I said, Hi, everyone, I think the euro is an elusive situation. Even if they hike today, it seemed like the consensus is that the rally will be short lived short lived as a subjective term. But ultimately, the euro isn't a buy medium to long term. The key for any sustained rally is the speed is if the speech is hawkish. And if the market believes the ECB is hawkishness, have a look at the scenario chart to get an idea of what could play out. And also, if what is likely to happen 109 seems to be the peak for an EU rally. So pretty much a lot of banks were talking about the the euro basically maybe rallying on a on a on a rate hike. But either way, you know, my bias was regardless to get short. And, you know, the main reason was because, you know, we could pretty much see that the euro wasn't doing wasn't doing great in terms of their economy. I've been saying it for the past few weeks, maybe about a month or so. And it says here that the euro one of the art causes is that the euro is set for record run of losses as ECB seen done raising rates. So currency falls for a ninth week as markets price no more hikes, hedge funds turned bearish while analysts lower forecasts. And so it says here that traders have been ditching the euro over the past two months on bets. The ECB will struggle to tighten monetary policy further amid signs of a worsening economy. That view got a boost this week when President Christine Lagarde delivered a 10th hike and signaled that the peak in rates had been reached. So pretty much the narrative now is changing from interest rate hikes to now if the the economy can avoid a recession. Also as well, I think it was last week, the euro economy was downgraded. I think the quarter on quarter growth was downgraded. And it's basically barely flat lined. And so the euro at the moment is not doing well. And that's the reason why you're seeing this move to the downside. And whereas the US in fact has been surprising to the upside when everyone thought that the dollar was in the US economy was going to go into a recession, they've actually been like I said, the labor's been robust and the data has showed been quite positive. So I think for me any pullbacks into any one of these supply zones is going to be the where I'm looking at taking some trades. So any pullbacks into that area there or that area above there. So the 107s, 107s, 50s out to the 108s is going to be a really nice area to look for some short trades. So again, just like the pound, the the ECB economy is struggling. The hike had been priced in also as well. With so many people going long as well here, right in that candlestick there, low trades went long. There was lots of liquidity to the downside, right? And basically that's what happened. A lot of traders got taken out going long and maybe are caught in their position. So a really good trade idea and I call this a new CPR is when traders are caught going the wrong side of the market, any pullbacks into this zone I think are going to be really, really nice for a short trade. So anywhere from this, it's 10721 up to probably this 10740 area I think is going to be very, very, very nice for a short trade. And it's basically where I'm looking to get involved in that trade. Of course, this is not any kind of a financial advice, but yeah, just telling you what I'm doing on that one. Euro yen, I'm looking at the same kind of trade on the Euro yen. This demand zone is holding up. There's a bit of a stop hunt here below that area. But I do think if the Euro being a bit more dovish and holding rates, expected to hold rates, and the Japanese yen potentially looking to hike rates by the end of the year, my bias is to the short side now. So I do think I want to get short. And if I'm getting short, it'd be somewhere around here. It's going to be the first area on a supply and demand zone perspective that I'm looking for. If you do want to get long, you could look for longs right now, but you know, pretty look for any fresher zone of demand as this level has been touched several times and is likely to potentially break. But again, it does depend upon what happens with the Bank of Japan's statement and whether they're a bit more hawkish. If they remain dovish, then you're probably likely to see prices move a bit more to the upside. EC Euro pounds, not looking to take this pair. Both currencies are pretty much in the same boat, although I do think that the pound has the slight edge. So moving, if you are looking to take a trade and prices move up to these areas here, I think that's decent. Don't know why you'd want to buy the Euro against the pound to be fair, but that's where we are. I think rather buy the pound, which basically means to short this currency pair up into these areas if you get the opportunity. But again, I'm not looking to take that pair of tools, not really on my list. Aussie dollar, I think the Aussie dollar is still continuing to be a sell. I do think that this is slightly, obviously expensive, but I think any pullbacks up into this zone here, I think it's going to be really nice and even further higher would be a better shorting opportunity to get long on the US dollar. What will support the Australian dollar? I think the Australian dollar did have some decent news this week, but and China came out. There was some decent news out of China as well. And I think that is what's really going to help the Australian dollar to be a buy if China starts to grow. But I want to see a bit more consistent data out of China for me to want to buy the Australian dollar. And even then I'm not really going to buy it against the US dollar. It'll be probably against another currency, a weaker currency than the dollar. So if you do want to be a buyer of the Australian dollar, you're looking at a pullback down into either that zone there or that kind of longer term demand zone down into the 63 round numbers somewhere around there. And finally, gold and so gold did rally a bit on Friday. But again, as I said, I think said it from last week and a week before that with the dollar strengthening prices are more likely to come to the downside. If you believe that the dollar was going to be the buy, still not convinced by this. I think possibly actually, if obviously the dollar comes out and there is a dollar bit of a dollar pullback, then in fact, gold could rally a little bit. But I think once the dollar starts to get its strength back, then I think we probably might head down to the 1890s. But again, that depends upon how hawkish the Federal Reserve are and what they say on the expectation of the dollar and the inflation and data. Because ultimately, traders are coming out of gold based on bond yields being basically giving you a 4.5% return. And also as well for holding the dollar, you're getting a return where it's gold, you're not really getting any kind of return. And so with that, although gold does act as a safe haven, I think in the short term anyway, maybe some gold bugs are going to be a little bit disappointed. But ultimately, gold is always a long-term play as it acts as a hedge against inflation. And so gold is pretty much just going to end up going higher and higher eventually, especially as we head into the economic cycle where countries are going into a recession. So recessions pretty much mean risk off, which then means more buying of gold. So let's see. But I think in the short term, I think with the dollar still being a buy, gold could potentially suffer. But if you are looking to buy gold, pretty much any pullbacks into demand zones are where you're looking for buys. So anyway, there, or I think the 1886 area is going to be quite nice as well as a buy there. Anyways, guys, hope you have a great trading week. Don't forget, I've got another video after this for you to watch. Hope you're going to have a great trading week and take care. There's no supportive data for me to want to get long on the New Zealand dollar, but there was something interesting here. And they said the main surprise though is though from a policy perspective was that the RBNZ has signalled that it plan to maintain tight policy for longer as it becomes more evident that the economy is already in recession to help ensure that inflation falls back to target. The RBNZ expected economy to continue contracting. And despite the weak growth outlook, the RBNZ updated its forecast from last week signaling and sorry, last week signaled a higher risk of one more rate hike. And that rate cuts aren't likely for about 18 months. So there is a bit of a bit of a light at the end of the tunnel. But when it comes to rate hikes, typically, typically, we say that rate hikes should appreciate a currency. But if they are in a recession, rate hikes will contract the economy even more. So although, so the market has to decide whether you know, they want to buy the New Zealand dollar in the face of the economy going into a deeper recession. And so if the market is looking at it like, okay, well, you know, it could be, they could go into a recession, but they'd like to come out of it sooner. If they hike rates and get inflation down, then the mark then then then a rate hike may appreciate the currency ever so slightly, or maybe a bit more than, you know, we expect. But if the market is more focused on, in fact, the economy and and the fact that it's negative for the economy, and it will make the economy go into a deeper and longer recession, in fact rate hikes in that environment may not be so supportive. Yeah, it might actually be a negative. So it doesn't mean that because you hear that they're going to hike rates that automatically you want to be a buyer, right? It doesn't mean that. In fact, again, as we know, I've just explained, it can be actually negative. So if you do, if we do see a rate hike on a New Zealand dollar, don't just automatically start to buy that New Zealand dollar because it could mean, you know, you could see a short term pop up, but the market is more focused on the recession side of things and it could drive the New Zealand dollar down. Sunny says, Swiss is a mystery. I avoid it. Yeah, by the way, I got short on the New Zealand, the New Zealand, sorry, the Swiss Yen, and it was really good. It's been a really good trade so far. New Zealand just don't want to cut early to ensure interest rates work through the economy. Their inflation is still high. Yeah. So they're in a very difficult position, Sunny, a very, very, very difficult position because they've got high inflation, but they're in a recession. So it's like the central bank, in fact, is in a very, very, very difficult position. So even if you wanted to buy the New Zealand dollar based off of interest rate hikes, it's a very difficult buy because the fact that they're in a recession. Do you know what I mean? So I personally would not, I'm not even thinking about buying the New Zealand dollar. Anyway, I'll just finish this off and then we'll move on. So the recent sharp drop in the Kiwi has attracted the attention of Arbien Zed's chief economist, Paul Conway, who stated that they will be mindful of the depreciation going forward. He said that recent depreciation effects of reduction in interest rate differentiations and risk aversion. The New Zealand dollar has underperformed this month alongside other commodity related currencies. There's been more focus on the loss of growth momentum in China. Arbien Zed chief economist Conway stated that if there was a more significant slowdown in China than the Arbien Zed expects, hurting exports and growth, we could lower the OCR sooner than we have signalled. Lower the OCR meaning we actually could cut sooner than they have signalled. Overall, the development should reinforce the Kiwi's recent bearish trend. It should reinforce it. So that for me, if you're looking at buying or selling the New Zealand dollar, there's no way on earth I'm putting my money to buy the New Zealand dollar. That just can't happen. So there's that. There's also some other news there. So that's with the New Zealand dollar done.