 Hi, my name is Leon Rowe currency trader and trading coach at trading 180 calm and welcome to this week's supply and demand Forex and gold fundamental and technical analysis where we apply fundamental analysis principles to establish directional bias and then Look for technical analysis strategies like supply and demand to Time trade entries risk management and established profit targets And if this is your first time watching a very warm welcome to you And if you're returning again and equally won't welcome back to you Don't forget to like subscribe and share if you find the content that I provide every week of use so let's get into the fundamental analysis and the week ahead looking at the major events I guess and Zooming in on the trading economics website earning season, which is all right But what we're focused on really is the Fed and monetary policy, right? So while the Fed will be deciding on monetary policy On the economic data front the US is releasing the first estimate of their second quarter GDP And I was saying in a private video to the members of the discord on my desk discord members group Is that this is going to be quite an important? GDP Announcement as it is the first estimate of the second GDP report so Definitely worth watching as well as Wednesday's Fed Regarding the monetary policy because ultimately that is what will move Price in the medium to long term and sometimes even in the short term Of course price moving a short term But prices could be more random in the short term, but you'll see The I guess the policy play out in medium to long term price And if you're a swing trader like myself, that's what you're really looking towards is the medium to long term price Not necessarily focusing on you know short term day-to-day price action as that's more driven by liquidity accumulation avoidance of slippage and so on and so forth So we've got durable goods orders and personal outlays other GDP updates to follow include those from the euro zone so again, that's going to be important and We don't trade the rest as far as Sweden, Mexico or South Korea, Taiwan or the Hong Kong Currencies elsewhere the euro zone and Australia inflation data will be keenly watched as well as Japan Retail sales and industrial output and China and it's be PMI surveys Again inflation data is very important because it directly influences the central banks monetary policy So if you don't know Really, what's going on with monetary policy and why it's important? I advise you go over to my YouTube channel, right? So free YouTube channel right where and let me just zoom out a little bit where I if you click on the Communities tab right if you go to a trading 180 home you go to communities tab I ask for various questions and Thank you to those who have been participating. You should be learning something from this as well I will create videos on this as well just on each one of these Surveys that I put out asking and basically explaining I should say the I Guess the the answers right wherever, you know, what the effect of reduction on bond purchases by central banks have an essential bank Or on a currency and I will explain these and do some short videos for you, but Please go through these fundamental some of these fundamental analysis polls because In the questions because if you do and you get them right then you're really going to understand why Inflation data is important right why GDP is important to medium to long-term currency direction so It's well worth taking part and and also commenting as well And I will create some content for you regarding the answers to those questions So you can start to learn really bite-sized fundamental analysis so keep an eye out on the Channel for some updates this week anyways moving on to the technicals and some more in-depth fundamental analysis Let's start off on the dollar index dollar index In fact, let me start from the Nassit dollar index and So looking at last week's price action We're really again grinding higher when it comes to the dollar. This is the reason the reason why is because If you're looking at dollar expectation, for example with GDP Which is a which is a one of the main measures of Economic strength and dollar strength overall You're seeing the expectation is for really dollar and US growth, right? So we're seeing higher highs and money kind of go into the dollar and reason again Another reason why is because the Fed are expected to look to high crates within the next year or two And hiking rates Basically has the effect of appreciating a currency, right? So you're seeing the buy the rumor Take place in any pullbacks really should be buying opportunities until Unless the data doesn't support that narrative. So What we have again this week is GDP data So we need to obviously keep an eye out for GDP data as long as the GDP is also continuing to grow and it comes out as Expected the figure comes out as as expected and the data does then you can expect the narrative to maintain And for probably a stronger dollar in the medium in the medium term at least Right, so the data has to support the narrative. It has to support the rumor But this week we did have just going back And analyzing some of the market. We did actually have some Some risk off right some risk off sentiment risk off being fear uncertainty and doubt on the 19th of July or the Monday We had the footsie 100 tumble and stock markets around the world really In 44 billion tumble dowels worst day since October as COVID fears hit the market as it happened But then we had Pretty much for the rest of the week. We kind of recovered pound his five months low versus the dollar But markets recover amid COVID-19 worries And then we pretty much had a bit more risk on sentiment So I always say that risk off can pull and can push prices to where we want to be buyers If you're brave enough right to buy in a risk on Environment and continue and understand that some risk off sentiment can be short-term some risk off can be Medium to long-term right and it's something that I do Go over in my private mentoring groups with With the groups with the group of traders that have signed up recently. They're learning about that right now benefiting from that and a few traders actually benefited from buying in fact You know dollar and a lot of commodity currencies and have made some decent profit anyways Yeah, so we had a bit of a risk off and one of the things again We have to keep keep an eye on obviously is the corona virus This article says the most important number of the week is 50,000 the number of new corona virus cases may be on the rise But markets recognize that fiscal and policy support isn't going anywhere really interesting article from Bloomberg But one of the things that you have to again just understand is that the reopening of the economy is not an event But a process and the moves in the market can become easily understood when you consider that the government Fed have made in bed You know you can substitute fed with all central banks really have made clear that their commitment to doing whatever it takes to ensure The process continues before stepping back. That is the fundamental driver of markets meaning that we sometimes will have some risk off Environments, right? It's risk office going to come delta variant does spread but governments and central banks are going to do whatever they can to Maintain the growth so we might have periods of risk off But overall where is the path of least resistance? Hopefully in the medium to long term should be more upside. Of course, we're going to get pullbacks Of course, we're going to get maybe days of massive pullbacks, right? But overall Government and banks are still going to want to support the economy and by doing that It provides some buying opportunities. So You know any pullbacks again within from a technical analysis perspective as long as the narrative Supports or data supports narrative really you're looking for pullbacks into any of these demand zones if for example This week we've come out to a really nice area a nice supply zone area and if the if the data doesn't support the narrative then I think the the US dollar is going to sell off and Quite heavily matter of fact because of potential stagflation worries and not necessarily spell it out but stagflation and That's a difficult situation for the Fed to be in And I think that will have a negative impact if GDP does struggle with does miss The mark and come out lower than expected. So this week is a Really nice technical level, but also could be supported by fundamentally or fundamentally could be supported And then push prices a bit lower So let's go on to The dollar yen and we wouldn't necessarily trade the dollar index But from a dollar yen perspective, you would definitely look for any kind of short trades in around these areas if again GDP data comes out as As missing the mark if it comes out better than expected you can definitely expect a Move higher for the US dollar because again that would support the narrative of potential great hikes If you're looking for any kind of pullbacks this week, we do have and let me just I guess Clear this up. We have got a bit of a wide zone to be fair When it comes to demand in that area but not to worry if you have if you find yourself in a wide zone of Demand what you want to do is look for support and resistance areas within that wide zone and there's one probably just around here Which looks like a Level right and then you've got looks like another one probably just around here So within this wide zone of demand, these are the areas that you want to look for potential Buying opportunities, right? So it's supported by higher highs higher lows. No, this is proof. Oh, sorry proof of value All right, this is definitely a bargain area if prices do come back anywhere down here or down here This is where we want to be potential buyers or up into this one 111 50 area 111 6 6 area. That's where you potentially want to be a seller again understanding that potential dollar sell-offs based off of fundamental triggers and if we do come back into some risk of sentiment as well Right, then the yen does benefit from that So Monday we could open up and then the market could start to Worry about global growth again And if it does if you start to see that then probably look to buy the Japanese yen in the short term Moving on to the dollar Swiss and it's very similar with the dollar Swiss hasn't really moved anywhere this week It's been in quite a tight range if you look at where the range has been We are in a summer month. So not necessarily the best So we've only really moved a hundred and fifty seven pips and that's been in the range since It's that June 18th. So over a month. We've only really moved a hundred and What's I said a hundred and maybe 67 or this 160 pips probably something like that, which hasn't been, you know, great if you're a swing trading But this is you know, the markets do have those a bit more demand. I would probably put demand probably around here So between it's high and it's low see what happens But again if you're looking at potential dollar strength any kind of pullbacks of buying opportunities again if you're looking for Dollar sells based on GDP or disappointing or or a dovish Fed for example, then that area there is decent It's been touched several times So I'm not necessarily the biggest fan of that supplies and I'll probably say this area here But again, you need a catalyst. I would say and and a dovish Fed or GDP not coming out as expected And worse than expected will definitely be a decent Short-term catalyst moving on to the dollar CAD dollar CAD We again with the dollar the expectation of the dollar You know Appreciating literally pulled back up into this one to eight area In fact, there was a couple of bank analysis bank analysts Saying that the one to eight area was a decent sell Nice pullback if you consider where we've literally, you know, been from the highs of 2020 March to low, right? This is just a pretty much a Decent pullback do a pullback anyway And we could see potentially again, depending on what happens with a dollar a Bit more of a sell-off but if we do see prices pulled back before the GDP and and Fed announcement and monetary policy and you see again some good news You probably can expect prices to start to you know Go higher from here from this demand zone. It's one two five one five area down to one two four area The Canadian dollar is and the Bank of Canada are one of the first central banks to look towards hiking rates as well So for me, not necessarily a great pair to trade as you've got two strong currencies or potentially strong currencies Looking to do is pretty much the same thing. So you might see more of a ranging market state In their future, but it depends on really what the dollar comes out with this week New Zealand dollar Again with the New Zealand dollar New Zealand the Reserve Bank of New Zealand are Looking to hike rates at some point as long as the data supports that narrative and you should see Probably more of a ranging market. I'm a buyer in New Zealand dollar, but just not against really the actual US dollar we do have pretty It's pretty kind of When it comes to supply and demand we are in it's really kind of tight range and I'm gonna Move this up to probably around here. I'll keep that there for now And this goes yeah pretty about here So yeah, we're into this really kind of tight range and again if you see a wide zone of Supply or demand best thing to do is to really kind of break it down You can see that there was some support and resistance within that zone there where you've had support support Resistance there bit of support there wasn't much recently, but it is there around that 70 round number So if you do want to look for any kind of short trades and buy the US dollar and some positive sentiment And there's your area to look for short trades looking for long trades for me I do like this area on a lower time frame that looks like a bit like a CPR zone for those of you who are in the room and are watching this in the private discord members And there's a bit of a CPR on this time frame Well, not in actually even on this time frame, but on a lower time frame will look a lot better And I have to go back and see a bit of detail, but that's beyond the scope of this one I'll talk to you guys about that in the private mentor room for a potential buy if you want to look to trade This currency pair me personally not really interested in it Moving on to the pound dollar so pound dollar we have Prices did come down into this one three six area and let's Get rid of that So nice demand zone again. We did have that extra Level of support and resistance within that area of Demand and access confluence one of the confluences we use Prices actually went to the upside For me my bias has kind of changed on the on the pound recently. I think the pound may start to Be a bit more dovish when it comes to central bank policy and Broadbent says Bank of England may be right to do nothing on Inflation so Bank of England deputy governor Ben Broadbent said policy makers may be right to overlook a surge in inflation now Arguing that many of the increases are likely to be temporary And if that is the case then that does sound a bit dovish meaning that the They're probably more of a wait-and-see approach And if they have a wait-and-see approach whereas the Fed maybe might be a bit more hawkish Then you could see more downsides in fact on the pound dollar So let's see what happens here. So the poverty business at the moment is to the downside fundamentally And also as well with the pound there is some Covid variant news, let me just find the article So here it is and the UK economy faces 3.6 billion dollar hit from Pingdemic CEBR says and the UK economy could face a loss of more than 4.6 billion pounds in just four weeks If rules on self isolation following a ping from the NHS app aren't relaxed According to data from Centre of Economics and Business Research So if you live in the UK, you'll understand that we have a NHS and National Health Service app that pings us whenever it thinks or It shows that we may have been in Contact with someone who has had Covid so there are problems with with transport with With food deliveries and other industries because workers are being pinged and having to self isolate And then there's really no one around to well There's not enough staff around to really kind of serve customers or take customers to you know on transport networks as You know train lines are down, etc. So At the moment, I think the pound is potentially looking to struggle in the in the short term at least if it does get out of hand So that adds to the narrative of potential shorting of the British pound against the dollar But if you are looking to buy then There is a nice area here to look for the 13670 to 135 60 area for looking for buy trades Euro-dollar, so Euro-dollar prices have come down into a nice fresh demand zone. Yeah, that's fresh demand zone For me the path of these resistance is to the downside Monarchy policy wise you have the ECB who Let me have a quick look here we go ECB Says gold must be at least 12 to 18 months 2% gold Sorry must be 12 to 18 months away before hike Villarroix says so European Central Bank new guidance on interest rates Means it won't consider increases and let projections show Inflation at 2% target within 12 to 18 months Frank Bank of France governor France's Villarroix de Galile said on Friday So Europe are actually behind when it comes to inflation and If they're behind it means that they're looking to probably hike rates on the back end or after lagging the you know the likes of the US and the Bank of Canada and New Zealand right so if they're gonna be you know Maybe a fifth sixth seventh bank potentially to start, you know potentially looking to hike rates if at all then That doesn't necessarily bear well for the for buying euros in the in the short term, right? so If the if the data doesn't support the narrative and you have you know Maybe you're more of a hawkish fed who are looking to hike rates Then really and truly any kind of pullbacks to these zones are gonna be really kind of sell opportunities because Dollar is pretty gonna appreciate right or sick property, but should appreciate With hike expectations and the euro should continue to potentially sell off So even if we do get a pullback personally on this pair would still see you know moves to the downside Provided that the data does support the narrative for the dollar, right? So the dollar as long as dollar comes out this week and you know GDP is is good Then brilliant. Also, we do have European GDP so that could also You know kind of stem the move to the downside because if GDP for the euro zone is really really good Then you've got you know to potentially Too positive sentiment Kind of clashing with each other and traders will generally then want to probably maybe limit the move to the downside Because you too have you have again to stronger currencies or potentially stronger currencies I do still think that the euro though is the weaker out of the two so for me Probably dollar shorts and again This is not necessarily for this week because no one can no one can predict the future This is just understanding the path of least resistance is to the downside by understanding the current data Moving on to the euro yen and euro yen did bounce off of this last Zone so again with risk-off sentiment. We saw it this week We did get a bit of a sell-off and then on the Monday and then on Tuesday Wednesday Thursday Friday Where we had a bit more risk on you're seeing prices move to the upside Again any kind of pullbacks will be I think I think down to these these this area here would be the best Area to look for any kind of demand zones And then you buy an opportunities from a sell trade opportunity This actually is a supply zone right here where we're in So if you do want to be a seller of the euro and buy the Japanese yen if there is risk off Then I think this is actually quite a nice area to look for short trades If the market sentiment on Monday opens up and we're in a bit of risk off. You really want to See I guess on the Sunday open the The Japanese markets sell off right if you start to see the Japanese markets Then is it the Nikai 225 if that starts to sell off and there's some risk sentiment Then it probably might continue throughout the morning in the European session And then that will be actually a decent trade to the downside, but let's see what happens with that moving on to the Aussie dollar and Aussie dollar Again with the Australian dollar being a bit more dovish More having a wait-and-see approach and the Fed I think being Being a bit more hawkish But also as well the fact that in a risk-off scenario the the dollar is Or can act as a risk off Currency where money will go into the US dollar and out of commodity currencies like the Australian dollar This is the reason why you saw this this sell-off right but in a risk on environment Yeah, commodity currencies should do decent So this was actually again a nice decent buying opportunity if you thought that the Australian dollar risk was coming back on decent a decent buy even though the US dollar isn't necessarily the best currency to buy the Australian dollar against for me zooming in Probably decent short I think here if you want to get short on the Australian dollar and buy the US dollar Any pullbacks into fresh areas of demand a decent buying opportunities, but the pair itself I'm not really too fond of moving on to the Aussie Yen Aussie yen again one of my one of my pairs that I look to trade and I Suck you just delete all that so we've got a nice the monsters that broke through there came down into this zone Higher highs higher lows as we note that that that that that right, so that's high high high low Again from a risk-off perspective on the Monday We did get that sell-off there, but then Tuesday Wednesday Thursday Friday more risk-on came in and we went to the upside Right, that's pretty much seeing the price action react to risk-on and risk-off I think this is going to be a really nice area to look for any kind of buying opportunities if if if if there is You know some risk-off sentiment, but we do come back on to a risk off I say risk on and this again is around that 80 cent round number I do like this for a potential long trade if we can come back into that zone If you're looking for any kind of sell trades you need prices to really kind of come back up to here to look for any Selling opportunities 82 50 area As that's where again lower highs and lower lows so low high low This has to be an absolute bargain for the Japanese yen Why because it may lower low and then that would be the area where you're looking for sell trades between there and there All right a low and a high It's called fair value right fair value So this has to be a bargain for the for the yen, but providing this is you know, we're in a risk-off environment But my my bias potentially is definitely to the long side and finally gold and gold really didn't do too much Last week when you consider the risk-off sentiment that came in on the Monday But again, I think that's probably due to potential dollar strength So with the US dollar Counteracting I guess gold and moving in the inverse directions the dollar being quite quite strong and again the Possibility of content potential rate hikes Should probably put a cap on gold at the moment But you could see again if the Fed disappoint or a dovish and GDP is Doesn't come out as expected As far as a negative GDP then you could this could be a really nice buying opportunity So if you're betting against the dollar then this is a really nice buying opportunity if not if the if the you know the Fed come out as is a bit more hawkish and GDP is generally positive. You're gonna see prices, you know continue going to the downside after this You know bit of a pullback to that area. You should see a continuation to the downside But let's see what happens This week probably a bit more volatility is the summer months, but but there's some big news coming out anyways guys That's it for this week. I hope you enjoyed it If you have any questions, just put them in the comment section below and I will answer the best ones and Yeah, take care have a great trading week and speak to you soon