 Hi, my name is Liam Rowe currency trader and trading coach at trading 180.com We're welcome to this week's supply and demand for us and gold fundamental and technical analysis If you're new or won't welcome to you and if you're returning an equally warm welcome to you And please don't forget to like subscribe and share the video with your fellow trading colleagues as it helps Support the channel and really promotes channel and there is a free way to get the information out there to those Traders that really need it and want to apply Fundamentals to technicals, right? And it's not necessarily diametrically opposed one or the other we're using the best of both Disciplines to make the best trading decisions so looking at the week ahead and if you go to trading economics comm you'll see this one of the One of the tabs If you go to the home page you'll see week ahead click on it and you'll get this page. So I'll go over the Guess the most the majority of this which is Pretty much next week. All eyes will be on the non-farm payroll report Which is expected to show the American economy created 250,000 jobs in July so the least since a decline in December of 2020 in a sign that hiring may be cooling down and In fact, I think the Federal Reserve in fact, I say I think but I know the Federal Reserve actually do want Unemployment yeah, the unemployment rate actually to increase because unemployment and employment actually has an effect there was a correlation between employment and Inflation so they need inflation in order for inflation to come down. They actually need Employment unemployment to go higher. So let's see if that happens, but unemployment rate is seen at stable at 3.6% and Remaining the lowest since February 2020 while wages Growth is set to slow down slightly and again that will hopefully help the banks You know inflation to come down and maybe reach their 2% target. I don't think they'll achieve it But let's see Traders will also keep a close iron appearance from several Federal Federal Reserve officials for further hints on the size of the Fed September rate hike and that's always important And then it talks about earnings I'm not really concerned about that. So other important economic data include S&P global PMI's ISM manufacturing and non manufacturing PMI's exports imports Challenger job job cuts construction spending jobs job openings and factory orders elsewhere in America It'll be interesting to follow Canada's PMI's trade balance and unemployment figures So in the UK the Bank of England's monetary policy committee will go ahead with another increase in Borrowing costs with markets split between a 25 basis points and a 50 basis point hike The consensus from what I've read is that They the Bank of England And the market expects the Bank of England to hike by 50 basis points So the Bank of England faces a difficult balance in acts like all central banks at the moment In the choice between how much monetary policy should be tightened in order to contain inflation rapidly approaching the two digits While preventing the downturn from becoming too steep because if they hike too aggressively Hiking interest rates can Make the economy contract because you're increasing borrowing and lending costs and it has an effect on business activity, which then has an effect on GDP right so consumer prices rose 9.4% year-on-year in July the most since 1992 on the economic data front Investors await final PMI's alongside the nationwide housing prices and Halifax house price index not really, you know bothered about that Elsewhere in Europe retail trade growth in the euro area likely slowed at the end of the second quarter particularly in Germany and Industrial production is seen falling in Germany France and Italy Meanwhile the eurozone unemployment rate is set to remain unchanged at a record level of 6.6% other data to follow include euro area production inflation and Germany balance of trade and factory orders Switzerland inflation data is coming out, which will be interesting consumer confidence in manufacturing PMI's and That's pretty much it's GBP miles from euro area Germany and France, okay, and then in China the spotlight will be on July PMI reading to assess to assess on the pace of the post-lockdown recovery of the manufacturing and services sectors and that's important really with risk sentiment if China is seen growing then What you will you know should see is I guess an avoidance of a global economic contraction and So yeah, we'll need if you're buying especially if you're buying commodity currencies like at the Australian dollar Canadian dollar or New Zealand dollar you really want to see the China economy grow and So with the current account for the second quarter also being released in a current account is basically whether the Country is in a surplus or a deficit trade balance So in Australia the focus will be on the central banks interest rate decision following a slightly softer increase in their headline inflation rate Last quarter which has strengthened bets for a 50 basis point hike and I think the They wanted a 75 basis point hike, but Because inflation came out a bit a bit lower than expected The bank would probably start to hike a 50 basis points and the neighbouring New Zealand The second quarter job data was expected to show a tightening of labour market with the jobless rate seen moving lower in a fresh All-time low of 3.1% and employment expected to rise by 0.4% so On the jobs data, I think around the world lots of good employment, but it adds to Inflation if you want inflation to come down, then you actually need employment and unemployment to go the other way So let's look at the technicals and some more fundamentals on the majors. So starting off on the dollar index in fact go to the dollar index and Yep, the dollar is obviously selling off and this is due to really disappointing data and there was a lot of Talk obviously about the you know being in a technical recession if you're on social media, which you know everyone else I say everyone else, but everyone is nowadays You'll you would have read that you know the US Has entered the you know into into a recession and is a technical recession now You know the the headlines though Although they mentioned a recession and what a technical recession is which is two negative quarters of of of growth I Did the banks and I don't think the the majority of the banks are seeing it that way and I'm gonna basically show you you know why and Because there are there is a Bureau I think it's called the National Bureau of Economic Research any BR That actually defines And calls whether the economy is in the recession in the US now You know you'll see for example the narrative that says the drum beat of a recession grew louder after the US economy shrank for a second straight quarter You know it doesn't say that you know the Language doesn't say that you know we're actually in a recession Say we but the US is in is in a recession. It just says the drum beat of a recession grew louder So, you know, you might be scratching your head, right as to the reasons why and in a report from Wells Fargo Special commentary which I was reading to the guys in the In the private members group and I said this on the day on just before in fact the The release of the data and basically I was saying that Even if the economy Does go into a technical recession and goes into negative growth What you should really be aware of is how the market takes it It's not about your opinions on what you know a recession is and yes We do know what a technical recession is But it's what's more important is what how the smart money interprets the data. That's the difference It's not about, you know, someone on on on YouTube or Twitter or TikTok, you know, trying to get you to sell the dollar You know, because in fact, it's really what the smart money are doing and how they're interpreting the data and Wells Fargo and I and I believe that a lot of Banks are looking at it in the same way you can read it in the language of If you go to, you know, Bloomberg, etc. And just not just Bloomberg, but other financial reports and Websites is It's basically they are waiting for the any BR the National Bureau So NBER sorry National Bureau of Economic Research, just to say To actually declare a recession So I'll read the summary for you guys and the summary is even if GDP posted this was basically this was reported just before the the The negative growth, right? So they're saying that even if the GDP posted back-to-back declines the economy is not yet in a recession Though we suspect it will be within six months. So because defining Some something as important as a recession is more than mere semantics This report impacts the right variables to watch and introduces a new at-a-glance tool to get the next recession call Right. So while everyone else, you know, when in the social media is running round like I had this chicken talking about Recession recession recession the smart money who have got, you know, deep pockets and who are placing bigger bets than all the retail traders Are doing something different, right? They're looking at different data so Thought Wells Fargo expect the economy expanded, right? So they were actually a bit a bit wrong on this but they said that But the data print on Thursday the growth rate could very well come in negative So they were aware that it could have come in negative and it did so two consecutive quarters of negative GDP growth is one working definition of a recession, but it's not the official one so the US Definitive sorry the definitive US recession call is up to the National Bureau of Economic Research Whose business cycle dating committee determines the start and end dates for each economic cycle So that's who determines whether You know the economy is in the recession or not the committee considers a recession to involve a significant decline in economic activity That is spread across the economy and lasts more than a few months Yeah, I mean quotations so the committee relies on six variables of monthly product a monthly activity when dating an economic cycle which fall into four primary categories which is production income employment and Spending or what we refer to as Pies ensure we do not think the economy is in a recession at present But if our forecasters correct This is not so much of a of a head fake as it is a harbinger of worse to come as we are forecasting the economy to enter a mild recession early next year, so and the report goes into you know their Their thoughts on obviously, you know what they refer to as pies. So Again, it's really about what the smart money think, you know smart money concepts are not You know anything you see technically smart money smart money are literally looking at the fundamentals and Resentment side of things. So with that being said going back to really the charts My bias in the short term would be obviously Probably look for some sort of dollar downside, but I think overall I do think the dollar is still a potential buy But it does depend on the data because the Federal Reserve is still looking to high crates They haven't taken taking rate hikes off the table. So I do think that the dollar Is a potential buy in the medium to long term? I think there are economies Again in the short term probably the euro and the pound are made fair better But it's only really because of the fact that the dollar isn't doing great on on short term sentiment But my you know focus is more on medium to long term Value and I do believe that the dollar is still a potential buyer to be buying opportunities Of course, you know, if you're looking at short-term trades, then you will be looking at, you know, short short trades So pullbacks into any supplier zones Of course, you're not really trading the dollar index But you're looking at Supplier zones on dollar crosses like the dollar yen or dollar Swiss if you want to take advantage of some dollar weakness But I would probably personally and again, it's not financial advice Just what I'm really doing and I'm looking for more Buying opportunities and just waiting and being patient because although again, like I said, the dollar is might be a bit weak in the short term Doesn't mean that everything else is faring a whole lot better and we'll get into into that as well. So Um, let's and also as well my view is backed up by A bank MUFG bank and again this bank analysis is some of the stuff that we look at as confluence With our trading into a trading 180. It's not just me making it, you know stuff up in my head You know, I always look for smart money to confirm my biases, right? And and so this is MUFG and They are a very big Bank I think a Japanese bank and they pretty much say the same thing. So I'll read this out as well So in in these circumstances, the US dollar has clearly lost some of its shine in recent weeks The pullback for the US yield intensive improvement in global Investor risk sentiment have both weighed on the US dollar alongside intensified US recession risk It leaves the dollar vulnerable to further near-term weakness, right? So near-term weakness However, we are still not convinced that the broad-based US dollar sell-off will be sustained Beyond the near term so near term can be anywhere between, you know a week to maybe two or three weeks, right? But it's not necessarily a reversal So the Fed's policy shift is not sufficiently dovish enough, which is which when combined with global Slowdown recession fears that are set to intensify further We believe the recent correction lower in the dollar is likely to prove temporary One exception is the dollar yen where we are more confident that the dollar could have already peaked against the yen which basically they're saying that it's putting more, you know Potential downside on the dollar yen then there is, you know, any other currency but Again, I think again a little summary here as well It says global growth fears to remain supportive for the dollar Fed policy pivot not yet sufficiently dovish more confident though on the dollar That the dollar yen has peaked so although we're seeing weakness in the dollar It's for me. It's not an outright sell I'm still looking to buy although again You know, you do what you want with with the information that I provide and the information that you do your research on, right? So I'm just looking for pullbacks into demand zones as confidence on the dollar index anyways Let's get on to the dollar yen. So dollar yen is coming down to actually a quite a nice fresh area of demand The 1 through 2 round number I do like that for a potential buy And there are some Some more zones just below that as well Which is decent Obviously, you know, there was no demand really at the one three fives So I do think this area it's one three two or just the one three one Fifty area towards the bottom of that demand zone is nice. You also have summer Pass support and resistance in that area. So looking for a potential buy trade in and around that one three one Well for pretty much from around now to the absolute lows I would say of that demand zone if it does present itself Moving on here. In fact, if you do want to be a buyer of the the yen Then you have some decent supply zones technically to look for some short trades As well. So you're looking for a pullback to come all the way up to Up to here before looking at getting short dollar Swiss dollar Swiss Yeah, I think that level is Right there if you're looking at that as a demand zone Level there is a demand zone. Then yeah, we get a bit of a pullback I'm not really looking to buy this currency pair simply because the Swiss Frank are also looking to high crates The Japanese yen and the Bank of Japan is still actually quite dovish on the On the on the Japanese yen So with the Federal Reserve still looking to hike I do think that the dollar yen is a is a is a is a buyer. Where is the dollar Swiss? I'm not so sure on where the value would possibly be I mean, I know technically but I just want to stay out of anything. That's not too clear So if you are to be a buyer of The dollar then that these two demand zones is where you're probably looking for any kind of buyer opportunities Looking for a sell trade meaning that you think that that the Swiss Frank is you know cheap or a bit of a bargain then the one There's sorry the zero point nine six area is where you're looking for short trades dollar CAD dollar CAD again with the Dollar not doing so well. You're seeing these demand zones not really holding up And we are making lower highs and lower lows. So You know, we've had you've got that supply zone there I'm nearest demand zone for the dollar if you're looking to buy it's gonna be all the way down at these lows here. So For now it's either that or if prices this week do suddenly, you know start to prove that there's demand Where we are currently and then a pullback into that that would be, you know, some decent demand potentially for the US dollar but Again, not really a pair that I'm I'm not interested in unless in fact Here's another thing to think about if you know risk sentiment does come back on And oil starts to obviously Increase there is demand out of the China starts to increase then commodity currencies like the Canadian dollar should do well And in fact if it does then you would see, you know further downside Looking at the New Zealand dollar US dollars are pretty much all currencies are At the moment with dollar weakness improving In a risk-off environment, you would expect the US dollar to continue to strengthen so we could see prices either start reversing from now and Really up into these 64 area But if there is risk on if we do have some risk going against some good news out of China Then you're starting to see now some demand zones take shape I'm not gonna hesitate to put anything there So if you do see any Pullbacks into this zone or into these zones then that is actually a decent Long trade for the for the New Zealand dollar. We might have seen a bit of a bomb in that New Zealand dollar Moving on to the dollar pound dollar and The pound dollar, you know is For me still a sell now It might not seem the best trade at the moment But I do think if prices I think the upside is is capped I do think the upside is capped the reason why one of the reasons why is because I Think the UK economy at some point is is you know It's quite bad as well in the UK probably already in a recession So former Bank of England rate set asses so Blanche flower urges Bank of England to refrain from further rate increases and The central bank set to deliver first half point raised since 1995 so the UK economy is probably tipped into a recession in the Bank of England should hold off from further rate Increases a former policymaker at the central bank said Danny Blanche flower Who served on the Bank of England's monetary policy committee from 2006 2009? Through the global financial crisis said the UK would probably follow other major economies into recession that and that Unemployment is a bigger threat So the UK in all likelihood is already in a recession Blanche flower said in an interview on BBC radio Fours today program on Thursday the right thing to do is to sit back and wait and watch as the global recession probably spreads so The UK did get in fact, you know some positive news on a month-for-month perspective When it comes to GDP but I think the data is is is Lagging a little bit. I say a little bit, but the data generally lags and even though that was a surprise There are a lot more risks when it comes to the UK higher inflation You've got Brexit, you know an energy costs as well, you know the cost of energy Rising rapidly as well So I do think that prices do start to come up to this supply zone here I'm still gonna be a buyer of the US dollar over the British pound But let's see what happens and there is Another supply zone just above here, which is actually quite decent as well So look at the supply there I do think that the one two four areas is going to be quite nice for a Cell if obviously, you know price Shows that it is right. So I'm not just gonna set pending orders or anything like that. It's just looking for you know lower timeframe candles and some other setups so looking at the Europe and Europe are diverging in the short term. I mean by diverging is that Where is it now? Where's my here we go? So it was charting the the global economy and so While the US, you know came out with some surprisingly, you know bad news, I guess the you know Europe Eurozone actually surprised to the upside so The major economies diverged in the most recent quarter Underscored by a second straight decline in US gross domestic product while Results in the Eurozone shocked to the upside. So That was You know a surprise Definitely in the short term So you would really expect Europe and the and the euro to increase in value, right? It should you should want to see prices, you know rise at least up to the 104 50s 105s But with that being said There is a lot of risk of Surrounding the euro and the euro fills the pressure just as everyone else is as Economy tips towards recession. So a single currency is hanging on just above dollar parity and one of the one of the Risk events I guess surrounding Europe is that the you know It's as much of the economic gloom is centred on the disruption of Russian energy Supplies to Europe which particularly threatens German Industry so credit sui sees a 50% chance of the euro region falling into a recession in the next six months and Goldman Sachs says It's it may be already in one, right? So there's a lot of you know smart money who are saying that Yes, the data has surprised to the upside, but we also have to remember that The data is lagging. So for example, we're in the third quarter, but we're getting second quarter data Right and in the fourth quarter, we end up getting third quarter data. So And that's what I mean by data lags, but But yeah, there's the you know, the currency it says that the currency has become a lightning rod for the mounting pessimism About the euro areas economy is falling more than 10% as it's just talking about what what's happened but um, yeah, so so basically It's the the gas crisis is really the the risk event that may Continue to Make the euro D-value so Europe energy prices keep soaring as Russia tight and supply, right? So there's that and not not getting on to gold just yet, but there are you know, there are a Lot of fears right around You know the gas Taps being turned off in Europe and then that would also not just affect Europe But also the UK who are you know dependent upon You know from a geographical perspective and location perspective are going to be more affected by You know these these energy hikes, right? So I do believe in the short term You may get you know pullback to some degree on the euro euro strengthening Do is a short-term dollar weakness, but I do think overall if you're getting to zoom in out, right always zoom out And not so necessarily, you know say that because the trend is down that prices You know should always continue to trend down or you know, they're likely to trend down But fundamentally I do think that you're a part in a better position So you're in a worse position even it even though in the short term It does seem a bit more positive For for Europe, but I do think that My bias is to the downside. So what does that mean technically you could make an argument for? Supplies own they're not the strongest supply in the world There is a potential set up Intra day around this one or two seven eight to one of three areas Intra day But if that does if that area literally just continues to go higher and I think I'm going to be a shorter From around this one or three fifties to one of four fifties and look for some short trades But also that does depend on some dollar dollar data as well the US economy data Moving on to the oh matter of fact before I move on to that in case you do want to be a buyer of the euro Then it's probably best to look for any kind of pullbacks into this demand zone here. So the one 005s Area before looking at getting Long and less prices do make higher highs and then you're looking for a pullback into a demand zone Which would probably start from around the 102s If they start to make higher highs Ozzie dollar so again Ozzie dollar Australian dollar actually doing quite decent. There are they are hiking rates, but again in a risk-off environment You would have to expect Dollar the US dollar to actually do better than the Australian dollar this will You know it's likely to turn around if again China starts to grow and you know the risk risk is off Sorry risk is becomes more on then off So but again, not really a pair that I'm looking to trade right now I do think if prices do pull back and we do get some you know really positive They are in you know global sentiment starts to shift positive and I do think that this area this 67 cent zone is going to be a very nice buy from an Australian dollar perspective Ozzie yen again, we've had a decent pullback on the daily We did get a bounce from last week was saying that last week that you know That was last week. I think it was Friday and we did get a move to the upside. Obviously, you know Prices didn't make higher highs unfortunately and With the RBA looking to high crates this week We could see prices actually come down to this zone here before moving to the upside So I do think that it's so here the one the the ninety one fifties is a decent zone to look for Buyers that haven't changed my bias on the Australian dollar So I'm looking for any kind of pullbacks to look for long trades Moving on to actually if you do want to get short on the and buy the Japanese yen then we're looking at a pullback to The 95 areas and looking for a short trade around there And finally gold so gold Obviously benefiting from dollar weakness and I said last week if you go back to last week's report and video I was saying that this is going to be a decent area to look for some long trades as smart money I've been literally buying on the way down getting cheaper and cheaper really trigger has been the The the dollar Surprising to the downside right so if you start to look at this level here. I still think that Really want because The reason why I didn't buy it by gold. I was looking for actually a better price just below that and Because I'm not really a fan of buying at levels that have been touched several times I'm really not it's because it's very obvious so When a level is very obvious like that I Tend not to you know buy like everybody else But what I will do As price starts to prove itself to the upside I think it is worth You know maybe trying to start to scale in Because I think that the upside for the dollar is capped Which means that the downside for gold should be capped right so any kind of pullbacks down to this zone here And even if it comes down into that zone now I think I'm gonna have to have a mic just thought to buy but I have a wider stop on gold And look for some upside because if there was a global recession, which it does look like You know this we're seeing it in the UK. We're seeing it in Europe and potentially in the US You know by the end of the year been to you know the beginning of next year then gold should be you know the the buy right as well as Interest rates not being hiked as much and in fact the interest rate hiking cycle come into an end So gold could stop to shine again But I do think any kind of pullbacks are gonna be decent buyers overall And that's really my bias if you're looking for a sell trade then pretty much you would have been caught on the wrong side of that and You're looking at having sell trades are gonna be at the 1810 area 1807 to 1814 is your first area to look for any kind of sell trades You've got quite a wide zone of supply, which is gonna come really up to the highs there But but that's pretty much it for now. So my bias is to buy gold any on on on pullbacks Anyways guys, that's it for this week again, don't forget to like subscribe and share and Take care and I'll speak to you Whenever I guess make another video take care guys. Have a great trading week