 Hi, my name is Leon Roe currency trader and trading coach at trading 180 comma. Welcome to this week's supply and demand Forex and gold fundamental and technical analysis if you're new a warm welcome to you And if you're returning an equally warm welcome to you and some of you may have been noticing I've been putting a few polls which will continue throughout the week as well Some fun polls as well as educational ones and I will give you some answers To some of the polls that I've been posting and one of them that I thought was really interesting in fact Recently among the many polls that I've been posting Was was this one and I've wanted to get and give the answer to this Whereas some of the other polls a bit more subjective and for example for some people It's like what's the least? What is the least important aspect of Forex trading quite interesting? That 39% of people Of the votes as she said her fundamental analysis is the least Important aspect for them of course a subject it is subjective It's for you not necessarily for everyone, but interesting trading psychology 25% That is a that is a shocker for me because for you know the least important for me If you haven't got trading psychology that how do you do? How can you really trade the other two? You know I mean so 25% of people actually think that That that is the least important anyways Again, that is subjective and if that's what you think brilliant But what isn't subjective is this question here, which is the more devalued Accuracy is the higher inflation goes typically I'm going to get into the weekly The weekly analysis, but I just wanted to go over this because there's no point in me going over the weekly analysis Analysis, right or you watching it if you don't really truly understand You know the lingo and really the relationship between things like interest rates inflation GDP, etc And what it really means So quickly the more the poll I put up 101 votes so far one day ago was the more devalued the currency is the higher the inflation goes typically and 81% did Said true and 19% said false and on this one. I'm happy to say that 81% is correct and here's the reason why for the 19% if you want to basically just actually have a look right is Inflation I know a lot of people get confused about what inflation actually means right so inflation is is prices As well as value, but inflation the higher inflation goes Yeah, is the more devalued the currency is yeah So when a currency or when a currency devalues for example, it gets weaker and weaker and depreciates Yeah, the heart the effect of that is higher inflation, right? So this is an example Here we've got the US dollar, right? So from April last year 2020 It was pretty much dollar index is a measure of dollar strength against Major other currencies other major currencies like the the euro the yen the pound for example, we saw that The dollar was depreciating right going down. Yeah, but what did we see? Within what happened to inflation right inflation, which is basically Devaluation the higher inflation goes. Yeah, although high the inflation reading Yeah, what it's telling you is that the currency is getting more and more devalued so you can see the correlation, right? Yeah you see Inflation go higher and higher so from last year April July Etc. Etc. Start going higher and higher is no, you know, there's no There's the correlation, right? So you're seeing weaker dollar depreciated dollar devalued dollar and The result of that is actually higher inflation. So the more devalued the currency goes the higher inflation goes There we go true. So well done to those of you who did get that correct and For those who didn't don't worry. It's a learning curve there's also going to be plenty more questions coming up to test your fundamental analysis and My opinion is how can you really call yourself a forex trader if you don't understand the fundamentals and what really drives currency prices and valuations anyways If you do want to learn more on the fundamental analysis as well I have tons of videos hours and hours and hours if there's got about the actual playlist Forex playlist for its fundamental playlist as well But this is really the video that you should probably start off with which is the forex fundamental analysis Trading course beginner and intermediate traders and I really go into depth as to the reasons why as well So with that being said, let's get into the weekly The week ahead fundamentally. So the US earning season kicks off Several large US banks report their second quarter results investors will also keep an eye on Fed chair So we always want to keep an eye on any kind of central bank Statements and reports because the central banks are the ones that are trying to Dictate and control I guess the the valuation of their currency to help support the the economy, right? So Fed chair pow semi annual reports of Congress on the data front consumer and producer Producer inflation retail sales and industrial production will provide an update on the economic recovery Elsewhere China GDP growth for second quarter. That's going to be important And I'll explain that a bit later as you get into the technicals and fundamentals UK CPI and jobless numbers and the Bank of Japan interest rate decision will also be in the spotlight So some some decent news Potentially for some market some market moves even though we are in the summer period and Typically we do have low volatility even though we didn't see it this week We did see some risk off come into the market and I'll explain that a bit Later also as well if you do want to take your trading to the next level and I'm really kind of Accelerate your your technical analysis by applying fundamental analysis my Mentoring group Fundamental when supplying the moment or a group closes in the next seven days it closes on the 18th of July So if you do are and are interested in in trying My way of trading because most traders do just do technical analysis But if you do want to use the full suite of tools So for example Understanding the fundamental analysis spreadsheet what currency pairs we want to really trade and choosing the best Currencies to trade with an identifier and whether a currency is going to trend or range or likely to trend or range Using fundamental analysis strength divergences convergences interest rates, etc. Right and also as well join the mentoring group Which I do hold zoom calls live zoom calls as well as mental you guys Then pretty much you have seven days to get involved in that after that I will be closed Same for the rest of the year. Maybe I might open up again Maybe in October So I think I'd be the last time if I do open up in October would be the last time this year as I like to keep The group small and focused. I'm not one of those People that is trying to get everybody in no, no, no, no because it doesn't benefit me It doesn't benefit you what benefits us both is if we get everybody on the same page So enrollment closes 18th of July and once that closes I may not open until maybe somewhere like October November so take the the chance and opportunity while you've got it and I look forward to working with you by the way as well. Quickly. Please. This is not a get-rich quick scheme This is gonna be a lot of hard work. This is not, you know silver bullet involved here It's gonna be a lot of hard work if you're not prepared to put in the hard work and understand Fundamental analysis along with technical analysis and trading psychology and don't waste your time Don't waste my time. Don't waste your money, right? Go with someone else, right? Who is selling you a Get-rich quick and with with with no hard worker type of dream. Anyways guys Let's get into the technicals and the fundamentals in depth and we start off on the doubt Jones dollar index or the dollar index and We just use this as confluence, right? We use this as confluence and understanding where you know dollar strength or weakness and what we've really had Over the past couple of weeks is a hawkish federal reserve hawkish meaning that they're looking to raise interest rates They want the currency to appreciate And the market is buying the rumor selling the fact now this week we did have some a bit of a bit of volatility and The markets are reconsidering the reflation trade. So markets have begun to re-evaluate how much Difference the pandemic has actually made to the prospects for sustained growth in the global economy. Yeah, so What tends to happen is is that there is demand for higher yielding currencies when there is Economic growth, right? So fears of rapidly rising inflation that dominated markets just a few weeks ago have been replaced by nervousness about growth now inflation again is is is Devaluation which is basically a natural part and a normal part of actually currency central banks have a mandate to achieve a 2% inflation Target, but where the nervousness is coming in is really about the growth of the global economy And I'll just read this next paragraph to give you an overall Synopsis of really what was happening in the concerns and why prices were kind of a bit all over the place on the Thursday and the Friday So investors have this week Reconsidered the so-called reflation trade and we've been we we in the group have been trading this reflation trade since last year October November time since the vaccine rollout started as some of the traders have done really well in the group buying I guess currencies that have benefited from From a global growth like for example, New Zealand dollar the Australian dollar The Canadian dollar the pound as well so the idea that robust economic recovery underpinned by Continuing easy money from the Federal Reserve and bumper fiscal stimulus with boost inflation and never had the force to Fed to raise rates faster than it had signaled right so raising rates is always positive a Combination of production bottlenecks the ongoing chip shortages holding back car manufacturing and the spread of more Infectious Delta variant has now reduced the optimism over Economic growth long-term US Treasury yields a reflection of inflation and Growth expectations have fallen as the bonds have sold off So again all roads lead to and I preach this over and over again inflation interest rates and GDP right GDP economic growth and inflation which then the central bank can Dictate monetary policy where we're going to be hiking holding or cutting rates, right? so There are fears potentially going on in the market and that's what really happened this week, which is the reason why you saw a lot of Potential settle fund. I think it was Thursday and then Friday the fears might have been actually a bit exaggerated But going forward I think the dollar may want to Bring is probably still a buy against certain currencies not necessarily against all currencies But for me, I think the dollar is probably still a bit of a buyer It may start to pull back into that demand zone and if we if it does come down into that demand zone And you want to be a buyer then look for obviously buy trades against dollar pairs like for example the dollar yen dollar Swiss You could look towards the dollar CAD I wouldn't probably look towards dollar CAD But as long as as well there is risk on Involved in the market really kind of still believes in the reflation trade if there are really kind of global concerns and the data Doesn't support the narrative meaning that if the economy isn't growing if China for example really Starting to struggle then you could see some risk off sentiment in a risk-offs environment in fact the Japanese yen and the Swiss Frank will do pretty well even though In some aspects they really shouldn't but I do think that the those those currencies will do well when it comes to the dollar though I'm still slightly more bullish on the dollar. I'm not necessarily my favorite trade to take but There is An opportunity here to still get along on the dollar as long as the data supports the narrative if you do want to Try for a short trade. So obviously you're looking for confluences within this supply zone And then going down to or going on to the other forex pairs to look for a potential short trade as well Moving on to the dollar yen and dollar yen again prices came down into this demand zone In fact, he broke through these two demand zones and now I will say this as well There's no technical analysis level. That's gonna stand in the way of fundamental Right and risk sentiment analysis, which is Roro risk on risk off, right? Roro. This is what? Financial institutions and central banks really base there. They're buying and selling bias on for the medium to long term and If there's risk off right in the environment the Japanese yen tends to do well There was risk off in in on on the Wednesday and the Thursday coming into the market And it kind of been building actually a bit previously before that and this is what you saw a bit of a sell-off But again fears there could be market over reaction If you think the market has overreacted a little bit then this was an absolute nice buying opportunity in order to get Involved in that if you miss this don't worry wait for proof something I talk about which is proof of value right meaning that you want the market to prove that there's demand there and If prices ever come back to this zone here, then you want to get long That's fine. It doesn't necessarily have to pick you out You'd have to always pick the lows and the highs you can wait for proof of value to work to occur and Then look for a potential buy if we do if prices do come down here And we're in a risk for example on environment, but prices did react off of this nice demand zone This is really the origin if you do higher highs higher lows that move to the upside Brilliant and then prices come back down to here and we see but if again risk off Persists in the market and as worries you probably will start to see something like that happen We do have supply which is up here So again if prices do come up to this zone here, and then we do get some sort of again risk sentiment Changes to risk more risk off. This is going to look like a very very good trade I do like this technically for a short trade if there is some risk of sentiment Moving on to the dollar Swiss and dollar Swiss against very very similar to the dollar yen When it comes to Risk sentiment, so we've got recent supply I would probably drag that up there and If we're getting more of a risk off environment, then you will see prices start to sell off But I do think this is a this is a nice buying opportunity potentially again data has to support the narrative The dollar has to really start to prove that the Federal Reserve want to hide crates and if But if every time maybe some data comes out and it's not great for the dollar Then you will see prices start to come to the downside But this is an opportunity where if the data supports the narrative This is a nice buying opportunity to the upside At the at the lows of this demand zone if not then the next one is going to be here again If you do think that risk off sentiment is coming into the market Then any kind of pullbacks into a supply zone will be a really decent zone to look for any kind of short trades But as well you always have to ask yourself why the Swiss Frank is a bargain against the the dollar The Swiss Frank and the Swiss National Bank are way behind the curve when it comes to hiking rates So what I say to the guys in the group is that risk off right risk off? Yeah can push prices to where we want to be buyers right because once we go back into risk on mode again This is gonna if prices do come down into this 89 cent area 90 cent area It's gonna look like an absolute bargain price for the dollar So we could see some some decent upside potential in a second half of the year Moving on to the dollar CAD and dollar CAD Canadian dollar is one of my one of my buys it's been one of my buys for for pretty much over six months and we did come up into the this short trade here the supply zone and We did some of the guys in the group Saw this on the Friday where the Canadian labor market bounces back strongly after lockdown so the economy creates 230,000 jobs unemployment rate falls to 7.8 report comes ahead of the expected Bank of Canada bond tapers So Canada jobs market wore back to life after To sorry law back to life faster than expected in June Reversing the bulk of employment losses from country-wide lockdowns early this year the economy added 230,700 jobs Positioned last month statistic Canada said Friday in Ottawa versus economists expectations for an increase of 175,000 so pretty much, you know really kind of beat expectations for now This is just the latest piece of evidence that the Canadian economy is Rebounding from the third wave leaving few if any obstacles to another taper and taper is always positive Because it's reducing the amount of support the Bank of Canada have to provide Which is positive for a currency Benjamin reed says Canada rate strategist at BMO capital markets Toronto wrote in a report unemployment rate fell from 7.8 to 8 Set fell to 7.8 from 8.2. So that is really positive news for the Canadian dollar. So if that being said You know that it's it's all about who's leading the global recovery and so I know there was some Traders in the group that got short in and around this area here so Hopefully if you see a divergence between the dollar maybe not so good news or the Canadian dollar cad and Maybe there's some a bit of maybe some negative news against the dollar Then that's a nice divergence and then you should see prices Continue going to the downside what we do have though is there is some demand here Potentially so if you are in any kind of short trades potentially taking profit in and around this area Will be or some profit anyway, maybe maybe prudent as well But so if you do want to get long then this is going to be the area the one two three fifty I'll just below that and the one two four and I'm going to actually drag this up Here Yeah, so that's where the supply zone is and Yeah, this was a nice trade if prices do come back up to this zone here and you want to get short that would be Decent as well looking at the New Zealand dollar US dollar and the New Zealand dollar Again one of my buyers currency that I'm looking to buy not necessarily against the US dollar though But we do have some supply and demand in here We did react this week so we had this demand zone which again proof of value prices came back down Prices all get all the way back up here There was lots of demand and then we got a bit of a shift in risk sentiment this week and then we've also now got Prices potentially buying so there is a bit of a range here between this high and this low You can see it right there to there So there's a greed acceptance between buyers and sellers at the moment and where we are fair value I would probably say if I was looking for any kind of long trade and the guys know You're taking the course about stop hunts. I want to say probably a stop hunt below that if I was looking to take that And then look for a long trade But for me if I'm looking to buy one of these two It would be the New Zealand dollar in a risk on environment in a risk-off environment The the US dollar would be the one to buy so you could see if risk-off does come in You could see prices start to still continue to the downside, but if you are looking to get long on the US dollar, then I would probably say Probably looking at something like the top end of this demand zone Sorry this supply zone, I should say top end of that Right into this zone So about a 71 round number before looking at short trades or just above that for a short trade So the 71 50 area or between the 70 0.7126 and there's 0.716 Area for look for short trades if you're looking to buy the US dollar but right now I would probably in the risk-off environment look for any kind of New Zealand dollar trades, but again, not getting speed at the US dollar not for me Anyway moving on to the pound dollar and the pound benefiting From again a little bit of a dollar weakness There are some several bank forecasts that are forecasting, you know 142s within the third quarter Which we also do look at we always have the confluence of bank forecasts along with our fundamental analysis and Again, we did see prices react off of this demand zone here from a UK Perspective fundamentally we did have the UK economy records modest made growth despite re-opening So the UK GDP rebounded only slightly in May This falls in manufacturing retail and construction helped to offset the reopening rebound in consumer services Rising COVID-19 cases pose a challenge for the recovery over the summer But the medium-term story still looks fairly solid So still looks fairly solid even though there are challenges challenges everywhere really It's not just the UK. It's all over the globe with this Delta variant One of the power costs I wanted to highlight was nevertheless We still expect and we being in ING expect The UK to record approximately 5% growth through the second quarter But the outlook for the current third quarter is becoming trickier to predict COVID-19 cases are rising Albeit the growth rate may finally be showing some tentatively Tentatively signs of slowing and while the link with hospitalizations has weakened With the vaccines that is growing concern about the number of people needing to self-isolate so there are concerns unfortunately and if this narrative of the The COVID Delta variant spreading and and kind of Hampering the the the growth then potentially I think again money is probably going to be flowing into safe haven currencies so Where we are it's a bit of a difficult one with the British pound fundamentally And when we find ourselves in situations like this where you're not really too sure The question that the answer really is not to trade the currency pair, right? We always want to trade currency pairs where it is clear what is going on If it's not clear meaning that you're not too sure whether you should be buying or selling a currency based on fundamental analysis Then just don't trade the pair, right? There's not it's not every time you not every single pair You've got a trade and don't ever be married to a pair if the fundamentals don't match, right? if the fundamentals aren't clear but Technically if you are looking to be a buyer then I would probably say looking for any kind of pullbacks into this deeper zone It's one to be seven round number before looking at long trades looking at short trades. I do like this. It's a nice Supply zone fresh area of supply For a short trade if you want to be a buyer of the dollar against the British pound if you think the British pound is a bit We could then the dollar. I think they're probably in the bit of the same boat at the moment Moving on to the euro dollar euro dollar. So the euro It's probably looking at a bit of a pullback technically so I think we do have hidden dumps sorry supply there Need lower highs and lower lows zoom in so we had lower high low There and then lower low there so pull back into this zone And actually is actually quite nice for a potential short if you believe that the dollar is going to get stronger and I would still Personally have my bias still if I'm trading any one of these it would be for a short on the euro dollar one of the articles I have is ECB more cautious than the Fed on inflation overshoot in new target so one of the Analysts that we look at and Bloomberg as well from Carsten Breski from ING Notices that the difference between two central banks is important right so the difference that there's divergence Right is there's always when we're trading currencies You have to know the difference between two currencies that you're trading against the currency pair. Yeah And the difference is what gives us our fundamental bias if one is lagging behind the other or One is leading the other one is hiking rates one is cutting rates Then you can understand is there's a divergence there or a convergence and that's what you are looking to trade as an opportunity There's a value opportunity there Yeah, so the difference between two central bank policies I guess is important says Carsten Breski an economist at ING in Frankfurt You'll get more extreme monetary policy in the US and while the changes to the inflation target implies That even longer period of loose policy for the ECB officials also said that it will pay greater attention To the cost of owner occupied housing which isn't Which which currently isn't reflected in the official inflation numbers Bloomberg economists estimate that this could add about 0.1 0.2 percentage points to inflation neutralizing the change Sorry to the wording now The the set the European Central Bank are a bit more dovish whereas you're seeing here that the the Fed inflation target at 2% is way above that the European Central Bank is slightly Below it and what they're looking at is basically Overshooting meaning that they want the economy to be able to support any kind of interest rate hikes before they hike rates So they need to see in fact they need to see the the economy right GDP start to Improve before they start to think about hiking rates. So again, the data has to support the narrative. It really does So so let's see what happens But at the moment, I think the Federal Reserve are ahead of the European Central Bank I think I know and When it comes to potentially the hiking rates or the rumor anyway, so with that rumor Yeah, if that rumor is still persistent Yeah, and the European Central Bank are lagging the path of least resistance in my opinion is to the down side Sorry to the downside again. This is not financial advice. So if you're thinking you're considering the same thing Then your first opportunity to potentially shorts this week would be at this 18 60 level between this 18 well, basically 19 round number and 1.18 63 and if that if prices, you know, there is no basically demand for the dollar there then We look for any kind of short trades in and around this zone right here, which I think is actually quite a nice zone Let me just add some little bit of confluence that we look at which is support and resistance You can really see that there is some support and resistance in and around this zone as well That level has been traded Yeah, that level definitely has been traded in the past So I think this 1.19 zone will be really nice for a potential short if you're looking to short the euro dollar And you think the dollar is is is will be a bargain up here against the euro If you are looking to buy the euro though, there is a bit of demand here not the strongest area of demand Yeah, I'd probably wait for maybe lower end of Of here before or the 1750 1700s before looking at any kind of long trades Euro yen euro yen Euro yen is bounced off of this This demands over here and again in a risk-off environment The yen is really the one to buy could it be temporary possibly if it if it persists then you're probably going to see more Downside so you're looking for potential Supply zones if you can get it So if prices do pull back up here, and then you're starting to see Confluences for risk-off and that is going to be a really nice zone to the to the short side any kind of long trades I'm not necessarily a buyer of the euro not against sweet The the yen more against the Swiss Frank I'm more keen on but if you are looking to get long then I would probably save that zone there But the I think lower zone the one to nine area In this zone here would be probably a better buy potentially moving on to the Aussie dollar Aussie dollar again reacted off of this really nice demand zone which had some support resistance confluence, so Really nice technically there, but again in a risk-on environment. We should see prices go to the upside the Australian dollar Monetary policy wise is I think that the dollar in fact the US dollar was actually ahead of the Australian dollar but there was rumors this week that the the the Reserve Bank of Australia were slightly more hawkish. So let's see what happens With this and if they are then pretty much you should see Prices go to the upside if the there is a bit of risk-off sentiment Then you probably will continue to see The Australian dollars sell off because the Australian dollar really doesn't do well in a risk-off environment Moving on to the Aussie yen Aussie yen, and this is again one of the pairs I'm looking to also looking to trade We've got a breakthrough that large demand zone for now I'm not going to put any kind of demand zone on this. I will put some supply though. We've got supply in the round net so risk-off this week, you know cause prices to Go to the downside as traders potentially. We're just coming out of the Australian dollar It's everybody going into the yen, but maybe just taking profit on the Australian dollar But if they were going into the Japanese yen, then this is basically what you're seeing for me though, I'm long and What this does and what risk-off does again is it basically pushes prices to where I want to be a buyer if prices Do continue to go to the upside and it proves There is value at this area prove that there was value here And this becomes more and more of a bargain as prices go to the upside. I want to be a buyer overall Right prices come down to that demand zone. That's where I'm looking to be a buyer if not, then 81 level 80 93 to 80 64 areas where I'm looking for long trades personally again I'll financial advice if you are looking for any kind of short trades due to risk off Then this area here really is the first area to look for Any kind of sell trades currently and finally we've got gold so gold again benefits from a risk from risk off sentiment and Gold we did have gold poised for Third weekly advance on recovery headwinds gold headed for a third weekly advance as fears that Coronavirus variants may endanger the economic recovery spurred Investors demand for havens bullion is winning back investors after a bleak June helped by a sharp decline in treasury yields which burnished in So burn is the appeal of the non-interest Bearing metals so renewed virus fears of browned the world have taken the edge off the so-called Reflation trade we spoke about earlier causing global stocks to slump on Thursday, but on Friday These stocks were back to new highs. So let's see what happens there So bullion held gains even though US bond yields and equities rebounded on Friday They sure did the risk to the recovery were underscored this week by the Federal Reserve Minutes that highlighted continued uncertainties China Central Bank cut the most the most sorry China Central Bank cut the amount of cash most Banks hold in reserve a move that went further than many economists expected and suggested Growing concerns about global about these are economic recoveries or the the economies recovery So again, there are fears right there are fears. It's it's risk-on and risk-off isn't a light switch It's varying degrees and so there are fears there. So If the fears continue you can expect, you know Really gold to start to probably drift a lot higher and especially if if like I said if if there is bad news for the For the dollar as the as a dollar a weaker dollar and the depreciating dollar will support also support gold buying This needs to make a higher high before there is any kind of demand there So what you would need to do is really wait for any kind of pull back into the 1772 level before looking at any kind of long trades if you're looking for supply and looking for a short trade Really, they only places prices come up here or if prices make new lows And then you're looking for a pullback into that supply zone there before looking at getting short so This brings us to the end of the video. Hope you guys Enjoyed it as well. Thank you to all of those who are participating in the in the actual Polls as well and the latest poll at the moment is if a currency is headed towards deflation What does this mean for the value of the currency so 14 votes so far? I haven't refreshed this page, but Well worth answering and if you can understand this you can understand really where central banks and what central banks are doing in certain environments what other, you know Financial institutions are going to be thinking and what they're going to be buying and selling when it comes to Valuations of currencies so I'll continue to ask these questions throughout the week try and get your brains ticking and Yeah, if any if you've got any suggestions, then please let me know if it's good I might include it in the polls. Anyways guys. Take care. Have a great week and speak to you soon