 Hi, my name is Leon Roe, Covetty Trader and Trading Coach at Trading180.com and welcome to this week's Supply and Demand for a Technical Analysis. If you're new, welcome and if you're returning, welcome back and I really do hope every week as you're following along with my Supply and Demand and you're finding it very, very useful in your trading setups and weekly analysis. So as usual, we have the charts and the pairs of timestamps in the description box below if you're watching this on YouTube. So starting off on the week ahead on TradingEconomics.com and we have the FOMC Minutes which will be keenly watched definitely alongside US inflation rate, definitely. It's definitely a key mover depending on obviously the data that comes out as inflation really kind of dictates monetary policy. So you've got factory orders, the preliminary estimate of Michigan's consumer sentiment and JOLT's job openings elsewhere, European Central Bank Monetary Policy Meeting, that's going to probably be an interesting one as well, UK monthly GDP, Industrial Output and Trade Balance, German Foreign Trade, China Trade Balance, that's going to be a big one as well. That will probably set the tone for risk off or risk on sentiment, inflation rate and producer prices. So big China news coming out, important China news, Japan and consumer morale. So that's all going on for this week and if you want to know about fundamental analysis and why and what really moves the market, fundamental sentiment analysis, I've got a free course, if you go to the link in the description box below and I'll basically show you how to read fundamentals, it's not what people think as far as just looking at the news and trying to trade the news, it's a lot more than that and I'll show you actually how to trade the news and also if you go to the fundamental analysis spreadsheet, click here, it takes you to a document Excel spreadsheet where you can see my bias for the currency pairs, so obviously being bullish on the dollar, which I have been for a very long time, neutral bearish on the euro and basically you can pick your directional bias from here but obviously I would like you to learn the fundamental analysis, don't just take my words for it. So moving on to the charts and we're going to start off every week as we always do on the Dow Jones dollar index and the dollar index from last week's analysis, we load new bars, we pretty much went higher, went lower and came back to pretty much where we started off during the week, the dollar did sell off a little bit I guess and this was probably before the news last week which was non-farm payrolls on Friday which is better than expected, the forecast was 172 but it came out as 196 but what's probably more important is average hourly earnings and again this is kind of ties into inflation, the Federal Reserve probably going to be looking to hold interest rates if they can't reach their 2% target so you know they've already said that they're pretty much taking hikes off the table so now potentially we are in the holding cycle so what is going to be the catalyst that drives the dollar higher or you know lower, I think the inflation this week, inflation report this week and what FOMC, the FOMC statement on I think it's the Wednesday will definitely be a driver of prices and if the inflation report does come out much weaker than expected, basically moving further away from the 2% inflation target you can probably expect a sell off so let's get into it and I've got the ATR on the bottom here and the ATR really is a measurement of recent volatility, not necessarily just recent but depending on the settings, an average of the past 14 periods of volatility and it's basically just a little side note but a lot of traders who do swing trade like myself probably looking at opportunities as maybe some stim pickings and it's really because of volatility, we need volatility for the market to move and if you're looking at basically for December from December January from the beginning of the year and the average pit movement and you'll see this not just on the dollar index but you see this on a lot of other currency pairs apart from really the pound as the pound that began through Brexit but you know things pairs like the euro dollar you know and Aussie dollar etc really had quite low volatility this year and it's just part of the market cycle you know depends on what events are going to drive the markets so we've got low volatility which pretty much means the market you know isn't really moving too much so if you're searching for trades you know I probably would advise don't necessarily go lower to try and lower timeframes to try and you know pick up trades because really we're in the business of you know picking the highest quality trades and they will set up it's just because of the lack of volatility they're taking a bit longer to set up rather than having you know a couple of trades a week you know we might have to you know have me have two one or maybe no trades in a week like last week I only took one trade so it is what it is we wait sit on our hands be patient and and see what happens remember it's about accomplishment not activity never confuse the two but anyways I can take off ATR as I've had a little chat about that so this week pretty much we haven't really moved we've got this supply zone here along with some diagonal resistance in this area and some horizontal resistance so we have touched this level you know once twice so potentially as we could get weaker the more times the level is touched we could see you know movement to the upside and if we do get confirmation from the Dow Jones dollar index to the upside then it's pretty much a buy on the other dollar crosses we see some selling off and you want to take advantage of maybe some dollar weakness then you'll be looking to short really from this area here which is a decent area then your first area to look for probably buy trades would be anywhere around this level here where you've got again horizontal support within this demand zone here as well you also have a bit of a bit but you've got some diagonal resistance I'm sorry supporting that area as well so you've got a bit of confluence right here at this level so if you do see price to do pullback and then 30 some bullish price action look for bullish price action on some other dollar crosses so now looking at the next pair which is the dollar yen dollar yen last week there was an opportunity to get short but again if you're fundamental trader like myself why would you have got short go to the you know the fundamental spreadsheet you know bullish on the dollar bearish on the yen why are we looking for sell trades supply I made a video about this and comment what the name of the video is cool but basically why certain you know supply and demand zones don't work out and fundamental analysis is one of the factors and we were never looking to really selling this even though it was at a supply zone fundamentals rule so we did have pretty much a move up and yeah so we did think it's pretty maybe one of the pairs that actually moved the most this week now looking at the dollar yen what we want to do is take off some supply zones so that one's not valid anymore that one's not valid but we do have level here for some demand and also level here for some demand so what you're looking at is if you're looking to buy the dollar it's a bit of a pullback that's the first area to look for a pullback preferably a bit lower would be around here I'm gonna delete this zone right there probably add support resistance within here so we've got value and we've got resistance support bit of support as well here so you've got a bit of confluence in there we're looking at some diagonal support resistance you've got a bit right here let's see if I can put something here yeah so you can you also got a bit of horizontal support in that area as well so you've got demand you've got some confluence around this area so if prices do pull back on a lower time frame I trade the four hour as long as you've got enough movement to the upside the price come down into this demand zone and it's worth the risk reward then decent trade to the upside again risk being on if risk is off the Japanese yen benefits and risk off sentiment so you may want to just when prices if prices do come down here is be aware of what the risk sentiment is and obviously with China you know when their their data releases will you know trade balance inflation rate and producer prices index we could get some risk potential risk off sentiment and if that's the case then yeah definitely look for Japanese buying and you look for the dollar index to be selling off at the same time moving on to the dollar Swiss and dollar Swiss again we've been making higher highs higher lows uh assuming a little bit yeah so in fact let's go back to what we did last week jumping ahead of myself so last week pretty much this is what happened so um looking at the chart the right we've got a bit of demand here right as we made higher highs higher lows so I've got another bit of hidden demand bit of demand right there as well so you've got a cluster of demand zones around here and how would we basically separate that big wide demand zone you're looking for again some horizontal support and resistance within that level so that looks like where other traders would be probably looking to get in but we probably want to see is prices got a bit higher than this bit of a pullback and then look for any kind of buy trades if not then lower down around this 9950 level and if you're looking for short trades on Swiss franc um as far as buying the Swiss franc uh then um taking advantage of maybe some sort of risk sentiment or dollar weakness then here's going to be the first zone and this is going to be your second area let's just move this level across now looking at the dollar CAD and the dollar CAD um this week it came down into this demand zone I really was looking for a buy trade on this I was telling some of the traders to look for a buy trade here unfortunately there was an entry but oil just wasn't selling off we were looking for some confirmation with oil oil didn't sell off um where it was so we didn't really get an entry even though prices did uh you know uh go higher which uh again there's no no big deal um but uh yeah I was I was uh really did want to get into this trade but unfortunately just didn't get the right entry if you did manage to get into this trade uh well done so far um a few pips to the upside we're in a bit of uh no man's land between this high and this low so um you could potentially be ranging so we've got low high and now we're just above potential fair value um now depending on if you want to get short then this is going to be a cheap in a bargain area to get short if you're looking to buy the Canadian dollar if you're looking to buy the US dollar then you'd be waiting for prices really to come down around here before looking at any uh any long trades I'm going to put an extra supply zone right in here right as we've made new low taking out that level there so prices do come up to here and you want to be a buyer of the Canadian dollar then that's your uh that's your entry right there now moving on to the New Zealand dollar US dollar and um we did get a bit of a reaction at this level but um the dollar being being the strongest out of the uh major currencies you know that's this level really didn't hold also it didn't help that the uh reserve bank of uh New Zealand are pretty dovish they did say in their statement that if they were you know the next movement of their interest rate you know um uh hike or cut was going to be actually a cut so they were quite dovish whether that happens or not you know they might just be talking down the New Zealand dollar you know to get it weaker as a weak currency is good for you know inflation and it makes them reach their inflation targets so um buying here wasn't necessarily the best you know idea um uh last week so uh we didn't expect really this price to hold from a um from a fundamental perspective as you can see prices really you know rolled over but this level is a decent level for a buy if you would like to buy the New Zealand dollar and take advantage of some potential US dollar weakness so at this you know 0.67 three level this level has touched once which is okay so uh you know potentially a decent buy let's go to the charts and uh clean it up a little bit so let's get rid of this here this here and that area here so we're pretty much at like I said a buy zone if you want to take advantage of some dollar potential dollar weakness if you're looking at buying the dollar and uh shorten this currency pair you'd be looking at anywhere pretty much within this area here probably around this round number if not the the higher end of this supply zone why this is what it would look like on the lower time frame chart so if you buy it if you're going to be buying a dollar shorten this currency pair uh the US dollar is a decent amount of risk reward to the downside depending on obviously your risk reward but the higher up the better and trade it down to the lows um so that's pretty much it for this week uh looking at the next is the pound dollar and uh pound is just not necessarily a buy from me at the moment with brexit and a lot of uncertainty um there was a bit of if you did manage to get in it did just about touch this I think this uh supply zone um if not maybe about a pip or two of it but um this would have been really the only opportunity to get short on this currency pair um I do expect this produce level to break um based off of you know some basically some risk off sentiment on the pound but it depends because the longer the UK stay in I think the the markets prefer that as there's a bit more certainty um but you have the European elections pretty much coming up immediately um within the next month or two so um that's may I don't know how that's really going to affect the the pound but um Europe are definitely going to be uh maybe the the pair or the currency to really try and trade to really get short as they're going to be a lot of uncertainty um but I personally wouldn't be buying the the pound um we're looking to short this pair um if if anything and uh if we look at the the actual charts again we'll be looking at probably pullbacks to any kind of uh supply zones right here um you've got the confidence again of some horizontal resistance uh probably around here you've also got some some confluence as well here so if that level doesn't work out then you've got this work out then you've got this higher level of supply with the confluence of um you know resistance in that area if you are looking to be a buyer probably right now would be your opportunity to buy if not then you'll be looking at um an area down towards here this 128 level 128 you know five level around here from a technical analysis perspective I do like this is a demand zone but just can't bring myself to buy British pounds uh next currency pair is the euro dollar and the euro dollar um saying last week that you'd probably feel looking to buy then wait for prices to really come down into here um but again the euro being weak dollar being the strongest I'm actually waiting for prices to kind of pull back into this supply zone if we do get a bit of a pullback that'd be the first area I'll be looking to get short so let's go to euro dollar I think there's really much to update here because again due to the ATR um say due to the ATR but low the low volatility and as reflected on the ATR really we didn't do anything you know this uh this week with regards to the amount of pips that moved what is that maybe something like uh 12 uh less than 100 really less than 100 pips in movement this week so um not much going on with the euro dollar again we're waiting for price to come up to here before looking at a short or if prices go lower then it's about a pull back into what would be created as a supply zone and then we'd look for short trades um so that's really the plan for the next week or coming weeks um nothing else really going on with that currency pair euro yen so last week we uh mean a little bit we did have some risk on sentiment right so there was definitely a buying opportunity right here as you can see prices did go higher um again the Japanese yen is not a beneficiary of risk on sentiment it gets weaker so uh looking at the charts uh pretty much within this demand zone so if you do get an opportunity to buy the euro just be careful that we have touched this level several times so uh you've probably been waiting for maybe a um a lower level before looking at um getting long if you're looking to get short and buy the Japanese yen you'd be waiting for prices really to come up to here before looking at any kind of short trades and in fact what i'm gonna do is i'm gonna um just kind of move this demand zone establish right there and then got another demand zone right there right so looking at any kind of pullback the first one would be there if you want to take advantage of the really kind of short-term trend if you're a day trader you know you're looking at a 30-minute chart this is what it looks like down into that demand zone right here is where you'd be looking at but i trade the uh the four hour i'd be looking at um if i was looking to buy this you know to buy the euro um then that'd be the first area to look for you know some sort of buy trade um but at the moment i'm pretty gonna steer clear of this this currency pair i'm not buying the euro um if anything i'll put it more inclined to buy the Japanese yen um in a risk-off environment if prices really come up to this area here or this zone here um so next currency pair is the Aussie dollar and the Aussie dollar um again you've got two you know strong currencies competing against each other and it shows you know with the uh with the fundamentals from last week we've had one two four five and it hasn't really hasn't moved anywhere you know i mean moved down moved up but um you know from a sideways movement perspective we haven't really done anything um again low volatility and what's again what makes you know um i guess price movement even even uh more uh slow is that you've got two competing currencies two strong currencies in my opinion so um you know zooming in when you've got a weak currency against a strong currency that's when you can expect a trending market if you get a two strong or two weak currencies or two competing currencies in in various strengths then you're going to get a sideways market and this is pretty much what we saw this week so um again really nothing to change you're looking at getting short here you know and buying the US dollar um if you are looking to get long you'd probably be waiting for prices to kind of dip down to this lower area here right this uh 0.7 round number it's where if i was looking to be a buyer of this currency pair that's where i would be if not you know what could happen is we could get you know higher highs right and then you'd be waiting for this area to be a demand zone right so if this makes a higher high then this creates demand zone it's the demand zone there but for now pretty much we'll just leave it as it is um and lastly we have the Australian dollar Japanese yen and again we did get a bit of risk off sentiment and the Australian dollar benefits from risk off sentiment so you can see it in his you know we've got pretty much prices moving higher um into this upper supply zone here um so uh if you are looking to trade the Japanese yen one of the other currencies that you can look at for risk sentiment is this you know currency pair um you know it's a great currency pair to look for any kind of a sentiment or you can also look for um you know other markets like gold or um you know the stock market so gold should really be going if risk is off then gold should be going higher if risk is on then gold should be going lower um but also with gold it depends on what you know the dollar is doing as well as the dollar moves inversely to to to gold um or gold moves inversely to the dollar um so the stock market is also another measure and also as well government treasury bonds but um from a you know risk on perspective what we saw this week risk was on prices went higher now it's just about understanding um what's going to basically be the catalyst that breaks even prices higher or if risk off sentiment comes into the market then you know this should drive prices lower what we do have though is some uh some more demand zones being made right here and also right here so what you'd be looking for is uh any pullbacks into these areas it is quite choppy and i can't really um see i guess if you just a bit wishy washy if you have to put you go down to the four hour to look for any kind of uh confidence i'd probably say immediately would be right here because from the daily doesn't look great but from something like the four hour you know you might want to look at maybe the lower zone around there before looking to get you know long on the australian dollar something like here before looking at that um i guess there is something here as well you could look at it like that as well so yeah all that level there so the 79 round number or the 76 and a half round number would be where you'd be looking for some buy trades on the australian dollar but again to make sure you've got some upside if you're buying around the 79 make sure your risk reward is okay and uh yeah that's it so um yeah hopefully you enjoyed the analysis and it sets you up for the week remember that fundamentals and sentiment are really what drives uh you know drive the markets as well as something i don't really get into which is um liquidity and stop hunting from the banks if you understand uh you know liquidity and fundamentals and risk sentiment you should be okay when it comes to you know your directional bias so um if you have any questions just email me at info at trading180.com or leave them in the comments in the section box below please don't forget to like subscribe and share um and also uh you know click on the notification button for any updates um hopefully this week i should be doing um a video another video um because i've been uh a bit busy over the past few weeks but um some educational videos or matter of fact maybe one of you guys can give me any ideas um on some educational videos that you would like to know a bit about you know supply and demand in the way that i trade and uh if i can i will try to accommodate so guys have a great trading week and until the next video take care