 Hi, my name is Leon Rowe currency trader and trading coach at trading 180 comm welcome to this week's applying demand forex and gold fundamental and technical Analysis if you're a new watcher to the channel will warm welcome to you And if you are returning a weekly warm welcome to you and please don't forget to like subscribe and share Press that like button if you like the analysis if you find the analysis I provide every week useful and And yeah, let's get into I guess the the week ahead from fundamental perspective the some news announcements and Go into trading economics.com in case you don't know about this site. It's is a treasure trove of information One of the things I like to look at is the week ahead so Coming up in the US the FOMC minutes personal consumption expenditure and Fed chair announcement Will take the spotlight in the short-end so it's shortened Thanksgiving week quite as a happy Thanksgiving to all those who were celebrating Thanksgiving So FOMC minutes is going to be quite important flash PMI's been November will provide an update on the health of several Economies including the US Japan and the Euro area Germany and the UK So lots of potential market moving news investors will also keep an eye a close eye on the Coronavirus numbers as new lockdowns and restrictions were announced in Europe and we'll get into that when we get to the euro dollar so potentially a busy week as we head towards the end of November right and Let's get into now the the technicals and a bit more fundamental analysis So starting off as we always do on the DXY. Sorry. I started from the pound dollar, but DXY Is what we need to start off on and The dollar index is really just a measure of dollar strength against a basket of currencies like the The pound the Euro the yen, etc. We keep an eye on the dollar index the DXY Just because we need to understand really kind of where dollar strength or weakness is potentially coming in and At the moment if we you know kind of go back at least maybe five years On the weekly chart we've got really nothing to the left of us in terms of you know any kind of You know major supply zone, right? so at the moment I was saying that this was really the path at least resistance was to the upside and You know, that's pretty much continued Right, so what we're looking at ultimately is you know pullbacks to any kind of major demand zone That would be one and then looking for that as confidence with any kind of dollar By trades from a technical analysis perspective, but looking at the fundamentals on the dollar JP Morgan economists now predicts Fed to raise rates in September. So Economists led by Michael Ferrole had seen the Fed on hold in 2022 But now feds full employment goal to be met mid 2022 says JP Morgan So why is that important if you're if the if the expectation is for the Federal Reserve to hike rates To the rates to rise then that should appreciate a currency So in in the medium to long term, right? So again just the First-hand paragraph of this is a JP Morgan Chase and Co Economists said that they now expect the US Federal Reserve to raise rates next September becoming the latest on Wall Street Jettison of forecast for the central bank to stay on hold through 2022 So in a new outlook published to clients late Wednesday to JP Morgan's This is up-to-date JP Morgan's US economy US economists led by Michael Ferrole said that by the middle of next year The central bank's goal of full employment will be satisfied. So that's obviously a forecast It's not saying stone, but that's what the JP Morgan one of the biggest banks in the world are Positioning themselves to do right so ultimately You know not just them many other banks going to be taking note and doing their analysis as well And so, you know the dollar for me ultimately is still a buy so any pullbacks on the dollar index And then we get maybe some bullish price action or for me. Anyway, it's not financial advice I'll be looking at that as some sort of confluence to buy for example the dollar yen dollar Swiss Trades, that's my direction. So it's long trades I'm not looking at supply at all looking at shorting the dollar unless obviously something changes fundamentally or from a risk sentiment perspective But oh overall my bias is to a long dollar and we've been long dollar Pretty much from for at least a second half of this year when the Federal Reserve kind of announced that they were hiking rates back in June so again, we've seen the Market make higher highs higher lows the moment buying the dollar right now isn't for me anyway on Isn't the greatest. I really want a bit of a pullback to come in and then look for buying opportunities around this 95 area Moving on to the dollar yen and the dollar yen again. We've had a bit of a pullback in fact into this demand zone We were saying this last week that you know prices are probably go higher which they did Kind of broke this supply zone here and again, just in case you're new You really have to understand that technical analysis doesn't you know carry any weight in in in regards to Where prices may go meaning that if if the fundamentally you want to be a buyer right of a currency Sometimes there's no supply zone that is going to stand in the way of that buying right Traders are just looking for value and and and where you know Assessing the current value of a currency and where they think it's going to go in the next three to six months And so that's the reason why you get you know supply zones for example that don't work right when you get a supply zone that You know breaks kind of breaks through or a demand zone for example if the if the other way was to be true selling for example or a decline in value of that currency so As long as you can pick your direction based off of fundamentals and risk sentiment Then you should be alright just wait for pullbacks to that you know to these zones potentially and again No one knows which zone is going to work But ultimately you should want to prices should want to turn around at some point right And continue going higher. So is that a bargain? Yes or no if it is then brilliant And your trade works out if it's not then just wait for a bit a bit deeper of a pullback and look for a Even better bargain, right? We know this was a bargain Why because it made higher highs and higher lows. Yeah, this is definitely seen as a bargain price So is will price if prices do come back to us back down to this one 13 area Does that is that where you want to be a buyer and me? I do so and for other technical reasons as well I want to be a buyer the Japanese yen at the moment is in a risk-off environment does strengthen But I think all the four pretty much a lot of forecasts are pretty much to the upside Bank forecast are looking at a higher Dollar yen exchange rates. So let's see what happens. Also the dollar does Tend to typically do well and can do well in a risk-off environment also So let's see what what happens with all cylinders firing from a monetary policy perspective on the dollar Again for me, it's looking at short trades from a long trade perspective again zooming out There's really nothing We've kind of got this this Supply zone I guess on the weekly timeframe from 2018 but again for me It's not really something that I would kind of look into from a technical analysis perspective When looking at any kind of supply and again, you want to you want to determine the reason why you want to get short, right? If if you're trying to get short based off a technical analysis Then be my guest, but that's not a good enough reason for me to commit capital and risk what I'm risking based off of just Technical analysis, but yeah to the upside is where my bias is Dollar Swiss again as I was saying You know last week we did have a potential, you know short trade of that supply zone But why would you want to get short here when really the power for these resistance is to the upside the Swiss Frank? The Swiss National Bank is lagging way behind in monetary policy And this is the reason why you know, you just can't just short at any supply or go long at any demand zone You must understand the fundamentals and fundamental analysis and monetary policy and and the like so Again take out demand takes out that supply for me now This is actually hidden demand right there. So price does pull back into this zone Into this 92 area I think that's really going to be a nice zone for me to get look for any kind of long trade So pull back that's going to be like a decent bargain and then for me long trades zooming out a bit more Is there you know a reason why you should possibly short here again potentially from a risk-off perspective? You know the Swiss Frank can strengthen but against the dollar I'm not really too convinced on that one, but let's see what happens this week But I'm looking for pullbacks. Anyway, if prices do go higher make higher highs Then it's okay. I was way for a pullback into that demand zone. So that's really how I'm looking at this So again, my overall direction is long. So we're looking for long trades Moving on to the dollar CAD Dollar CAD one second All right dollar CAD again You've got two central banks that are looking to high crates at some point And so this trade is a bit more of a difficult one. I was saying last week I'm not really interested in this currency pair I prefer pairs where you've got a clearer divergence between monetary policy But there is an opportunity of course technically To get short here if you want to for me, I'm not really too I'm not really trading this currency pair It's a bit harder to read So if you do want to get short now is a is a short trade If you want to get long then the first demand zone will be, you know, your buyer But for me not really keen on this currency pair, like I said It doesn't really interest me but technically I think those are some really nice zones moving on to the pound dollar pound dollar This trade idea for me now I think I do overall think that the dollar should want to strengthen over the pound But there are some pros and cons for buying the pound a bit of conflicting fundamental information and one of them is for example interest rates so Bloomberg reports that markets look into February or look to February for the next turning point in Bank of England Rate bets at the Bank of England signal to 0.5 0.5 percent is key threshold for bond buying plans traders bet Bank rate will be below that level in three months But traders are with traders wagering that a Bank of England rate hike in December is nearly a done deal They're turning their attention to February. So the big question for traders is whether the monetary policy committee raises borrowing costs to 0.5, you know and That is really the question are they going to be you know hiking rates from zero point one percent to zero point five percent by by February now There's also some conflicting information from Bank of England's Hugh Peele who cast out on the December rate hike Right, so chief economist notes uncertainties around a strength of recovery and investors anticipate a rate hike next month is almost certain But the Bank of England chief economist Hugh Peele cast out on the certainty of interest rate Increase in December noting the decision could would be definitely also be finally balanced and pointing out bumps in the economic recovery speaking An event in Bristol pills said there is no quick fix to bring inflation back to the two percent target and that the central bank Doesn't have the tools to fix supply chains that were upended by Brexit and the pandemic So what he's kind of referring to is even though inflation is is is high It's it's basically the inflation is being driven by supply chains So what happens when a supply chain gets fixed and it will you know, hopefully eventually get fixed and invent an inflation starts to come down That would basically mean that if they high crates it might have hiked rates a bit too soon, right? But the point being in this whole situation between, you know, the Bank of England's Economist chief economist and also what the market's thinking is that There's some obviously come some conflicting signals there. So whether they're gonna high crates or not and and so for me the pound is a bit of a Difficult one to read and when currencies are a bit difficult the best thing to do is just to stay out right just to stay out Yeah, and and don't trade don't take the trade. So for me I think there are there are better trades to take Then the pound dollar although I do overall probably my best guess would be for a continued lower highs and lower lows But simply because I think the dollar Is on is on the path of recovery a bit sooner so even though the the Bank of England are hiking rates sooner, I think the The UK economy isn't necessarily doing it's fantastic You might be stagnating even though there was some actually positive data recently around jobs But let's see what happens For me anyways from a technical analysis perspective if you do want to be a buyer I think now is probably the time to look for that buying opportunity potentially on that dip If you're looking for a sell trade, I'll probably say the higher end of this Demand zone through the supply zone here. I think where it has that kind of support and resistance Confluence and any kind of pullbacks into that area that that is 1.36 would be a decent area to look for potential short trades Moving on to the euro dollar Euro dollar for me is still a continued sale. We've been selling this Currency and I'll buy us anyway for for all for a while and Just really waiting for some sort of pullback and in fact if I zoom in a little bit. There is actually a Hidden demand sorry hidden supply right there. Yep hidden supply in that area. So that actually creates a nice zone potentially for any pullback that That would be nice between that 1.145 Number if prices can come up to there And I think I might look for a potential short obviously I've got to look for other confluences within that area and if there are none then it doesn't make the trade the best trade in the world but I Think that area is still a bit interesting. Let's see what happens ultimately the best zone I think is going to be if prices can come up to this 115 Or 116 in area. I think that's going to be a very nice area That's my preferred area to look for any shorts But who knows for prices to move kind of from the 12 112s to the 116s would mean that we have to move 400 pips and I don't can't see that happening You know, we've been a week or so of course anything can happen, but with With Europe fundamentally going through problems It's you know, they're going through lockdowns menacing in Europe, you know test ECB stimulus wind down timeline So Austria reimposes harsh restrictions in Germany may follow suit in Euro area Economy to take hit with decisions due to due on fate of QE. So I think the rumor was that the bank the European Central Bank were potentially looking to ease their QE, but now how can they if Potential lockdowns are going to affect the economy the economy still needs to be potentially supported, right? So the return of lockdowns to stem Europe's latest wave of COVID-19 risks sapping the economy Oh, the economic recovery and calling into question the timetable for the European Central Bank's wind down of emergency Stimulus and and the wind down of the emergency stimulus would have been positive for the Euro But if they have to delay that if they write have to do it Maybe in in in April rather than, you know, December will start in April rather than December then obviously the euro Currency is going to remain weak until that time. So Austria on Friday became the first country beyond the continents less vaccinated east to reimpose Widespread restrictions after curbs on people who haven't been jabbed fell to whole soaring infections, you know parts of German Parts of German or Germany also closed Non-essential businesses while the Netherlands has already ordered shops and bars to close early So Problems in Europe and if there's problems in Europe still especially around economic recovery for me The path of these resistance will continue to the downside, especially if the euro if the dollar is still the stronger of the two So that's where we are. I think let me just get rid of some of these Some of these zones up above but yeah direction for me is going to be to the downside So any pullbacks this week for me are buying opportunities or selling opportunities Let's just say On this currency pair, but buying obviously for the dollar moving on to the Australian dollar US dollar and The Australian dollar again lagging behind monetary policy wise and this why you can see, you know, the prices have been Making lower highs and lower lows. So any pullbacks if you want to get short on this currency pair are Buying opportunities, I guess for the US dollar, but I do think that if prices do come down to this 71 area Technically that is a fantastic zone. This is quite nice as well There's 72 round number is really nice as well But I do think the bottom of this range is going to be really nice technically for a potential buy but Let's see what happens there if prices can reach down there and let's look for gold gold Again inflation concerns, you know being a worry, although the dollar is strengthening There are risk global risk sentiment Risk of sentiment still building as well, which is the reason why gold is making higher highs. So You know inflation, you know is is suddenly on everyone's mind. So how bad will it be right and And Inflation gold is a hedge against inflation. So as inflation rises Gold should want to rise to hence the reason why you're seeing gold make those higher highs higher lows Also as well gold will get back to $2,000 is the prediction in the next few months says Duggan And Gary Duggan is a chief executive officer at the Lowell CIO office. So He's talking about the Gold going to potentially 2000 so if they can't if the if the Federal Reserve can't get inflation to come down 2000 is the target right up here. So where are we now at the 1845s? So it's again, if you're looking at that as your target look for buying opportunities potentially the nearest buying opportunity from a demand zone perspective is going to be if prices come down to this 1781 area before looking at buying or if prices make higher highs and then this becomes a Demand zone here and then you're looking for buy trades there. So that's Pretty much the direction at the moment if you are, you know, basically playing against the dollar and if you are Looking for potential short trades if everything if inflation starts to come down or you know The risks risk sentiment starts to wane a little bit. Then I think buying or getting short I should say on the on gold at this 80 1890 area is going to be a decent zone to look for any kind of short trades. Anyways guys, that's it for this week Take care. Hope you have a great trading week and speak to you all soon