 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com and 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 if you want to like, subscribe and share the information that I present every week, please feel free to do so. It supports the channel, gets the quality information out there. And if you are new, our trade process really is to combine fundamental analysis and technical analysis into making really the best trading decisions because fundamental analysis and risk sentiment really is the reason why any asset will move in the medium to long term. Short term is just liquidity hunting generally. But if you want to really kind of predict trends or whether the market is likely to range, you have to understand that there are divergences in monetary policy that you can take advantage of. So for example, if one central bank is hiking rates, another one is cutting rates, then you want to be buying the one that is hiking rates and selling the one that is cutting rates, for example. So we use fundamental analysis to establish, you know, trade direction based off of value. And then we're using technical strategies to enter and supply and demand strategies like daily supply and demand zones, capture pain relief, as well as stop hunting strategies. And yeah, just looking for some entries in the direction that we want to trade in. So with that being said, let's get into the fundamentals and technicals for the week and starting off as we always do on the US dollar index. And the DXY is just a measure of dollar strength against the basket of other currencies. So we use this as confluence to see overall dollar strength for weakness. And what's happened last week is what I probably would have expected to happen. And we've seen a higher dollar, so higher dollar. And the reason why, the reasons why we're going to get higher dollar in the foreseeable future anyway, doesn't mean that because I'm long dollar that prices won't pull back, you know, the trend is to the upside at the moment. And there are reasons for it, fundamental reasons. And hedge funds capitulate on short dollar bets as losses mount. And last year up until probably around around January, matter of fact, we were actually short on the dollar, we were really short on the dollar against, for example, the euro. And it was due to several fundamental reasons, one being that the Federal Reserve were going to, they were implementing, and they still are, I guess, implementing what is known as the FAIT, which is the federal average inflation target, meaning that they wouldn't raise interest rates. If inflation reached 2%, they would have to see an average of 2% rather than inflation just hitting, you know, maybe above 2% of their inflation target. But that has now changed. There are several things that have changed also as well. The US were lagging behind when it came to the recovery, you know, GDP growth, etc. They were really struggling. There was a lot of uncertainty around, you know, whether Donald Trump was going to be, you know, remain President, Joe Biden, now things are a lot clearer. That trade actually is over. And the guys in my private Discord group would have benefited from that information that we understood back in January the 27th. Wednesday, January 27th, right, and I literally put an output this a couple of weeks ago, but just for those of you who are new, and I pretty much said I've been reading a few articles and there seems to be a bit of a shift between buying euros and selling the US dollar in the short term, right? It looks like Europe is lagging behind in behind the US in terms of vaccine rollout. Therefore, projections for GDP will also lag. So for the short term, I am looking to see if there are buying opportunities. And I said short term meaning one to three months. This is back in the end of January. So I was looking at about three month period. So looking for buying opportunities for the dollar. As long as the data supports my bias and that's pretty much what happened. So this is the shift that we kind of knew back in or the stance I've taken back in January, end of January by looking at the data. And you're pretty much seeing that play out as well now. So there is a relentless feel to US yields, even if they are not rising, there is a certain inevitability that they will with the Fed targeting policy at the tail end distribution. The outcome is never outcome is an ever steeper curve. The euro zone is still struggling on many fronts and no surprise at the Treasury Bund. And if you don't really understand that, that's just basically talking about bond yields and bond yields are going up with expectations that interest rates will rise and interest rates will rise due to economic recovery as what's usually, I guess, anonymous with interest rate hikes and cuts. A growing economy and a higher inflation should lead to interest rate hikes whereas the euro zone is still struggling. And again, just to back up that data, we will see a strong economic recovery says Goldman's Oppenheimer. So Goldman Sachs are not in the business of trying to go on TV and be wrong all the time. So they're on Bloomberg. Bloomberg, yes, they do provide free services, but they also their clientele is quite big money. So when they go on Bloomberg and do interviews, they're not trying to mislead them, their big money clients because of the fact that then they their reputation, right? So again, growth, this is just some more confluence that we understand with, you know, what's happening with the dollar. So with that being said, that should continue on into the near future as long as obviously the data supports it and don't just blindly go in. So so what you want to see is is pullbacks potentially into any kind of demand zones or just any kind of bullish price action with prices and, you know, making new highs, etc. So if you can get a pullback into a nice demand zone, you know, this week or next couple of weeks, and then you get some bullish price action that is confluence. Now we could see some some disappointing data for the dollar, not saying it's going to be all, you know, easy plain sailing. So if you do get some disappointing data, then we are in a bit of a supply zone here that from back in November, which is fine. So if prices do start to sell off, then what you want to do is go to the other forex pairs. So for example, the dollar, you know, yen, dollar, Swiss dollar, CAD, for example, and look for potential sell trades on those currency pairs. So the more bullish we see overall strength from the dollar, then we should see overall, you know, strength on those currency pairs. And if you see any weakness, then this is what it is. But we're driven by the fundamentals, not from the technicals. Technicals just used as a way to enter and looking for bargain prices or potential fair value. Moving on to the dollar yen. And again, has really been spoken about really kind of buying the dollar. You're seeing pretty much prices make higher highs. The Japanese yen doesn't really do well in a risk on scenario, meaning that when there is yield or traders want to make a return, you're not really going to buy the Japanese yen because the Japanese yen is actually got negative interest rates. I think it's minus 0.1%. So you wouldn't really want to be holding Japanese yen. And you can pretty much see what's been happening, the positivity around the dollar. All right, so we've got level there. We've got a level just up to the highs. We've got to put one right here as well. Matter of fact, in that area there. But again, it comes down to whether you want to, what direction you want to trade. If we do get some risk off sentiment, then this is actually going to be a fantastic area to look for any kind of short trades. But for me, the path of these resistance is to the upside. So for me, pullbacks into that area, or if we even get a deeper pullback into the 106s. Not too sure whether that will happen anytime soon, but you never know with trading and the markets. Moving on to the dollar Swiss. And the dollar Swiss again in the same boat as the dollar yen. The Swiss franc, I think they're negative, they're negative 75, sorry, 0.75% when it comes to interest rates. And yeah, they're lagging behind the US. So again, there were some traders that did get in long and on private group around here and really did benefit from, you know, this week with some bullish price action. So if you get a pullback into that zone, I think that would be quite nice for a continued long trade. And again, as long as the data supports the long dollar bias, I've been, I was long dollar down here. It's actually long dollar around here and end up getting out around here and then was looking for an entry. Didn't manage to get in any entries this week. Unfortunately, I missed out, but I did get into a few other really profitable trades over the past couple of weeks. So I'm not too fast. You can't catch everything. Can you? But the main thing is that, you know, the guys in the group are benefiting from the fundamental and risk sentiment analysis and understanding, you know, medium to long term direction and then capitalizing from the from the move. Moving on to the dollar CAD and the dollar CAD is a bit of a you've got two really kind of stronger currencies. So you're not seeing the dollar, you know, the major dollar moves, US dollar moves that you would see on, for example, weaker currency, because at the end of the day, what we're doing is, is we're trying to look for strength versus weakness. If you've got to, you know, strong currencies or appreciating currencies, potentially, it's very difficult to, you know, you're not going to really see the trend, right? The market is likely to probably range because the market doesn't know where the bargain is or the bargain has been established, right? So you've seen this week really, you haven't really seen much movement when it comes to the dollar CAD. And personally, I'm not really looking to trade this pair from a fundamental perspective, even this zone, if you need to trade that, it's not really the best zone, it's been touched several times. So I'm not really keen on that one. And even this level up top has been kind of touched several times. It's okay as a level, I guess, but I really want prices to come up to if I was looking to short this one to nine area to look for long trades. If I'm looking for sort of short trades on the US dollar and buying the Canadian dollar, if I'm looking to buy the US dollar, in fact, this zone though is technically I do like that. And I think that would be actually quite a nice area to look for some long trade. So the one, two, four, one, two, three, because the question then becomes, why should the Canadian dollar strengthen over the US dollar? You know, so much that, you know, it breaks that level. And if we're getting we've got to pretty much even growing economies and two economies that do a really well and monetary policy is is more positive and I guess hawkish, then you should want to see some sort of ranging market at some point in time. And I think that's probably where the limit of the move is for the for the short term. And that's obviously data changes. Moving on to the New Zealand dollar, US dollar and managed to take profit. This week, took it yesterday, Friday, in this area, after getting short around the 7250 area really nice couple of hundred pips on that trade really, really nice. I think the the was reading some articles in the group where we were talking about the New Zealand dollar might actually start to strengthen not necessarily against the US dollar but it being a risk on currency, a commodity currency, we could see potentially this could be actually maybe a bit of value. But the short trade really was due to GDP going into the negative. So the fear of a double dip recession in the with the New Zealand economy. So as that came out, I ended up getting short here and really, really nice trades. And for those technical traders, you always moan and complain about why zones don't hold. And the reason why certain zones won't hold and will never hold is because, again, the market is not reacting potentially in the long term to to technical zones, right? If this is not seen as an absolute bargain for the New Zealand dollar, right, if you come down to the these zones here, and the market thinks, well, that's not a bargain. And then they're deriving their value and they're buying off the New Zealand dollar based not on technical zones, they're basing it based off of, you know, fundamental zones, then there's no demand zone in the world that is going to work in the long term because the market is pushing, you know, prices to where they want it, where they think value is. So with that being said, it's all about again, the direction, right, you need to understand and really kind of understand why the market is moving in a direction or likely to move in a certain direction. Trust me, it's not technical analysis. And this is the reason why, you know, 80% of 90% of traders on Forex brokers, you see the data don't make any consistent money because they don't understand the long term direction, medium to long term direction of an asset. But with that being said, I think this trade for me now is over anyway. I'm not really looking to get involved in the in this in this trade anymore. I think it has come down. It's pulled back a little bit more. And again, the New Zealand dollar may want to kind of hold here anyway. So let's see what happens. It might pull down a bit. Who knows? But for me, I'm not really in this trade. But if you are, if you want to get long, that's actually a decent zone to get long. And I think there is, yeah, there would be a not quite let's see if there was any major, I said, there's a, there's some support and resistance at the top of that area as well, where you've got resistance, resistance, resistance within that demand zone there. So potentially, you could see a bit of a reversal or a bit of a pullback into the zone and then a reversal. So that's a decent for for a long for a short trade meaning that you want to get short on the New Zealand dollar and buy the US dollar. Then you're looking for a massive pullback at the moment and less prices make lower lows. And you're looking for a pullback into a supply zone and then looking to get short. Moving on to the pound dollar and the pound dollar. Again, we had some strong or stronger dollar sentiment, which basically pushed prices through the that demand zone. But we did actually get prices kind of just about nearly ping off the off of that demand zone. The pound at the moment, last week, I should say, there was some some UK jobs data that improved despite the fresh lockdown. But I think the expectation may be that unemployment is likely to rise as the furlough scheme support is unwound, which I think could take the jobless rate to six to 6.65%. And also as well, there was a bit of a negative news regarding UK inflation dives, but it's unlikely to last. So steep discounting on clothing helped drive inflation quite a bit lower in February. But this is arguably only a blip on the road to 2% later this year. So if we do get against some economic growth, which is basically looking likely in the UK, surprising as it sounds, I wasn't really sorry, I wasn't really a believer in in buying the pound. But it just seems to be in the past, he's been rallying on one of the best currencies. When it comes to the euro, the dollar and the pound. I think the the pound is definitely second best out of the out of the three. So if you do want to be a buyer of the pound, I personally wouldn't be a buyer of the pound against the dollar. But you might want to be a buyer of the pound against some other currencies, you know, some week currencies, like for example, the pound Swiss Swiss and the pound yen, which is what a few traders did get involved in again in the private group last week. So looking for any kind of pullbacks into a demand zone, if you want to get long, that would be probably the zone to look for. If you're looking to get short and you're looking for this zone right here personally, not really looking for any kind of a trades on this and less prices really kind of come up to this this zone here. Plastic can come up to this sort of 41 between 41, 141 and 142.50. Then I will look for some maybe a short trade here because I can't see the pound really strengthening. And again, it depends on the data if the US come out and they've got really good, really bad data, then this may want to go higher. Moving on to the Euro dollar and Euro dollar actually took full profit now from these trades, really, really nice trades. So I end up entering up here and entering actually around here on the on another trade. So both trades now I am out took profit down here. And I think this has probably got maybe some further to go, but I'm not really going to, you know, chance it. If you are in any kind of a short positions, who's reading some articles by some banks that were talking about, you know, the 17, 1.17 area being a target as well as the 116 as well. But I'm fine with, you know, the profit that we've made. So I took a profit here if prices do pull back to a zone, I'll probably re enter somewhere on the underside of this level here. So I think it might be due to pull back a bit of a pullback. And then looking for maybe some some more trades here. If you are looking for any kind of long trades now is a decent time. And probably the 116 area. This is this is where there was the elections matter of fact. This was the US election. So this could be seen as a bit of a bargain at the moment. But let's see, I think you'd have to really see some positivity out of the euro and the euro zone, you know, economic growth, the virus being contained at the moment, the Europe's, you know, struggling with containing the virus at the currency drop below a key technical level reflects deteriorating dynamics in the continent's fight against the pandemic. And again, we were talking about, you know, one of the strongest trends in the last 12 months appears to have broken to the euro is no longer a consistent upward path compared to the dollar. And this is ramifications for virtually everything. And there was something I was meant to read right. So it talks about the it says optimism around about stronger euros being put to the to a rigorous test and why the clearest business is the virus which was which dominates all of our lives, the border narrative of Europe, European struggle with the pandemic and how it compares America's battle on the other side of the Atlantic is roughly accurate, right? So neither has done well in combating the virus as countries with wealth and advanced health systems should have done. But the EU record has been appreciate appreciably better throughout, but that is now beginning to shift. Yeah. So Europe again, as we know, not handling COVID well. And the second biggest reason is to bond market expectations for inflation as well. And again, last week, we did talk about the the minor gap on the the economy. So Europe and the US are drifting further apart speed of vaccination and size of rescue packages help explain widening path to recovery. And in this article last week or the week before when I was outlining this, the US closes the output gap swiftly. So that's for example, GDP, they're growing, whereas Europe struggles to rebound fully. So there were divergences, there were divergences between the recovery. And that is really what is driving the euro dollar lower. Yeah. So no Elliot wave here. There's no, you know, no pin bar at a level of support resistance, which is the reason why we're getting price movements. If you want to understand price movements in the medium to long term and really ride these trends to the downside for hundreds and hundreds of pips, these trades don't come around all the time, obviously, but when they do, you need to be able to capitalize on them. And you won't be able to do that. Yeah, you probably take profit too early if you don't understand why prices should be, you know, around here when we were buying, you know, up here and around here. So but anyways, from a continued sell trade perspective, for me, any kind of pullbacks to supply or sell trades doesn't mean it's not an opportunity to buy the euro at some point, maybe some negative US data. But for me, my path of this resistance is to the downside as the momentum has shifted. Moving on to the euro yen and as weak as the euro is against the against the yen, it looks to be doing decent. I did outline this area last week as an area to potentially look for long trades. If you want to be a buyer of the euro against the yen, you can see the confluence within that nice demand zone that made higher highs pull back. And then there was a trade right there. So really nice technical trade, just nothing fundamentally. If you do want to get short, then looking at that area up top for a decent short trade is I like it technically, but not necessarily fundamentally. They're basically dogged with the least fleas with this with this currency pair. Moving on to the Australian dollar US dollar and again, two fairly strong currencies, the dollar has benefited from some positive sentiment over the Australian dollar. But I don't think this will be trending down for like like it has in the euro for far too long. The Australian dollar is actually quite a decent currency. But I do like any of this this area here. In fact, I wouldn't necessarily look for any kind of long trades here. This level's touched, you know, once already twice is okay. But I think the better area to look for any kind of long trades, if you want to get long on this is just below. So the 75, 75, 50 area looking for short trades buying the US dollar, then that's a decent zone to look for any kind of short trades. But fundamentally, I'm not really interested in trading this pairs. Again, you've got two strong currencies competing against each other. So it's not necessarily a pair that will I can see trending in the medium to long term. Moving on to the dollar, sorry, Aussie, Aussie yen. And we actually managed, I think this was actually drawn wrong, this should be there. This is the this is a trade that I managed to get into this week. Really, really nice trade so far. Again, going long on the Australian dollar because in a risk on environment, commodity currencies generally do well. So looking for that pullback, you know, last week, even now I'm long, this is seen as an opportunity to get long on a pullback, right. So risk on Australia dollar should want to move higher in again the medium to long term and in a risk off environment, the Japanese yen doesn't do well. So you want to sell. So again, there's divergence there, right? There's divergence between risk on and risk off currencies. So these are these are the kind of trades that are the easier trades. Does that mean that prices are definitely going to go to the upside and make new highs? Who knows? Nobody knows. But the point is, is that in the probabilities game, you know, the path of these resistance should be to the upside. So a really nice trade managed to get in actually at let me just delete this and the guys will know as we went over this on the on the, I think it was the Tuesday or the Wednesday in our in our live group call. So really nice trade. Here we are. I think the trade was at the stop loss was at one 18. Right. Yep. And here we are. So far. So good. So really nice trade so far. Looking to trade this up to around the highs. Some profit has been taken as well due to the method that we use to capitalise on moves as prices are going higher. And yeah, really, really nice trade that. So let's I think that's pretty much it. If you are looking for any kind of short trades, I think the highs around here are really nice. Any kind of long trades, again, maybe a pullback into a deeper zone. Maybe the 82 round number will be another opportunity to get long. If not, I think this 80 81 area is a really nice zone to get long. That is going to be probably a definitely a trade for me. If as well, if the sentiment is on and the data supports continues to support the divergence. And finally, we have gold and gold has been going sideways at the moment over the last week. But overall, we're still in that, you know, that that downtrend. And again, last week was explained in that when you got, you know, dollar, not only dollar and economic recovery, you also have bond bond yields are rising. So gold falls off to weekly gains as traders await bond auctions. So gold declined and made concerns that treasury yields may rise further as investors brace for key U.S. bond auctions. And really, when you when you kind of understand why money would flow into into bonds and out of gold, they're both safe haven assets, right? So if one is paying an interest in yield, yeah, and one isn't, then money will flow into the the safe haven asset that is going to be paying you in a return just for holding it, whereas gold doesn't pay you anything. Doesn't mean that gold isn't isn't always going to be a buy at some point. But if I was looking to buy gold, it would be, you know, I'd have to see really concerns about inflation going higher because a gold is a hedge against inflation. So inflation, when I say getting going higher, so well above the central bank's 2 percent target, let's say, for example, it goes to it's starting to go 3 percent, 4 percent, and it's inflation is getting out of control. Then for me, if I start to see that happening or there's a talk about that actually happening, then for me, that is a nice gold buying opportunity. But for now, I think the path again of least resistance is probably to the downside. There wasn't a white wasn't drawn, but there was a supply zone right there. Prices did end up coming to the upside, breaking through a little bit for me. I don't know, I wouldn't. It's not I'm going to draw a supply zone here, but it's not the strongest supply zone. If I was looking to go short on this, then I'd have to wait for prices to really kind of come down, pull back up and then look for any kind of short trade or if prices move up to this supply zone and then look for a short trade. But fundamentally, I think gold is going to be probably suffering for, I say suffering, but it's not going to necessarily go too much higher. Definitely not necessarily above these highs here anyway, for the foreseeable future. As long as money's kind of pouring into the government treasury bonds. So let's see what happens with gold. But if you do want to be a buyer, I think technically this is actually quite a nice area. The 1680 area is decent for a potential buy. Anyways, guys, that's it for this week. I hope you enjoyed the analysis. Again, don't forget to like, subscribe and share if you find the analysis useful. And thank you for all the comments. Take care. And I hope you have a great trading week.