 Hi, my name's Liam Rowe, currency trader and trading coach at trading180.com and welcome to this week's supply and demand for us in gold, fundamental and technical analysis. So getting straight into the week ahead, starting the 12th of June, it will be a busy week. Then you should zoom in a bit in the US with the Fed interest rate decision inflation rate retail sales in Michigan consumer sentiment taking the central stage investors will closely follow the European Central Bank and Bank of Japan monetary policy meetings. China will be releasing industrial production retail sales of fixed asset investment data while we'll skip India as we don't trade that currency. Other important releases include Germany's ZEW business confidence, UK's trade balance and GDP for April and Australia's consumer and business confidence as well as jobless rates. So lots of important and data releases coming out for various countries and we'll see how that affects or could affect you know prices at least in the short to medium term and if you want to have a more detailed read you can go to tradingeconomics.com and if you go to the week ahead click on that it will show you exactly where what to read basically to get into the details. Anyways looking at the technicals and some more fundamentals in terms of some Bloomberg reports starting off on the dollar index and looking at last week's analysis I guess what's what's really happened is that the federal reserve are expected to hold rates and skip but there's expected to be kind of like a hawkish skip at the moment and it says the Fed is set to pause and assess the effect of rate hike so officials consider first break since US tightening began ECB made keep hiking rates while Bank of Japan and People's Bank of China stayed on hold so there's some convergences there and divergences in terms of interest rate policy and central banks. Federal reserve policymakers are about to take their first break from an interest rate hiking campaign that started 15 months ago even as they confront a resilient US economy and persistent inflation so the federal open market committee on Wednesday is expected to maintain its benchmark lending rate at the 5% to 5.25% range marking the first skip after 10 consecutive increases going back to March of last year while officials efforts have helped to reduce price pressures in the US economy inflation remains well above their goals so central banks have a mandate to get inflation down to the 2% target and they will have to typically keep hiking rates which is basically appreciating an attempt to appreciate their currency to get inflation down to their 2% target and says investors focus will be on the Fed's quarterly dot plot in its summary of economic projections which is expected to show the policy benchmark rate at 5.1% at the end of 2023 so in fact the Fed are expecting really no cuts right no cuts by the end of the year and but by contrast the markets are pricing in the possibility of a quarter point hike in July followed by a similar size cut by December and some Fed policymakers have emphasized that a pause in the hiking cycle shouldn't be seen as a as the final increase so I'll just read out quickly what this Bloomberg economics economists say and they say that the discord on the FOMC is mounting for those who prefer a skip sorry to skip a hike in June want to wait and see given the long variable legs of monetary policy how 500 basis points of rate hikes into date are cooling the economy so more hawkish members are convinced rate hikes aren't yet restrictive enough and the Fed shouldn't risk falling behind the curve we see a hawkish skip as a way to maintain an enmity on the committee so a hawkish skip is expected and so when we look at the Fed watch tall and we see June we see a the probability of a hike at 30% pretty much in a hold at a no change at 70% but in July in fact we have a 52% chance of a 25 basis point hike and a 17% chance of a 50 basis point hike and so although the dollar could be is looking like they are going to hold rates if this does come to fruition then the dollar should more likely be supported in terms of a buy but again we do have CPI data yeah out on on Tuesday and so the CPI data is really going to determine whether the direction for the dollar right so if inflation comes out as expected or higher I think that what you will probably see is the dollar actually look to appreciate because that will put pressure on the Fed to to hike because inflation is sticky or it is you know it's not coming down basically but if inflation is it does come down then I think that the dollar is probably more likely to be a bit of a sell and the economic calendar from a trading economics inflation rate month for month core inflation and inflation rate year on year you can see you know the forecasts from trading economics as well as the consensus and both the consensus and trading economics expect inflation rate month for month core inflation year on year and inflation rate year on year to come down right to come down so So that's the consensus trade at the moment. So, but if that does not come to fruition, then, and it comes in actually as expected or higher, then you can expect the dollar really to rally quite a bit, right? And so that's where we are. I think it's all about really the CPI data is gonna determine where the dollar is gonna go in at least in the short term. Looking at the dollar yen and the dollar yen, I think for me, I would probably, my bias is more to buy the dollar. If again, the data supports that narrative we could get this week, prices really kind of pulled back, if not into the one three sevens based off of what happens with the FMC in inflation. We might actually see prices come down to the one three fives if data doesn't support that narrative if inflation is coming down naturally. Then that's pretty much where we are. The Bank of Japan not expected to really kind of high crates, the Bank of Japan are still very dovish. Ueda, the governor is quite dovish on yield curve control and adjusting any kind of monetary policy. So I do think that with the Bank of Japan being quite dovish, necessarily I don't think the market was necessarily gonna do some massive trend or anything like that, but I do think that it's really about yen strength will be determined on the dollar weakness at the end of the day. Same thing goes to all dollar pairs, Swiss franc is in the same boat as everyone else. So Swiss franc last week come down just below that demand zone into a top end of this demand zone here. The Swiss franc, Swiss national bank are still hiking rates and so yeah, I would say it's more of a, again, waiting really for the dollar this week to decide and the Fed to decide what they're doing with interest rates. Again, if we do get the Fed looking to potentially hike rates, then you can see prices go to the upside. If we see inflation come at lower or as expected, then we're gonna see prices actually come down and there's no demand zone or supply zone that's gonna really stand in the way of any kind of fundamental analysis to be fair. You're gonna have to, with demand zones and supply zones you need the fundamentals on your side in order to support your trade. So yeah, I think we just really just waiting for the, for Tuesday to come around and see what happens with inflation and what the Fed are likely to do. Pound, sorry, the dollar CAD. So dollar CAD from last week we had the Canadian dollar actually strengthen against the majority of currencies. And this is because what we saw was a surprise the Bank of Canada policy rate, they hiked policy rates to 4.75%. So again, the Bank of Canada upends markets by boosting policy rates to 4.75% overheating economy cited as reason for 25 basis point hike. McClemm doesn't give explicit guidance on the next potential move. And so the Bank of Canada defied expectations by restarting its interest rate tightening cycle saying the economy is running too hot. And so that took the market by surprise. And as I said before, there's no demand zone that's gonna stand in the way of fundamentals or risk sentiment. And so the demand zones I had there before, once the Canadian dollar started to surprise the markets by hiking rates, no technical level's gonna really hold. And so not in a short-term anyway, the market has to revalue what the Canadian dollar is worth. And so you saw prices move to the downside. So I am actually quite a Buddhist on the Canadian dollar, not necessarily against the US dollar. So there are some other pairs that I am quite a Buddhist on the Canadian dollar against, but if you do wanna be a buyer of the Canadian dollar versus the US dollar, then I think that's gonna be a really nice area to look for technically a sell trade, zooming out a bit. This area has been touched several times, right? This is becoming less and less of a bargain. So my opinion would be prices would have to really come down to if I'm looking to buy the dollar against the Canadian dollar, technically I think the best area is gonna be right down by the 132s. Or if, again, there's a surprise in inflation be remaining sticky or going higher with the Federal Reserve having to potentially hike rates, you could see prices bounce from here, but let's see what happens. It's not really a pair that I'm interested in trading from a central bank perspective. We've got the pound dollar and the pound dollar going from strength to strength. Again, we did see some weakness last week with the US dollar. We did see a supply zone a couple of weeks ago react to this area here, but the dollar basically being a bit uncertain and the pound in fact, the market pricing in some more hikes. I think the pound is looking to be supported. Also as well, UK likely to dodge a recession with anemic growth, the BCC says. So business group upgrades outlook despite lingering inflation and household spending and business investment are both stronger. So the UK economy will probably skirt a recession aspiring through anemic growth in the year ahead due to lingering inflation, the British chambers of commerce said. And so I think they're in a better place than Europe at the moment and I will get into Europe in a sec, but when it comes to the pound dollar, again, with any kind of dollar trades, this, I think this week we're really at the mercy of what the data is saying. And so there is a demand zone here. So if you do see prices come down to this demand zone and look for any kind of buy trades if you wanna continue buying the British pound over the US dollar, if prices drift up this week and we come into this supply zone and then you get some triggering fundamental news with regards to strengthening dollar, then I think that's gonna be very nice, a very nice area to look for some buy trades on the dollar and some short trades on the pound dollar. And for those of you who are interested, the enrollment for the Trading 180 members area and the mentoring group is gonna open on the 19th of June, Mondays are seven days from this video and I know a lot of people have been waiting to get involved in this. And again, just to kind of give you a brief description of what you'll get, you'll get mentoring from me within the Discord channel where I give you my analysis in depth analysis charts, discussions with some great traders. Also get access to the fundamental analysis spreadsheet where I give you my trading bias on the pairs. Also as well, you get access to the exclusive videos for members only and that I don't put on YouTube as well as Wednesday live group calls and so and much, much, much more. So if you are interested in joining the enrollment opens on the 19th of June and it would only be for a limited time, maybe around about five, six, seven days is a short window that you can join. So yeah, if you want to just have a look on the 19th of June, check out trading180.com. So going to the Euro dollar and Euro dollar. From an interest rate perspective, the ECB expected to hike twice. And I've seen there's actually one of the hawkish central banks, the ECB seen headed for Goldilocks moment with rate path just right. So economists aren't concerned about the overall under tightening deposit rate to hit 3.75% in July, hold there until June, 2024. And so the European central bank will need to raise rates too far nor lift, no stop lifting them too early according to an economist survey, surveyed by Bloomberg who seek borrowing cost peaking in July. And so although that sounds fantastic, the problem is, is that the Eurozone succumbs to mildest of recessions on energy shocks to revise euros that data reveal first downturn since the pandemic and growth likely to have resumed this quarter in inflation easing. So the market is actually looking past the fact that we had a technical recession in Europe, which typically is actually negative for a currency. And I say negative, but it depreciates the currency. And so it says Euro had a winter recession after all. And you would have thought that the market would have reacted, but I think the market might be looking past this recession and thinking that growth is likely to resumed later this quarter, but that data needs to come out maybe the next month or the month after. But yeah, for me, the Euro has become a bit of a trickier pair to trade simply because that strength might be, is waning, right? In terms of economic strength, and if it continues, then what that does is that it puts pressure on the European central bank actually to reduce their hikes because central banks don't necessarily want to hike during a recession because you'll make the recession worse by making borrowing and lending costs more expensive. So businesses suffer, households suffer with mortgage repayments. And so central banks typically will tend to be a lot more cautious with regards to hiking rates in a recession. And so yeah, if you do want to get short on the Euro dollar and short by the dollar in anticipation of a stronger dollar then I think now maybe slightly higher is actually quite a decent area to look for some short trades or maybe up into the 10850s. But again, this is really gonna be driven by the CPI data and what the feds say on Wednesday. But if you're looking for any kind of buy trades then I would probably say you've got that area there as a demand zone starting from around here. In fact, I'll just draw this from here. So that's really where you're looking at in terms of your first kind of demand zone to buy the Euro if you think that the dollar is gonna get weaker and depreciate. And yeah, I think that's pretty much it. You're looking for that kind of that pullback. So those are the areas looking for Euro yen. I've added this pair to the weekly analysis. As you do have a bit of diverges between the ECB and the Bank of Japan. Yes, the Bank of Japan are holding raised the possible yield curve control adjustment in June or July. But for now they are, I say June is probably more July. In fact, end of July. But that's maybe a couple months away. So there is still an opportunity to short that yen. And so looking at where the supply and demand zones are, let's look at here. And then we've got some supplies we've made higher highs. Sorry, some demand there. And there's demand zone is gonna be down here as well. So you can see where prices have made higher highs, higher lows here, high, low, high, low. And then you've seen new highs when prices pull back to that area there. You can see prices have reacted, right? And you're just getting involved in the lower time frames and looking for buyers when prices come down. So there, that's where we are now. And I do think that again, if Europe come out and they're actually quite dovish with their announcement because they have their announcement on Thursday, I think it is Thursday, and they reduce the fact that they might be maybe hiking one more time then you could actually see the Euro weekend as well. So we could come down to at least a one for 650s or one for six round number. But my bias at the moment would be out of the two with the European Citroën Bank hiking of being more hawkish should see prices go to the upside. But I would be more looking for pullbacks into demand zones rather than looking to buy at higher. So either looking to buy somewhere around here or pull back into this demand zone before looking at getting long and Euro pound. And so again, we've seen this move to the downside. And although the ECB have been actually more of the, actually I would say more of the hawkish central bank out of two, I think they probably have. I think the pound has gained a bit of an edge simply because of the economic status. We just looked at the pound being not going into a recession whereas we've had the Euro actually succumbed to the modest of recessions. And so when you look at that on the price chart this is why you're seeing the Euro weakened against the pound. So let me just zoom out a little bit and just see if I can get a little bit more detail in terms of any kind of demand zones. If you do want to be a buyer of the Euro it's going to either be there or the nearest area is going to be around here. But apart from these resistance it looks like it's to the downside. So any pullbacks I think are going to be decent short in areas to buy the pound over the Euro but just purely based off of recession and if the market is focused on the recession and the weakness that recessions bring then that should be a decent trade to the short side. Looking at the Australian dollar, US dollar and this week we had another surprise from a central bank and that was the Australian RBA. The Reserve Bank Australia being very hawkish so hawkish Australian economies sees RBA raising key rate to 4.6% and they did raise rates this week. Surprised the market and so with that you saw prices actually go higher and as I always keep saying there's no supply zone or demand zone that's going to stand in the way of the fundamentals. That's how you pick the best trades or state out of trades that you shouldn't necessarily be taking because if you understand what's happening beyond the price chart and if you're planning on getting short based off of just the technical level and you didn't know that the RBA had hiked rates then you're going to get caught on the wrong side or I'll get stopped out whereas if you knew that they hiked rates and that it typically appreciates a currency then if you were short here pre the news then you could just get out of the trade or just not take the trade afterwards. So with that being said you would have to take that supply zone away and this turns to now demand and this turns to demand. Right so you've got some demand zones here so if you are looking to be a buyer of the Australian dollar based off of Australian dollar strength and US dollar weakness then that actually is a really nice zone to look for a buy trade. And finally gold. So gold again holding up within this range this auction between this demand zone here the 1933s and we've got the 1985s areas. Again, decisions have to be made with regards to the value of gold and that would now depend upon what the Fed are doing as well as risk sentiment but for now gold has been in this auction, this range and so this week is going to be pivotal. So if you think the dollar is going to get weaker you're looking for a pullback into that demand zone if you think the dollar is going to get stronger then you're looking for a pullback into that supply zone there or even a bit higher up before looking at getting short. Now there was this article on Bloomberg which said central bankers are absolutely buying gold and it says Crowell and this was six days ago and we said we saw record holdings from central banks increase significantly in 2022 and we'll continue into the year Ruth Crowell's chief executive officer at the London Bullion Market Association discusses the supply and demand for gold and her outlook on the precious metals she speaks to Bloomberg television and so on and so forth. Right and so obviously a very smart woman works in the gold industry and so she sees central banks looking to continue to buy gold then any pullbacks to demand zones whether it's this demand zone in the 1940s or just below should be seen as decent buying opportunities for gold and yeah that's pretty much where we are now yeah that's it for this week guys I hope you have a great trading week don't forget to check out Trading 180 and the event starts 19th of June take care guys and hope you have a great trading week.