 Hi, my name is Leon Roeb currency trader and trading coach at trading 180 comm and welcome to this week's Forex and gold supply and demand Fundamental and technical analysis We'll welcome to you if you are watching this for the first time and an equally one welcome to you if you are Returning and don't forget to press the like and subscribe button As it helps support the channel and gets the quality content to the traders that like to trade Technicals as well as fundamental analysis. So looking at the week ahead We have in the US this week will be dominated by earnings report speeches by several federal officials and housing data Investors will be monitoring financial markets in the UK following the government you turn on Tax cuts so in China the 20th National Congress of the Chinese Communist Party will take place in the third court GDP growth Alongside industrial production and retail sales will be released also inflation rate data will is due for the UK, Japan, Canada and New Zealand and that actually is important because That will set the tone inflation data will set the tone as to What central banks are looking to do with their with their interest rates, right? So we'll get into what's happened in the past and also as well the impacts of You know the potential for You know certain inflation data may have on some of these currencies. So looking At the oh and by the way, just in case you want to know, you know how to access this It's on trading economics comm one of my go-to sites and if you go to the week ahead Should be somewhere here by the time you look at it click on that and then you can look at the synopsis and then go into You know the details if you wish so starting off on the Dora index Dora index is just a measure of dollar strength and you can see that pretty much the dollar has been appreciating in a dominant currency Over the past how long probably over a year now. Yes, it's been it's been a while That I've been you know buying dollars on my bias has been to buy dollars pretty much week in week out hasn't really changed so anyways looking at the my bias obviously Is is to the is to the long side obviously you want to I want to look for you know bargains and just looking at the dollar index Gives me an idea as to if I'm buying the dollar in an expensive area or if I'm looking for bargains and many of you may know this as the Moving average I term it the moving fair value because an average if you're speaking in terms of understanding value Then in fact an average a mean is actually fair value between an expensive area right and a bargain or cheap prices So in between that right would be the average and is actually known as fair value and so Personally, I don't look to trade Currencies or to buy or sell currencies That are at least not at some sort of fair value because anything above fair value and you know fair value over the month monthly prices You know, I'm not looking to buy expensive area So for the dollar anything, you know at fair value and below would be considered, you know bargain prices So for me looking for a pullback before potentially long Why is that and the Fundamentally we've got, you know, the feds bullard leaves open the possibility of larger December hikes so the St. Louis Chief suggests the Fed could discuss 75 basis point move says it's too early to alter policy of shrinking balance sheet and so What happened earlier this week was that the inflation came out and The term stickier was was used basically, you know that inflation may persist for a bit high inflation may persist for a bit longer and obviously it's getting a bit difficult for the Fed to try to Bring it down. So they have to hike rates now With with hikes not all hikes are good hikes not opposite or appreciate a currency because the Economy has to be able to support those rate hikes if the economy is seen as you know contracting or potentially going into a potential recession Then the hikes aren't necessarily the Appreciate a currency, but then you can't look at also the dollar in isolation So you might be thinking to yourself. Well, the headlines are suggesting that the dollar is going into The US economy is going into a recession But I think that the dollar and the market think this as well is that the dollar has been best placed to to survive I guess a Recession or necessarily survive a recession if they go into a recession It could be a shallow recession Whereas the likes of Europe and the UK are likely to go into a deeper recession, right? So there's differences there and it's the differences If you understand those differences will then guide you as to which currencies you should be buying and selling So there are nuances, you know We're all going into a recession, but who's the dog with the least fleas as many of you may have heard me say, you know You know many times over the years who is the best of the worst and the dollar is seen as being the best of the worst At least out of the major currencies. So a Fed hike in in this scenario should Appreciate the the dollar simply because not only are they hiking quite aggressively But those hikes should be at least supported by the economy and you know low unemployment higher employment numbers that came out recently also so the dollar for me any pullbacks any pullbacks I Think of buying opportunities and you wouldn't necessarily buy the dollar index But you would for example look for dollar crosses and look to buy those again This isn't financial advice. This is telling you what I'm doing. So any pullbacks this week buying opportunities, especially ending below fair value That's my bias on the dollar dollar yen very interesting very very interesting on the dollar yen because the Bank of Japan ended up intervening when prices went to the one four sixes and so They intervened here basically central bank intervention is Just a way for them to kind of support the currency or to try to devalue or appreciate the currency they wanted to actually appreciate the currency by stepping in and So they but for the dollar index and because the dollar is so strong. It didn't really have the effect I mean it went down, you know 600 pips, you know and pretty much in a day But since then we've seen this, you know strong moves. So in fact, maybe the 150s Actually, I think anywhere from now is looked at as they could step in at any time to try to stop the devaluation and depreciation of The yen so but technically there's no setup there, right? You look into the left and to me There's nothing there. I mean you can look back at, you know Fire I should look back at all what data does this provide doesn't even go back that far unfortunately on on Oanda But we are reaching I think probably somewhere like all-time highs or definitely You know multi-decade highs. So I do think that this is putting pressure on the Bank of Japan to intervene even more start to step up the pace of Their intervention so this could be a sell but there's no technical setup unfortunately in the meantime If you are looking to continue to buy the dollar I do think now that anywhere I think around these lows is going to be really nice and It's quite a wide area of demand. It's not, you know, the prettiest people say. Oh, well, where do I buy in that demand zone for me? For me, I think the best there is is going to be down right at these lows right here It's going to be really nice if prices can come down to that one four one six and I You know I'm a buyer of of the of the dollar yen, which at the moment. I'm actually not a Buyer of the well my bias would be to the upside on the dollar yen on a pullback But I think with all these interventions is very tricky at the moment to to go against the yen from a risk-off and Central Bank intervention perspective, so I Do think that the upside is definitely going to be capped But if you do want to get long any pullbacks at least down into the one four fours If you want to go against actual bank intervention of where you want to start to look for buying of the dollars But I think I think the one four ones might actually be a really nice level technically And even better would be the one three sixes and just zooming out that just looks like a you know A decent pullback. It looks like a bath, you know over a thousand pit pullback But when you consider, you know, what's happened You know over the past year or so. It's just a decent pullback. I think anyways So my bias on this one if I had to go either way, it's a bit of a tricky one I think with intervention then I want to go short without intervention if this if this pulls back just naturally and normally without the The Bank of Japan intervening then I would be long Dollar Swiss again, not really a pair. I'm looking to trade but at the two you would expect the dollar US dollar to to be the stronger of the two and So I mean, we are actually I won't delete that we are up into this supply zone Which hasn't broken yet, but we also are and do have areas of daily supply Within these zones. So I think any pullbacks into probably the 99 cent area It's decent to look for any kind of long trades and we've got areas of Support in there and say maybe somewhere around there might be used and also probably down at these potential lows Zoom out a bit more Not necessarily the greatest, but I think you know because the move started really around here. I Think any pullbacks to 97 50 is actually a decent for a for a long trade That'd be my bias, but again, not really looking to take this Trade this pair simply because the Swiss Frank also are hiking on their hiking cycle and they're also a risk of currency So I'm looking for for better divergences and better pairs of better divergences the dollar CAD is actually pretty seen as a as having slightly slightly better divergence if you want to call it a divergence simply because of the CAD being a commodity currency and in times of risk off The the dollar should be the one that Strengthens over commodity currencies and you'll see that definitely on the Australian dollar or New Zealand dollar But where we are now if you are looking to buy this currency pair The any pullbacks I think into probably the deeper pullback into that demand zone the 136 Ones to 135 I think is a decent area to look for or the better pullback to cheaper pullback Yes, the Canadian Bank of Canada are also hiking rates, but there's been reading some reports recently that in fact they may start to Tail off and actually reduce rates reduce their hiking like what Australia did and start to hike a bit less And so, you know with one currency looking to obviously hike a bit more aggressively and the Bank of Canada looking to hike a bit less then you're seeing This you know start to happen in terms of the dollar appreciating against the Canadian dollar using Sorry one second Yeah, I think that's pretty much it any pullbacks if that's the direction we're trading if you want to get short on the Canadian I wouldn't use any levels from like 2020 in order to try to look for a time any shorts or anything like that You'd have to really look for prices to to prove that that this is a bargain for the Canadian dollar By pulling back and then a pullback up into that zone before looking again short But my bias would be you know to the long side Again another commodity currency been saying this for a while that New Zealand dollar again not really a pair that I'm trading But from a commodity currency perspective The dollar has been You know the the dominant currency so any pullbacks into a demand zone. Sorry supply zone Is really where you want to get short as long as risk remains off? And so yeah, I think that's pretty much it. There is I think there's anything really I mean, there's a there's definitely a historical low from back in 2020 which is definitely being looked at but ultimately The question is is why do you want to buy the New Zealand dollar? Against the US dollar because if you were just buying it because it's a technical low Then you know, you're not understanding value and that's how traders typically end up getting caught on the wrong side and being stopped out unnecessarily if You know, there's there You know, you have to understand really value and why there's likely You know why the New Zealand dollar is an absolute bargain here And it would be for me if you know risks starts to come back on or if the US economy, you know disappoints and the Fed don't necessarily You know hike as much as expected then the then the dollar has to be revalued But until you know that actually comes about For me any pullbacks, you know is a shorting opportunities Looking at the pound and the pound I actually got in involved on this trade Here is pulled back on me a little bit But I'm I've taken profits on this. So this is a profitable trade. I've just got one position open Small position open. So we're looking hopefully, you know, if this is the move then excellent I'm looking to trade it down back down to the to the one of fives. So hopefully that is going to Go into happen. And if that's the case, then that would be a nice I've got in it. Yeah, actually on the clothes of this daily candle and so yeah looking at Maybe about a thousand pips just under a thousand pit move on this trade. So why am I short on this and it's because For various reasons, but the end up in short really for for months since probably around about april and the pound dollar in terms of my bias, but um dominant hunt so quasi-quarteng was sacked and Jeremy Hunt is the new chancellor And Jeremy Jeremy Hunt refuses to rule out new U-turn on trust taxes So trust hunt meets sunday at prime ministers country residents UK will account for every penny to reassure markets hunt says and so chancellor of the exchequer Jeremy hunt said nothing is off the table when asked If he will abandon More or more of prime minister Liz trust his tax cuts plans confirming that he is now the leading government voice of the UK fiscal policies So, you know the market the bond market didn't like quasi-quarteng and this trust is Tax policies and so the market, you know, pretty much dictated and said, you know That you're gonna have to do something a bit better, right potentially U-turn and Goldman Sachs has As you know, it's downgraded UK growth outlook after you government tax U-turn so analysts at US bank Lower their forecast for the Bank of England rate hikes a more significant recession now expected analysts say so again, it's not looking great for the For for the UK and as much as you know, there's there's a main there's a there's a tends to be a dominant focus on the dollar And what the dollar is doing again, you have to consider who is worse than the Then then the US right who is in a worse situation than for me Um, it's proven I've been saying it's weakened week out that the pounds in the UK and Europe are in a worse situation than the US And if you've been following me for any length of time and you can see and look at my past You know Sunday videos go back all the way to the beginning of the year and see that I've been saying, you know, basically Buy dollars and I really I mean the pound was actually decent until maybe around about April and in April I definitely changed my mind on the um I'm buying the uh on the pound and started shorting my bias was to short the pound from here And so it was just, you know, looking at, you know, pullbacks. That was pretty much, you know And you can see what's happened. So the dog with the least fleas is actually the at the moment currently is the Is the Fed um and the and the US economy regardless of what the headlines say and so, um Hopefully, you know, this really does follow through so um deeper recession predicted by uh, Goldman Sachs. So If you are looking at any pullbacks, so if prices do come up, I'm not saying that prices are going to, you know, go You know fall to the floor because that's not how prices, you know, typically work but if there are any pullbacks then, um That that should be looked at as buying opportunities. I'm looking at that as another buying opportunity for the dollar And to get short and the re-entry if I get stopped out of my final position Um, and I'll look for another entry for for for short trades But if you are looking at long trades, then you're looking at the earliest is going to be the 107s to look for a um a buy trade there and again, um Some maybe some positive sentiment out of the um out of the uk or you know, a policy change that the market really likes Would maybe be a short term buy for for the uk, but then I'd have to reassess that um as it comes out um Euro dollar so the euro dollar pretty much same situation as the uk uh euro the euro is and ecb interest rate hikes must persist into next year Kazakhs says so 125 to 150 basis points of rate uh increases needed by the end of the year balance sheet reduction should also pay Play a role in 2023 So governing council member, uh martins, uh, kazak said interest rates should be raised Beyond the year and the time when economists increasingly expect the euro to be in the midst of a recession So again, you know, that's that's telling you that you know towards the end of the year you know and If you're hiking in the recession you only make the recession worse So the europe again europe are in in the euro zone are in a really tough spot at the moment a really bad situation in my Opinion and so for me, it's really just pull backs into Uh pull backs into um Areas like the 95 i'm sorry 99 1 cent area even above for me is going to be decent for Any short trades uh to kind of get in I wanted to get in Here but it didn't actually hit that supply zone if it had come into that supply zone Uh would have got short here Would have looked definitely for an entry here, but unfortunately just didn't do that But if it does come back up here, I'm looking for uh some shorts Of course again anything can happen if there's some positive news that comes out of and lots of positive news starts coming out of Europe then maybe you want to look for you know buy trade and the cheapest and the bargain price would be somewhere down at these lows uh right here But uh for now part of these resistance Is to the downside Moving on to the to the ozzy dollar and ozzy dollar again since the um Well since risk off really I mean this year the dollar being the u.s. Dollar being the dominant currency, but then um last week We did have a um a surprise hype in terms of the amount of um I think it was a 25 basis point hike rather than 50 basis point hike as the market was expecting from the rba Has just contributed to you know the australian dollar getting weaker So for me any pullbacks into A supply zone are uh really just the the buying opportunity that you need for the u.s. Dollar So continued shorts all the way and you know and again more risk off In a risk off environment the u.s. Dollar will just you know Is will appreciate as money flows into you know the uh the u.s. Dollar in times of uncertainty ozzy um ozzy yen again risk off situation Also as well you had um central bank intervention. So um the bank of japan intervening causing you know this to happen And so you know there wasn't a buying opportunity here But for me it wasn't really a buying opportunity could you know you can look at that technically as a buy But for me the path of these resistance is to the downside So I think any pullbacks into the 94 area I think is a very nice area to look for any kind of short trades And even better if it comes up to the 90s 60s because I do think with the dollar going higher Um and the bank of japan more likely to step in and if they do that's going to push you know, especially commodity currencies um Against the yen down even further So you could see actually a nice little pullback swing trade all the way down to the 87s If prices can come up to you know a decent supply zone and uh at least uh at least look for some sort of short trade There if you're trading any kind of uh risk off and gold finally gold so with the dollar being so dominant um the um You know gold you would think that gold is traditionally a headache against inflation Um an inflation being high so you think gold would be higher, but unfortunately The market is is more focused on um getting a yield from the dollar rather than um Uh putting their money into into gold and gold uh pairs drop off the us inflation set stage for big fed hike So if I if you know if you're holding dollars, then you're getting a yield, right? Whoever's gold doesn't pay a yield. I do think though that this is just a massive massive um And if you want to use the word accumulation, but this is definitely uh a lot of buying going on uh for from the banks I think because they see the recession coming right they see next year You've got the uk you've got the eurozone. You've got the um the us They're all going in you know the world is going into you know a recession right a potential recession You've got you know guardians of the world economy told to buckle up as outlook dims. So as um uh the federal reserves start to come to their interest rate hiking uh cycle right to the end of it Right probably towards you know the end of the year into next year um Then to fight inflation, but once that is over then um, it's my belief That gold um, this is going to be an absolute bargain for gold because the narrative is going to shift in terms of um In terms of uh risk sentiment recession that's going to be the theme and then gold would be in the spotlight once again, so It's just a buying opportunity for me, but from a trading opportunity um I mean, this is a really nice zone. Um, hopefully, you know, you can get something like that But I think that level may not hold if the fed is still just really kind of um, you know forcing through um rate hikes in terms of um a bigger than expected hikes. Um, and uh, yeah, I think that's pretty much it So, um, it's it's I do like um buying precious metals But at the moment trading precious metals is a bit of a headache For anyone who is looking, you know, any any of the gold bugs silver bugs Um, not a great scenario to be in from a trading perspective But if you're not if you just buy in the physical then this is just you know, absolute bargain prices to look for Just buying right so um So yeah, if you're looking to buy it, that's a really nice demand zone technically But if the fed are, you know, still aggressively hiking and I don't think that level's going to hold So any pullbacks into um, you know, pretty a supply zone right there Uh, and then another one, you know, even better would be at the highs This was you know, the best area to look for short trades if you were looking to you know Go short on the gold and buy the u.s. Dollar. That was fantastic picture. Perfect trade And then looking for any kind of pullbacks into 16 71s or even better 17 But again, that just depends on Feds hawkishness really anyways guys, that's it for this week Hope you're all doing well and have a great trading week. Uh, take care and speak to you all soon