 Hi, my name is Leon Rowe, currency trader and trading coach at Trading180.com. Welcome to this week's supply and demand for us in Gold, Fundamental and Technical Analysis. Getting into the week ahead, the 24th of September and after a week filled with central bank meetings, attention will once again shift to macroeconomic data in the US. The spotlight will be on the PCE price index as well as personal income and spending data. Additionally, the focus will be directed towards durable goods orders and the final reading of the second quarter GDP, growth rate and spending and new home sales in Europe. September inflation rates will be released for the Euro area in Germany, that's quite important. Finally, investors will set our asset to monitor LFO business climate, GFK consumer confidence and retail sales figures for Germany along with industrial production, retail sales and unemployment rate and consumer confidence and that's all pretty much important and in terms of GDP and the Bank of Japan Monetary Policy meetings, so in Japan, so that's all from TradingEconomics.com. A lot of the major banks announced whether they were hiking or holding last week, which we'll get into and looking ahead, all that central bank announcement is out of the way and so now it's all about the data supporting that narrative, that's what's really important. If you are in the mentoring group, by the way, if you go to the Trading Videos channel in the Discord area, Trading Videos channel, I've uploaded I think about nine videos this week. We've also got in-depth weekly fundamentals and in-depth technicals as well as, like I said, another eight or nine videos this week, including the live group call where we went over, again, really in-depth fundamentals and trade setups. So loads of videos in the Trading Videos channel for you to watch and also as well, if you do want to get involved in private mentoring, I will be opening Discord group up on the 4th of October. I know many of you have been asking, it's going to be for a limited time only, by the way, I'm not going to be opening it for long and it might actually probably be the last time I open up this year. I might open it in December, maybe not, depends. But 4th of October, for maybe a few days, so if you have been wanting to learn really in-depth fundamentals and supply and demand concepts that aren't really taught online, go to Trading180.com and the moment starts on the 4th of October. So getting into the technicals, right? And so starting off from the Dollar Index and overall the Fed held, it was a kind of hawkish hold in September. Now is there, is still a hike in November and so Fed signals last week that the higher for longer rates with rates almost, rate hike, sorry, almost finished. And so Federal Reserve Chair Jerome Power made clear Wednesday the central bank is close to done raising interest rates, but his colleagues delivered the message that resonated, borrowing costs must remain higher for longer amid renewed strength in the economy. And if you've been in the mentoring group, you would have known this for quite a while, matter of fact, we've been buyers of the dollar. And the higher for longer narrative is something that again I pointed out a few weeks ago. And really to kind of explain it and why it's supportive of the dollar is because imagine you have two central banks basically, right? You've got a central bank and you've got bank A who is holding rates, right? Who is holding rates. But what it was was that let's say for example this was first half of the year and this is second half of the year. So this is Q, I mean Q1. So this is, this is H2, let's say, second half of 2024. All right, so 2020 2023 and this is H first half of 2024. Yeah, so this is 2024. Right. Now, so, so because the data and the economic data has been supportive of rate hikes in terms of GDP growth, right? So the forecast was that in fact GDP was supposed to contract. Therefore, there would have been rate cuts, right? Because rate cuts typically follow contractions in the economy. Yeah. But imagine that was the projection, but now it's not. Now it's the fact that they're going to be holding rates for longer. Yeah, so rate cuts were expected due to GDP contracting and that was the old forecast. Yeah. But now the new forecast, yeah, based on the data is that in fact they're going to be holding rates for longer. Yeah. So, you know, we're obviously second half of the year of 2023. And so this is the new, you know, the new forecast. This is actually supportive of the currencies of this should keep the dollar appreciating, right? Because they're no longer looking to cut rates, that was the old one. And now the new one is that they're going to hold for longer. So when you start hearing other central banks talking about holding for longer and higher for longer, it's really about the interest rates, obviously staying higher for longer and the fact that potentially the economy could also as well avoid a hard landing. And so you're seeing soft landing narrative, right? So soft landing narrative. And so soft landing in the economy is that, you know, we could basically, obviously we're going to contract, but we're not necessarily going to go into a deeper session. So this is what's happening with the U.S. Yeah. And I meant to do a comparison matter of fact. Can I undo? Excellent. Yeah, I can undo it. Yeah. Now imagine compare that to, let's say, another currency, another country. Let's say, for example, the Euro, right? So the Euro, maybe, you know, they were expected to potentially hold for longer now. In fact, I'll do it like this. Right? So let's say, you know, first half of the year, this was going to be the forecast. And, you know, they were maybe looking to hold, right? But now in fact, the new forecast is the fact that they could start to cut rates due to economic contractions, right? So this was, again, we're going to, this being the old forecast, oh, LD, right? And this is now the new forecast for, you know, the Euro or whatever, you know, central bank, right? So they're looking to cut sooner. So the market has to price in the new forecast based off of what is happening in the economy now in the data. And so they're pricing in cuts, but pricing out cuts for the U.S. dollar. And so there is another type of diversion when it comes to interest rate and monetary policy. This is some stuff that they don't really teach you online. You won't really find that information online by a typical retail trader anyways. So going back to, sorry, this, and that's basically what's happening here. And that's what is being explained here. So this is after a rapid series of rate hikes over the past 18 months, the Fed can now proceed carefully. Powell said a sentiment he repeated at last dozen, at least a dozen times on Wednesday during a press conference that followed the central bank's decision to leave rates unchanged. And so, you know, that it says here that the in quarterly economic projections released following two-day policy meetings. 12 of the 19 Fed officials said that they set expect to raise rates once more this year. The bigger takeaway for investors was the revelation that policy makers see fewer rate cuts than previously anticipated in 2024, in part due to a stronger labor market. And so basically they're saying that the soft landing scenario is going to be met with tighter policy. So Brett Ryan, a senior U.S. economist at Deutsche Bank AG, that was the main takeaway. So that, you know, along with, you know, resilient economy, et cetera, is supportive of the dollar. Of course, the data has to support the narrative. But for now, the dollar remains for me a buy in my book. And so any pullbacks, right, doesn't mean that because it's a buy that it's going to continue going higher. In fact, kind of expecting a bit of a pullback with a dollar to get weaker, you know, at some point, because, you know, you've just seen this, you know, prices pretty much make higher highs, high lows with no major pullback. So I think we should get at least some sort of pullback at some point, whether it's this week, next week, the week after, who knows. But once it starts to pull back, then I will start to initiate more buys. So the dollar for me is a buy. Dollar yen is another interesting one. Prices are going higher now. The yen Bank of Japan, Ueda, came out this week and he tamps down on speculation of rate hike and pressuring the yen. So he remained dovish. Officials keep policy unchanged as expected by economists and yen weakness outlier stance on stimulus set to continue. So Bank of Japan governor, Kazuo Ueda, tamped down on speculation of a near-term interest rate hike after the central bank chose to stick with his ultra-easy stimulus, a decision that renewed downward pressure on the yen. So the market was hopefully, well, hopeful that, of course, there was going to be maybe some sort of hawkish phatoric, which would push the prices down. Central Bank's not doing that. So now I think it's all about intervention. As prices start to go higher towards this 150 area, it's likely that they're going to intervene. Now nobody knows if it's going to be right at 150 or even 151 or even 152, even 153. But we're in that intervention zone. And so when you look at what happened last year in September and October, basically they intervened in September. And for the first time since 1998, it didn't drive prices down. But then when they intervened again the second time, beyond 150, that's when prices pretty much went like 2000 pips to the downside. So we're up at this zone again. That could happen. Let's see, we're in that zone, right, where they could start to intervene to try to support an undesirable weak yen. So we're in that zone now. So look for, if you are looking to get ahead of that, look for some short trades, probably go with a wider stop. It'd be difficult to go with any kind of intraday trades. Probably look at more higher timeframe entries and look for potential for some downward moves and looking to really kind of be in a trade before the intervention. Because by the time the intervention comes, it would probably be, I wouldn't necessarily say too late, but you know, you might have missed a bit of the move and you know where your stops have to be placed might be a bit disadvantageous. Anyways, you can make arguments for both cases for either buying or selling. Personally, where price is, I prefer the opportunity to try and look for short trades on the dollar yen. And so let's see, you do have in fact, quite a large demand zone here, but within that demand zone, a technical demand zone, you do have an area of support and resistance. You've got one there. You've also got one right there as well. So I think those are really the areas to look for any kind of buy trades. If you are looking to buy the dollar and we get a bit of a pullback, but if, you know, let's say for example, the Bank of Japan intervened, then all bets are off the table. There's no technical level that, you know, is going to stand in the way of intervention per se. So I would rather if price is just pulled back naturally without, you know, the, without the Bank of Japan intervening, then, you know, these, I think these areas are decent areas to look for some short term long trades. Dollar Swiss and the dollar Swiss has just been going to jump, just jump up and looking for an entry, a decent pullback, but unfortunately have not got one. So we are up into these demand zone or supply zones here. So we've got last time there was a demand zone is down here. So for me, still looking for a pullback right into, you know, this area here before trying to establish any kind of long trades, there is horizontal support as well in that zone. So that's quite nice. You also do have, I think, a bit of trend line support as well in that zone. So if prices do come back down into this area, you've got definitely also technical analysis in there to support your buy bias. As if you are buying, you know, have a buy bias, the Swiss Frank did hold rates surprisingly. And so you think that this is the end of their hiking cycle. So they've reached their 2% target in terms of inflation and really, and they had a contraction in GDP. So there was really no reason for the Swiss National Bank to want to, to hike rates. I was scratching my head when they kept being hawkish about it. But yeah, it didn't make any sense. And obviously that came out and yeah, the market didn't believe them. So well, the market believed them, but they basically changed their mind on being so hawkish. So for me, any pullbacks of buying opportunities on the dollar Swiss dollar CAD, the Canadian dollar is going from strength to strength really kind of based on better than expected job reports and also as well higher than expected inflation that came out recently. So there is, there is trying to think why did I put that as demand? But yeah, there is that going on. So in this world, you've got higher oil prices. So if higher oil prices, you definitely have, I would say, I'll ask the reason why I put it, I think it's because it was there. That's where it was. Yeah, you've got better than expected economic and inflation data, which is similar to the market that there could be the potential for a rate hike. So against the US dollar, I don't really like taking this trade simply because you've got two central banks who potentially could look to high crates. And so you're looking for more divergences. So if you do want to get short and buy the Canadian dollar, that's the first level, or you're looking at either buying the US dollar right there or right there. But for me, it's not really clear. So I'm not looking to take this trade. New Zealand dollar US dollar, I think this is an interesting pair. My bias is more to the short side, although we have seen better than expected GDP numbers come out of New Zealand. And so I think there's definitely some short terms positive sentiments surrounding New Zealand dollar. And that could pull back to either these highs here or even beyond that to the underside here, the 60.5 areas, well, sorry, 0.605 area. But I do think that the dollar does have the edge. But yeah, there's the New Zealand dollar I think is a buy against probably another currency like the Swiss franc. So yeah, but for this currency pair, I think more short side. So either the top end of that supply zone there or up into the underside of this supply zone around here. So let's see what happens with that. The pound dollar, pound dollar this week has been very interesting, had some really some nice trades on this actually traded a one minute chart for the first time in ages for a very long time, we were buying actually at lows. And that worked out to be a really good trade, by the way. That is, if you are again, I'll remember, I explained the trade on the 21st of September, talking about the GDP rate hold short, so expensive levels explained. And then the next day I gave an update, you know, basically short and at lows buying at highs, GU and GA. So both of those trades, the GU and the GA worked out to be nice trades on a one minute chart, some good risk reward on that. And yeah, profitable this week on both of those taken advantage of the the rate hold, which we saw as the traders fret Bank of England paused to hurt pound as inflation still a threat. So pounds lies to six month low at as BOE Bank of England rate hikes grime to a halt investors warn rising energy prices strong labour market. Now the pounds slumped to a six month low and guilt fell on and that's basically guilt saw basically government treasury bonds fell on worries that the Bank of England is being too timid in his fight against inflation, setting the nation's assets up for further losses. The concern is that by keeping rates on whole Thursday, the Bank of England is underestimating a host of factors that still threaten to push consumer prices higher, focusing instead on softening the blow that time tighter policy is having on the economy. So this is bad for both sterling and guilt. As we know, as they are taking risk with inflation, as the pound is falling, the Federal Reserve is hawkish wages remain strong and the labour market is still hyped. So let's see. So the pound slumps off the Bank of England rate hike pauses rate hiking campaigns. So, you know, the, you know, anyone who says that fundamentals don't work, you see any evidence of it here, right? It's, it's what basically moves price. So traders are already turning bearish on the pound ahead of Thursday decision with the market effectively spit on whether the Bank of England would raise rates or not. And now with another no hike longer, sorry, hike no longer seen a certain that outlook is looking increasingly bleak. And so for me, oh, don't know why we're not that, but basically the, the point in it is or was, yeah, that the pounds is basically, you know, they, because they held, it was seen as a bit quite dovish. And so the market has to price out the hike that was, you know, expected by 50% of the market. And so we ended up going to the downside. Now, I think any pullbacks into this supply zone here is going to be really nice for a short trade. So a pound dollar either up into that zone there, or you're looking at if it goes further up into the one, two, five, I think those zones are going to be really nice for a short trade. Again, just hoping that the data for the US is still continues to be strong, then that should be actually quite a nice short trade at that level. So that's where I am with the pound dollar, my buyers, pound yen. Again, still looking at short trades on this in line with trying to get really short and anticipate intervention while I'm in the short trade. So let's see what happens there. So if you do get a pullback into, in fact, it probably more is a new zone. In fact, let's have a quick draw. So it will be from here. So it's all that basically right there. Let's just delete this one here. So any pullbacks into this zone, I think underside of that zone is going to be nice for a short trade. Yes, the Bank of Japan is dovish, but keep an eye on the dollar yen. And if the dollar yen starts to reach 150, 150 ones, and they haven't intervened yet, and then you start to see the same thing happen here, then I think you might say, well, I mean, I can't tell you this is a financial advice, but I would definitely look for some short trades because, as I said, the 150s are where the 150 ones are where the central bank of Japan are looking to intervene or the market is expecting them to anyway. So that should push the yen down across all currency pairs. Euro dollar and Euro dollar, some really nice trades this week. In fact, I did post a trade in the group. Let me just see if I can find it quickly. Yeah, so here it was. It was on the 15th of September. And we were looking at how I posted this trade idea, this trade setup, and made a video for the private guys in the mentoring group. And we're talking about this being a capture pain relief CPR trade setup. And you can see it actually, in fact, this ended up working out really nicely. If you go down to like a lower timeframe chart, basically, this was the trade. So looking at that zone, that was it, right? It was really from around here. That was where the supply zone was intraday. Yeah, go back to that chart. That was pretty much it. I was saying it kind of starts from around here, but really, you know, it was, you know, the level we're looking for is around these highs. So again, no one knows the exact turning point, but I knew that this zone was a powerful zone in terms of supply. And so pretty much that's what happened around here. And then got nice, I know some traders end up getting in on that. And yeah, really nice trade to the downside. Anyways, so that was that. And where are we now? Again, bias is really to the short side. I think really if we're looking at the Euro dollar, again, more short trades, right? It's just, I can't see the reason to want to buy the Euro. We technically are making lower lows from around here, not the sexiest chart in the world in terms of supply and demand zones. But yeah, I would really want to wait for prices to kind of pull back into any of these areas here. And especially if you've got maybe some sort of horizontal support and resistance within certain zones. So just zooming out a bit, you can see that there is a nice little zone there. You can see it's quite obvious. So up until those 108, maybe 107, 70s, I think, along with that supply zone, I think that's going to be quite nice. But fundamentally, the Euro zone, it says here that Euro zone inflation eased last month revised data show. So inflation is coming down, which is good for the central bank, but also at the same time, you've got weak Euro area PMI suggests economy facing contraction. So basically, German and French economies, key drivers of regions downturn. So those, you know, the economy is better to contract. So that's the reason why the European Central Bank are less likely to hike rates going into the rest of the year, because their economy is contracting. And to hike rates, you really need your economy to be growing or at least be able to support rate hike. So I do think anywhere around this 107, 30s at the very earliest up to maybe the 108 is where prices are likely to stay. If it does go up to the 109s, that'd be an absolute bargain, I think, unless something again, you know, materially changes in terms of, you know, there's some bad news for the dollar and some really good news for and, you know, not just one data point, but really good news and continual news for the Euro, even things around China and growth, then I think, you know, the Euro could possibly be a buy, but for now, it doesn't look like it as the economy is contracting quite a lot, but it doesn't look good in comparison to the US. So for me, shorts all the way just depends on which zones we're looking at, either the 107, 35s up to maybe the 108s would be really nice to look for some short trades. Euro, yen, again, my bias is to get short on this if prices do come up as well. I'm looking for some short trades. I think the highs around this 159, 50s is very, very nice for a short trade, especially if, you know, I'm in that trade and they start to intervene. The Bank of Japan start to intervene. That would be a really, really nice trade. I'm hoping that I am in that trade before they do intervene. So let's see what happens for the Euro, yen, but if you do want to be a buyer of the Euro, then you can get long, I probably wouldn't start looking for this. There is a stop hunt trade below these lows, but you're probably looking at that demand zone as a long trade. Euro, pound, both currencies I think are on the weak side, not really interested in looking to take this trade or trade this pair anymore. Yeah, it was looking a few weeks ago like the pound was had the edge, but now, I don't know, I really don't know fundamentally. So I'm going to stay out. You do have some demand in these areas. You've got demand there, you've got demand in and around here and here. And so if you do want to be a buyer of the Euro against the pound, then you're looking for a pullback into those 0.86 areas. Or if you're looking to be a buyer of the British pound, then you're looking at probably now or maybe a deeper pullback into that technical area, which is actually very nice from a supply zone, but also we've got some added horizontal resistance support and resistance in there as well, but not a pair that I'm interested in trading. Also as well, you've got the Australian dollar. So the Australian dollar, doing okay, I think. You could start to look for reasons to buy the Australian dollar, but I think for me, I think the catalyst to buy the Australian dollar would be a recovery with China, but it doesn't like it's happening at the moment. So I think my bias is more to the downside. So I think any kind of stop hunt or trade into this supply zone, I think is going to be really nice for a short trade. If you are looking to buy the Australian dollar, then I think again, a pullback probably into a deeper demand zone is going to be where you're looking for. And it's also a bit of a stop hunt level to be stop hunted just below that, so the six, three, fives. So yeah, but my personal preference is to look for short trades if I'm looking to take this currency pair and gold. So gold, I think it's going to struggle for a little bit and I say struggle, but probably more auction in the short term with the dollar being quite strong and soft landing likely to be the outcome or the projected outcome anyway. It looks like a recession or a deep recession could be avoided and so risk less off, although risk is more off than anything simply because of China, but I think the dollar benefits because the dollar gives a yield plus as well, you've got treasury bond yields at their, you know, some of the highest levels they've been for years. And so why hold gold, which doesn't bear any interest, and you can either hold treasury bonds at probably what 10 year at nearly 5% or something, or is it the two year at 5% and so yeah, money might be flowing out of gold for now, of course, but if there are fears of the, you know, economic contraction and start to gather pace, then I think these areas are decent buying opportunities. But I think for now with the dollar doing well, the data supporting the dollar, I think the downside is more compelling than the upside. So let's see what happens in the short term. Obviously, you know, over the medium to long term, gold is always a bias, it's a hedge against the inflation and currencies, because at some point, you know, you have an economic cycle, which basically you have, you have, you know, expansion and the boom phase, and then you have the contraction, then you have the bust or slump phase and the recessions, and then you have the recovery, and then you have the expansion and then the boom again, right, and it's like basically it's the cycle that happens. So we'll see what happens, you know, over the medium to long term, but I think in the short term, gold is a, is probably likely to be a short, if you're looking to trade gold, that's just my opinion, of course, not financial advice, because money really isn't flowing into gold. If you've got, like I said, bonds are, you know, yielding a higher interest rate, and just for holding dollars, you're getting somewhere like 5%, right? So, you know, money flows into and out of different asset classes, and the question you have to ask yourself is, why is, you know, money going to flow into gold, right? Why is a big money looking to buy gold? So of course they do, and they obviously hedge, but at the same time, is it going to be enough to really kind of drive prices higher when, you know, recession fears are fading, rate cuts are fading as well. So yeah, for me, it'd be more looking at short trades on that, on gold and silver. Anyways, guys, that's it for this week, just a quick one as well. I'm not going to be around for next week. So I'm going to be away, I'm going to be out of the country on holidays. So next week, I will not have a weekly video, but I will be back on, sorry, yeah, no, Tuesday, the 3rd of October, and then the doors open for the mentoring on the Wednesday, the 4th of October. So again, it's going to be a limited time. I'm going to be open for, as I like to keep the group small and focused and concentrated. And so yeah, if you miss out this year, then you'll have to wait until probably next year before I reopen again. So guys, take care, have a great weekend and have a great next weekend, have a great trading week, stay blessed, stay healthy, and all the best. Speak to you all soon.