VantagePoint AI Market Outlook for the Week of April 27, 2020
U.S Dollar Index
Hello, everyone and welcome back. My name is Greg Firman and this is the Vantage Point AI Market Outlook for the week of April the 27th, 2020. To get started this week, we’re going to begin where we always do with that very important US Dollar Index, a driver of the commodity markets, the equity markets, a number of different markets we’re running off of that US dollar.
We’ve had a decent week on the dollar and we’ve moved higher, but we’re getting all tangled up in this Vantage Point verified resistance. Very significant resistance around this particular area of the one 101, 101.30 area, and we’re looking to see if we can break through there. In most cases, what usually happens is at the end of the month, the dollar experiences a period of weakness, and then the first week of the new month, the dollar is very strong until after the payroll numbers. So if we look at our medium term crossing our longterm predicted difference, it’s starting to turn lower. We’re losing momentum up against a verified zone. So what we want to do here guys is be very, very cautious up around this 101 area. If we click on our F8, you can see the dollar hugging the Vantage Point predicted moving average where it takes the correlation of 31 other markets when it’s forecasting the target market. The theory here, if we’re above it, we’re long, if we’re below it, we’re short.
Again, we’re struggling to hold onto this line, that key pivot area 100.33. I would look for that level to be breached by probably Tuesday or Wednesday.
With the global equity markets, the one thing we’ve seen here is the equity markets are moving higher, but there’s a very powerful inner market correlation behind the scenes that, in my respectful opinion, is helping to drive the S&P 500. Currently, we’re holding above 2795, but again, very strong resistance in this level, up or about this 2884 area. That’s an area that I’ve talked about over the last several weeks prior to it coming to this level. Once again, this is an outlook, not a recap. We’re not talking about things that have already happened here guys, we’re talking about what’s going to happen. So when we’re doing that, we want to identify key pivot areas for the next week, which I’ll go into more as we get into our Forex pairs. But our key level right now, on a long predicted, is 2795. The intraday level that we look to trade off of, the blue line here, it’s been struggling along here. It’s been unable to really hold above that.
We’ve had a rally up on Friday, but mostly we’ve had a down week. We’re closing above that key level, that level’s coming in at, or about, let’s just back this out here for two months so we can see that, once again, our long predicted coming in at also 2795. So to start the week, 2795 is a very big level.
What I’ve noticed as of late, is a very strong correlation between the S&P 500 and Bitcoin. They both bottomed out at the same time, they both recovered at the same time, excuse me, but Bitcoin has been much stronger in my respectful opinion. I’ve been a strong advocate since basically the latter part of 2018 the early part of 2019, that there is a trade here on Bitcoin. If people like Warren Buffett don’t like it, then they don’t have to trade it. But there is definitely what appears to be a very good asset class forming here. So when we look at Bitcoin, we want to keep an eye on this one next week too. We’ve got 7378, if we click on our F8, which again is a very important intraday pivot, we can see that as we broke above this blue line take going up above the 7013 area, Bitcoin has rallied all the way from 7013 to where it currently is now just above the, well, just above the 7500 mark. So that’s one heck of a good trade here guys, don’t let anybody tell you otherwise. If you’re a pro Bitcoin, that’s fine. If you’re against Bitcoin, that’s your prerogative, but just don’t overlook what potentially could be a very good investment.
Now with gold this week, once again, we’re looking at our key levels. Once again, we can see 16.99 is our main pivot area, but again, if we click on our F8 and use our blue line individually, we can get that intraday pivot area we’re looking for. 1727, we need to hold above that. I think gold should remain fairly firm until the end of the week, but then I would look for a reversal on gold short term based around US dollar strength at the first week and then into the first week of the new month. Very important to identify these correlations. What has been very odd, I will say, is that since we’ve had the, coronavirus gold and the S&P have literally been almost moving up and down together. Very, very strange correlation since the virus. So again, as the US economy starts to reopen, expect a very volatile week next week. I believe we’ve got the fed next week. We’ve got, I think, some GDP numbers. I’d have to look at the economic calendar for next week, but it’s a pretty full docket guys, so expect volatility in gold.
Now with oil, I’ll touch briefly on oil here. We’ve talked about this one. Again, remember the media guys, the media really does tend to spin things a little bit out of control here. We had oil that came down. The June contracts came all the way down to $6 a barrel, but that was very brief guys and that’s because the media was spinning the negative oil prices because of the expiry of the May contract. So oil did not go negative here. When the May contracts were going negative, light sweet crude oil was still trading at $23 a barrel. But you can see how the media wound everybody up, and the very next day after the expiry of the May contracts, the June contracts then dropped all the way down to six bucks a barrel. So, again, the power of the media, the influence is quite something, but there is an extremely large supply and virtually no demand for oil right now. So if the US economy is starting to reopen, maybe we can get oil moving again, but my optimism on that remains guarded. But right now we’re up against a critical vantage point, resistance level 17.41. If we can break through there, hold above this blue line, you can see the medium-term crossing the longterm predicted difference with the neural index, still a good short term long on oil, but a very, very dangerous one at the current time.
Now as we go into our main Forex players this week, once again, when we look at the Euro, we talked about this last week guys, and what I try and do at the beginning of the week is to identify the key levels and say, okay, if we’re below this level, we’re short, we’re above this level where we’re long. I would expect, again, that the Euro US could retrace a little bit higher next week prior to the main dollar buying period, which would be into the first week of May. So when we look at this right now, again, our T cross long is one 108.76 we identified this from last week at the 109 area, our key vantage point intraday pivot area that I like to use to buy and sell from, you can see here if we go back one, two, three, four, five days. If you’re trading this at the beginning of the week based around being underneath that blue line, which I discussed, then essentially it’s a pretty easy trade most of the week here guys. If we look at this and we just draw a line from point A to point B, as long as we’re short, below that, whether you just took a single contract that again is $1,157, 125 pips, that’s what the Euro did for the entire week. Or you can sell it for you intraday traders, just keep selling, sell it, make 30, 40, 50 pips, and close it. Go in the next day, do it again. Then the next day, repeat, wash, rinse, and repeat. Guys, keep doing it so you can actually make a little bit more than 125 pips potentially doing it that way. But if you’re just doing that single contract, everything looks quite good. So for this week, we look at doing the same thing. We’ve got 108.32. In my respectful opinion that is likely to be breached because of what I’ve talked about with the dollar cycles. So I would look for the Euro potentially to break above the one 108.32 area, and if it does, then we should have three or four days of decent buying, but towards the end of the week, I would expect the Euro to come under pressure yet again. It is anything but out of the woods here.
U.S. Dollar/Swiss Franc (USD/CHF)
Same with US-Swiss Franc. We talked about this one last week too. When we look at this and we bring in our main support levels now, 97.,27 could be a little difficult for that to hold that particular level, but we want to identify our key pivot areas. Once again, when we look at this, we’ve got 97.27 is our long predicted. Our long predicted and our T cross long is in the same place at 97.27 that represents two ways to trade this guys, we can buy off this particular level or we can sell a break of 97.27 we’ve got a verified resistance zone up here. When we look at the indicators, the neural index is still green, so I would like to see the neural index go from green to red and I would like to see the medium-term crossing the longterm predicted difference before I get aggressively short this particular pair. And again, if you are shorting this pair, keep a very close eye on Bitcoin. If Bitcoin is going up, chances are US-Swiss Franc is going up. If the S&P 500 is going up, the probability is US-Swiss Franc is going up. So keep an eye on that and as I always say, guys know your levels. 97.27, that’s a big level to start the week. Now what the pound dollar, again, the pound dollar simply could not get moving here at the beginning of the week. If we look at this one, two, three, four, five we go up to here. So we talked about the main level at the beginning of last week’s presentation saying, okay, 124.19 we have to hold above that if long stand a chance here. We didn’t hold above that. We then crossed below.
British Pound/U.S. Dollar (GBP/USD)
Again, back here, you can see the market closing below that blue line by itself. So if we look at this and we count it right there, we’ve got a two day close right here below that blue line. What I usually like to call a two day rule. When we did that, we had a big shift to the downside. But in my respectful opinion only, remember I’ve talked about this in the past. The British pound has extremely high correlation also to oil. When oil took that big move down, you can see that US Canada went higher and the pound dollar went much lower. So as oil starts to recover, if you look at this particular chart, you can see that the difference between the oil chart and the British pound is very, very similar.
U.S. Dollar/Japanese Yen (USD/JPY)
Okay, so for now we would be looking for the pound dollar to break and hold above 123.82 if we can break and hold above that particular level, then we have a real shot of going back towards the 124.83 area, where we’re likely then going to find resistance. Now, right now we can assess that our neural index is positive or [inaudible 00:11:13] on the rise and our predicted differences are starting to very slowly roll back over. So our main goal this week today is to watch that critical level of 123.82. Now with the dollar-yen, I believe that next week should be the week there’ll be some type of catalyst that’s going to break this out of this area. In the live training room what I’ve suggested here as a decent play is simply straddling these areas. We’ve got a very known resistance at 108.08. We’ve got crystal clear support at on 106.93. I would highly recommend straddling either side of that and wait for the breakout or be very cautious trading within this little channel.
he vantagepoint long predicted, again, coming in at 107.65, a very big level. So when we look at that again, we want to make sure that we’re identifying these critical levels, but again, 108 is still strong. Our neural index is very mixed. Our RSI is suggesting we’re going lower. Once again, keep a very close eye on Bitcoin. Bitcoin and the S&P 500, if they continue to recover, dollar-yen will continue to hold above 106.93 but again, we’ve got the FOMC this week. That’s where you’ve got to be cautious. Any rhetoric from the fed could have a very… I believe that the fed will be the catalyst that will break us out of this range, this sideways chop, but again, be very, very cautious with this pair next week.
U.S. Dollar/Canadian Dollar (USD/CAD)
The US CAD also very much determined on where we go with the equities, with oil, so if the S&P 500 and oil can continue to recover, then the US CAD could potentially break a little bit lower. But my optimism on that is heavily guarded. The Canadian economy is still shut down, still underwater with the COVID virus. We’ve got a lot of problems here. As far as I know, it’s going to be at least the bigger parts of Canada, like Quebec, Ontario, they’re not opening up, I don’t believe until about May the 12th, and even then I’m not getting confirmation on what is opening. So this is a negative for the Canadian dollar. Oil prices below $20 a barrel is very much a negative for the Canadian dollar. That inner market correlation is strong. However, we do have the medium-term trying to cross the longterm predicted difference. We’ve got the neural index is still down. We’ve got the RSI is at 51.3, it’s not confirming we have momentum here. So when we look at our blue line by itself, I’m looking for a two day close below this area. Now, right now I do have a two day close, so I would anticipate the initial move on Monday will be down, but as I’ve stated many times, US Canada is notorious for a Tuesday reversal, whatever it does on Monday, if it makes a big move up on Monday, it retraces at least 60% of that on Tuesday. If it makes a big move up, then you get the other way. But again, this is a phenomenon with this particular currency pair, which I’m unclear on what’s going on with it to be honest, but I do see it almost every week. Now, last week we didn’t really see it. We continued on and it started to sell off on the Wednesday, but the initial move from Monday was not sustainable.
So for this coming week, we want to watch the 141, excuse me, level very, very closely. Can we stay above it? Do we stay below it? But that’s our main focal point. Our main revision point will always be the long predicted. The further it moves away from it, the more likely it is it’s going to retrace back to it. So these are things that we understand mean revision and trading is a common thing. The market becomes out of balance because of an announcement from the fed, maybe an announcement on the COVID virus, all these different things. And there’s going to be headline announcements next week. With the US opening their economy. I’m not sure how the media is going to try and spin this, whether it be good or bad. I would anticipate the media will spin it poorly.
Aussie/U.S. Dollar (AUD/USD)
So again, you have to take that into consideration that you know it could go the other way very quickly, so keep an eye on that main level. Excuse me, Aussie US and New Zealand US, we’ve had a good recovery on both the Aussie and the New Zealand but we are coming up against very formidable resistance again, here. We have that resistance at 163.97 and again at the high here which is coming in at or about 64.44 Area. That is the area that I would watch for potential shorts. Now again, the Aussie is going to react to a risk on or risk-off environment. If everything is good with stocks and Bitcoin is still going up, the dollar starts to soften a little bit. Oil recovers a little bit. Those are all good things for the Aussie, but if those things do not happen guys, then the Aussie is going to fail around 64.50 so keep a close eye on that. Right now the indicators are quite mixed here. When we come back and use our blue line by itself. We’ve got a two day close above here, but again we’re up against very stiff resistance at 64.44 and again even stiffer resistance when we get up to this area at 66.84. I’m confident that we will get to 66.84 but I’m not confident that it’s going to be next week or the week after.
New Zealand/U.S. Dollar (NZD/USD)
Now at the same thing would apply with the New Zealand currency for next week. Again, not quite as strong as the Aussie, it’s getting all tangled up around the T cross long so when we look at the T cross long we can see there is a new feature from Vantage Point that actually I just noticed which is pretty cool. The long-predicted is now on our main screen, which is excellent kudos to Vantage Point for doing that. That’s funny. Even I just noticed that. Because I wondered, I thought I had just said T cross long twice and then I went to look for the long-predicted, it was the same number. So you have this additional powerful pivot area now on the main screen of the Vantage Point software, the long predicted. So when we look at the long-predicted and the T cross long, we can visually see these two numbers side-by-side. Six 60.08, 60.06, that’s where all of our resistances guys. We’re closing at 60.13. It’s a very weak close. So now if I come back here and I click on the blue line by itself at 60.06, you can see that even though we’ve had a decent week on the Aussie, we’re really just trading sideways, aren’t we? Or on the New Zealand here, we’re just trading sideways on the New Zealand. So again, this is more about the Aussie New Zealand pair, the cross pair, the Aussie New Zealand cross pair, has been moving higher, putting that downward pressure on New Zealand US.
So we have a very, very choppy week ahead of us. So the one thing I will always say, guys, make sure you know your levels. So with that said, this is the Vantage Point AI Market Outlook for the week of April the 27th, 2020.