VantagePoint AI Market Outlook for the Week of August 19th, 2019
The Vantagepoint AI Market Outlook is designed to help traders. It’s important to remain aware of correlations in the global markets. Traders can become more profitable if they know how to get ahead of the trends. Utilizing the predictive indicators in VantagePoint Software can help traders find the right trades and the right times. Above all, traders know when to enter and exit those trades for maximum profit. Let’s look at the charts for the U.S. Dollar, Gold, Crude Oil, The Stock Market, Bitcoin, and Major Pairs.
Hello, everyone. Welcome back. My name is Greg Firman, and this is the VantagePoint AI Market Outlook for the week of August the 19th, 2019.
The U.S. Dollar
Now, to get started this week, we’re going to begin where we always do, with the dollar index. But what I will say is that in this weekly outlook, we will be looking at all of the major markets, including the major Forex payers, our equity markets, our commodities. Even Bitcoin, I think, is worthy of a look on our part. Now with the dollar index here, guys, we can see the dollar index remains range-bound. We’re holding down at the lower end of this verified support level, that coming in at $96.80, about the $96.80 area that we talked about in last week’s weekly outlook. And now the dollar is trying to move back to the range top, that coming in at or about the $98.70 mark.
Now, looking at the key VantagePoint indicators, they’re still showing further strength than the dollar, but again, a lot of outside factors that are helping the dollar here that are not likely to continue going forward. So we’ll continue to monitor the dollar index right now, but the dollar, again, remains largely range-bound.
The Gold Market
Now, when we look at gold, we can see that, basically, the dollar continues to hold its gains as long as gold stays below $15.46 at this verified top. Now, if we can break above $15.46, that should see the actual dollar fall and gold accelerate to the upside. But ahead of this week’s main event risk, which is, of course, the FOMC minutes, that remains very unlikely at this time. We’re likely to see gold correct lower towards 1486, where we would be happy buyers.
Now, both the gold moving higher, the dollar moving higher, neither one of these two is helping the equity markets.
Currently, the S&P 500, once again, holding below the critical VantagePoint level—$2,915. We can see multiple retests of this level over the last six or seven trading sessions with a more dramatic failure off that particular level coming on August the 14th. Now, this is something we’d talked about in the VantagePoint Live training room, determining whether the stocks were bullish or bearish. They are clearly bearish. When we look closer at this right now, going into next week, $2,915 is the level we want to watch. The indicators in VantagePoint are warning that we have potentially further upside, however.
Now, if equities can recover, we should expect oil will recover, also. Now, right now, that key VantagePoint level $55.05, but we’re closing basically slightly below that level. But just to be clear, oil is still following the global equity markets. so if they’re moving lower, chances are the equities are moving lower. If equities are moving lower, excuse me, chances are oil is moving lower, also.
Now, as we go into our major Forex pairs here, looking at next, the one thing we want to also take into consideration, which I think is becoming somewhat of a little bit maybe undervalued in this particular market, is Bitcoin. Now, Bitcoin, we could argue, is potentially that there’s a yield there. We could argue that there’s a flight to safety. I think I would agree with both at this particular time. Clearly, we have buyers coming in on Bitcoin. When we hit down into this … Anywhere close to this 9,200 mark, we see the buyers start to move in. So these verified zones identify that. We can see, again, back on August the 15th, we came very close to that level, and the buyers immediately stepped in.
Now, when I look at the VantagePoint AI indicators, the medium term’s starting to turn higher, the neural index going from red to green, and we can see a rising RSI. All of this tells me that Bitcoin is likely to move higher next week, guys, not lower, despite what we hear. We hear a lot of debate over Bitcoin. Is it real? Is it fake? What is it? Well, it looks real to me, guys, and that’s all that really matters. There’s an investment there, and we should be respecting that, right?
Forex Weekly Outlook for Major Pairs
Euro/U.S. Dollar (EUR/USD)
So when we go into our main Forex pairs, looking at the euro/US, still pushing lower on that dollar strength, but we are well within the range. 110.27 is likely we’re going to see buyers step back in on dollar weakness and gold strength. That’s the move that we’re looking for. So we’ll monitor it this coming week. But again, right now, when I look at this, we’re getting into an oversold condition already. We’re moving towards a range bottom, but it is still range trading, guys, at the end of the day. So what do we do with range trading? We buy the bottom, and we sell the top, and we ignore the primary trend for the most part. Again, the market is only trending 20% of the time. So there’s an 80% probability that the euro will rebound somewhere near the 110 level.
U.S. Dollar/Swiss Franc (USD/CHF)
Now, as we look at the euro’s main inverse counterpart, which is US/Swiss franc, we can see the market failing at the VP, stopping exactly on the T cross long, $98.05 on Friday, hitting that level, basically, like it hit a brick wall. And the equity markets paused at the same time. So for next week, if we want to buy the US/Swiss Franc … which on an interest rate differential absolutely is the right trade. The problem is in a risk-off scenario, nobody’s willing to bite on it, right? So if we’re going to buy this pair, we need a break of $98.05, but we also need the stock, more specifically the S&P 500, moving higher if we want to purchase this. Now, again, the long side is the better trade from an interest rate standpoint, but we can argue that we’re clearly in a risk-off environment.
British Pound/U.S. Dollar (GBP/USD)
Now, with the pound dollar next week … With the pound dollar, we’re going to see, again, resistance building at this 122 level off this verified zone, but that’s basically intersecting with the T cross long one at $121.75. So if we can break through $121.75, break through $122.09, we should be able to target at least back to … a corrective move back towards the next verified zone, which would come in at or about the 125 level. So we’ll watch for that. But Brexit is still a problem. We can see the predicted RSI aggressively moving higher, the predicted differences warning us weeks, basically days, before this moved happened that the pound dollar was going higher. So that’s great, but the only problem is we must clear the T cross long.
U.S. Dollar/Japanese Yen (USD/JPY)
Now, with dollar/yen, this is a US/Swiss Franc trade. This is an S&P 500 and a global equity trade. We can see that, once again, this is confirming why we are not buying the S&P 500, because dollar/yen cannot break through this T cross long at $106.75. It’s very important that this gets moving here, guys. If it can’t get moving, then we are absolutely going to fail somewhere up in this area again. Now, if the S&P can surprise us all and break higher back towards that 3,000 mark, then the dollar/yen will follow. But if that doesn’t happen, then the pressure will remain to the downside, and you can see multiple tests of this predicted moving average. Again, using the AI and the predicted moving averages, whether you’re using them for a cross or whether you’re using them as a pivot area, as I prefer, they are high … they, again, show us into the future how things look.
So right now, for next week, we know that we must break through $106.72. If we can’t break through there, then we know we also have a premium short.
The Commodities Currencies
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, when we look at our three main commodity currencies, last week we discussed briefly US/Canada and how we expected a move back towards $134, $134.30, but we don’t expect it to break through. We’ve actually formed verified resistance, now coming in at the $133.40 area. You can see multiple failures at this particular level rate here, three days in a row and then down it goes. But just remember, we have the T cross long at $132.23—$132.33, excuse me. We must break through this level, guys, if this has any chance of moving lower. Ultimately, I believe this pair could move lower on rising oil prices and rising gold prices, but right now, the Canadian dollar is responding to the weaker equity markets.
When the equity, the S&P 500. moves higher, US/Canada moves lower and vice versa.
Australian Dollar/U.S. Dollar (AUD/USD)
So we want to keep an eye on that very powerful intermarket correlation, the same correlation that currently applies to Aussie/US and New Zealand/US. They’re responding to a risk-off environment. We have a verified resistance zone that is intersecting with the T cross long, making this resistance area at $68.22 extremely powerful. Now, the indicators are warning … They’re mixed, but they’re warning we could go higher, but guys, $68.22. Know your levels. Get out in front of this market. If it breaks above that area, closes above that area for one or two days in a row, then we know we’ve got a good long trade here, and we should be able to move back towards, at the very least, up towards this verified zone up in this $70.81 area.
New Zealand Dollar/U.S. Dollar (NZD/USD)
Now, again, that’s 200 or 300 pips. Still a very nice trade. The exact same thing here is going to apply to New Zealand, guys. You can see the trade is setting up the same way. We have a verified support level coming in at $64.21, but we have significant resistance all the way to the $65.16 area. The neural index still green. The RSI is still down. So of the two, it looks like the Aussie/US is the stronger between the US/CAD, New Zealand/US. The Aussie appears to be, potentially, the better buy.
Now, again, the main event risk next week is the FOMC minutes, guys. That’s the one we’ve got to watch for, and we’re going to see how many dissenters we have. But it will play a big part in how the S&P 500 trades, how gold trades, and, of course, how the US dollar trades. So with that said, this is the VantagePoint AI Market Outlook for the week of August the 19th, 2019.