VantagePoint AI Market Outlook for the Week of December 30th, 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 Equities, Commodities, and Forex Pairs.
Hello everyone and welcome back. My name is Greg Firman, and this is the VantagePoint AI Market Outlook for the week of December 30, 2019.
U.S Dollar Index
Now, to get started this week, we’re going to begin where we always do, with that very important U.S. dollar index, however, just a reminder to everyone, we are in holiday thin markets and very often the price is not what it appears to be as real money starts to come back into the market into the first and second week of January. When we’re looking at the dollar right now, dollar coming under a heavy selling pressure on Friday to end the week, but again, this price is unlikely to break through the verified support low at 96.29. Now, we are showing further weakness in the dollar here, but again, in thin, E-liquid markets, we want to be very cautious about aggressively selling U.S. dollars down in this 96.29 area.
I would suspect the dollar is likely to start to recover down in that area so we want to watch the VantagePoint indicators very closely as we move down into those levels.
Now, to finish the year, the S&P 500 has made some very solid gains here, partly to do with the US/China trade deal that’s coming, the new NAFTA agreement, but just general demand for equities going into year-end has been very, very strong here. When we look at the VantagePoint software and how they’ve handled this volatility in the market, we can see that this strong buy signal started to form in October of 2019. We had a significant corrective move, which tricked a lot of market analysts into thinking that there was going to be a big sell-off. Myself included, I thought that we would have a deeper correction than this, but we didn’t.
We recovered. Our triple EMA cross did not complete. We immediately moved back over our T-cross long, and the market accelerated to where it currently is now. Now, what we can assess from the current equity markets is that we’ve got a medium-term crossing our longterm predicted difference. Our neural index is down and we are in a heavily overbought condition, but we’ve been in a heavily overbought condition here, guys, for literally months. So I’m not sure I would ever rely on an oversold or overbought indicator in this particular case, because the inner markets that are driving the S&P 500 are very, very strong, and until those inner markets start to give up some of those gains, then the S&P 500 will also hold those gains. For next week, going into year-end, I would be watching this 31.89 area very closely, and I do anticipate we will test that level.
Light Sweet Crude Oil
Now, when I look at light sweet crude oil, again, a very high inner market correlation to the equity markets, we are getting very toppy up here, in and around this 62, 61.40 area and you can see that we’re starting to stall right in this particular area, so we want to be a little bit cautious about buying up here. If we’re going to remain with the primary trend and buying the equity markets or buying the light sweet crude oil contracts, we want to let this thing pull back a little bit before we think, because again, both are a little lofty for this time of year. Now, surprisingly gold has made a big move up here, but again, we have discussed this in a number of the previous Forex weekly outlooks where I’m saying that we have this heavy support level down here and very little is changed around 14.53. Unless we break down below 14.53, then gold is still predominantly bullish.
Now, we are moving up to a very powerful verified zone up here, around 1525.00, so gold will have a formidable adversary with this verified zone to see if it can breakthrough. But again, with everything with a risk-off environment here, it’s unlikely that gold is going to break through 1525.00, 1530.00, excuse me, but it is possible going in towards the middle of January. Now, the reason I say the middle of January is that we want to let everybody come back in. Everyone’s on vacation going into that first week of January, so the second week of January is far more important. I would anticipate that gold would stall out here towards that, the first and second week of January as the dollar starts to recover. We know that the dollar is usually strong in the first week of the new month, so we’ll be watching that very closely, but if we see any dollar strength, that would likely push gold lower, not higher.
Euro/U.S. Dollar (EUR/USD)
Now, as we move into our main Forex Pairs going into, again the year-end, a lot of debate over the Euro-U.S. pair, but again, here guys, what we have to remember is when we look at these verified zones and this major resistance up here, the Euro, just to be clear and to point this out, the Euro did not trade to these particular levels. That is a data issue that I’ve seen here with bar charts, so again, if you’re in your VantagePoint software, just remember this bar did not actually happen. When we look at the additional indicators, this level of resistance up here is still holding, and that level is coming in at or about the 112 level. We haven’t broke through there. The Euro does look mildly bullish here, but again, the Euro is still firmly below the yearly opening price and is unable to gather any kind of real momentum.
When we look closer at the additional indicators, our predicted differences are rising, our MACD looks good, but again, we have to assess when real money comes back in if this is a true move or not. And that will be the major question here.
U.S. Dollar/Swiss Franc (USD/CHF)
Now, with the Euro-U.S. counterpart, the U.S. Swiss Franc, the U.S. Swiss Franc has made a big move down on in Friday trade, but once again, the Swiss Franc is not a currency that real money wants to hold. The interest rate differential between the Swiss Franc and the dollar heavily favors the U.S. dollar versus holding Swiss Franc. I would anticipate the low area, down in this 0.9714 area, is likely to hold going into the new year. Potentially some very good opportunity there on a reversal on this particular pair, but we want to see those equity markets hold gains. Right now the indicators in VantagePoint have moved firmly into oversold territory.
We’re at 11.1 in the predicted RSI. That absolutely does not mean that this pair is going to absolutely turn around and go higher, but the probability is very high. I would watch this area between 0.9659 and the 0.9714 area for potentially a very good, long trade.
British Pound/U.S. Dollar (GBP/USD)
Now, with the pound dollar, the pound dollar has been recovering here guys, but again, Brexit is not really resolved. We still have the new administration or the Conservative government in the UK now has to come up with a trade deal with the EU within a one year period. So again, I don’t think that that’s going to be a very easy task. We do have a buy signal with a medium-term crossing the longterm predicted difference off this verified zone that formed at the beginning of the week, at the low around 1.2905, so we still have good strong buying down in this particular area, but we need to hold above 1.3043 if the pound has any chance of returning to the previous high, up in this 1.35 level.
U.S. Dollar/Japanese Yen (USD/JPY)
Now, with the dollar-yen very much inequity trade here guys, the benefit of the verified zones is that it points out very, very strong support and resistance that’s based on price action only. When we look at this, we’ve had multiple, multiple failures, 109.78, but we can also further assess that the market is holding above the T-cross long, at 109.30, so going into year-end and into the first week of the new year, we’re looking for the dollar-yen to hold above the 109.30. If we can’t hold above that level, then obviously we’re going to have a problem. We’ll continue to monitor this right now, but the indicators are not overly bullish on this particular pair. So if nothing else, a corrective move is, in my respectful opinion, imminent, but the question is, will the trend reverse?
We would need those global equity markets selling off if the dollar-yen is to fall.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, as we move into our three main commodity currencies, the Canadian dollar strengthening on gold prices, oil prices, equity markets moving higher, these are the main drivers behind this sell-off. Now again, we’re coming into a very strong support level, down to the 130. The likelihood that this pair moves lower for the first couple of days into the new year and then turns around is very, very high. Real money, in my respectful opinion, is likely going to be on the move to buy dollars into January 6th, January 7th, so we’ll watch this area down here, but right now, the indicators from VantagePoint are clearly pointing that we’re moving lower.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
Now with Aussie U.S. And New Zealand U.S., they’ve made some very strong gains in the last week or so. We pushed through the verified zone that we discussed in last week’s Forex weekly outlook, but we have an even bigger resistance zone up at this high, near 0.7081. We have the yearly opening price at just below these levels.
And again, we’re also moving into an extreme overbought condition. If nothing else, I would anticipate our corrective move back down to 0.6895, the T cross long, which we can then reassess if we want to continue to buy this or if we want to look too short this. But again, it would be, it would take a pretty significant move in gold for the Aussie U.S to push through this high, near 0.7081. But again, when we start to move into these red zones, that represents the potential for a very strong short. The same with New Zealand U.S. is moving higher, but again, when we back our VantagePoint charts out here, we can see that it’s not free, there’s no free line here, so to speak guys, and we’ve got significant resistance coming in at the high at 0.6789. Very strong close on Friday, but again, I think we’re seeing profit-taking, people are a little shy to buy U.S. dollars. We’ve got the impeachment trial. Maybe, maybe not. I don’t know if that’s going to go through or not, but there’s still some risk-off scenarios there that could take hold as we go into the new year. So we definitely want to wait and be patient and be very particular in what we trade.
With that said, this is the VantagePoint AI Market Outlook for the week of December the 30th, 2019.