VantagePoint AI Market Outlook for the Week of January 6th, 2020
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 January the 6th, 2020.
U.S Dollar Index
Now to get started this week, we’re going to begin where we always do with that very important US dollar index. Now a lot of things happening in the market going into the first trading week of the year. Guys, we’ve got a potential impeachment trial. We’ve got a conflict between the US and Iran. A lot of things going on here, most of which point towards US dollar strength. Now oftentimes when we’re in a situation like this with the Iran conflict, with the impeachment, with these things, the dollar is usually strong and so is gold. And equity markets are not usually, do not usually respond that well to this type of environment, so we’ll see how it plays out. But for now, the main thing we want to do is look at the US dollar.
We’ve got a verified zone that’s formed down here around 96.020, our indicators are slowly starting to turn bullish, but we’re not quite there yet. Now our critical T cross long 96.820, we need to break above that and hold above that. Now one of the first tests of this area is going to be again, our long predicted. We were unable to close above that on Friday, but we want to monitor this level around 96.590. You can see where I’m pulling this level from the long-predicted 96.590. If we can close above this Monday and Tuesday of next week, that will likely trigger dollar buying. Now the US dollar is usually strong into the first week of the new month, so we should be expecting that anyway. But what I would like to see, the neural index is already on board, the predicted RSI is rising, but we’ve got to get this medium-term crossing the longterm predicted difference to show that this thing is going to move higher.
Now when we look at gold from this past week, it’s very interesting that a lot of people were not on board with buying gold and when we look at this, gold has been trading in this very well defined range and we have clearly broken through there up to the levels that we’re at now. This is what we were looking for. Now the only thing is we’ve got this big move in gold in thin illiquid markets and as the market turns to a risk-off environment to see if this conflict between the US and Iran escalates or not. Either way, money is going into gold and money has been going into oil. When I’m looking at this right now, I want to back off my charts a little bit to see if I can identify additional verified resistance. We can see that it’s very easy to identify using the VantagePoint verified zones.
We’ve got 1550.00 and even stronger resistance at 1573.00. Now again, oil is oil and gold is going to start off 2020 very bullish, but again, can we maintain this? If we look at our indicators from VantagePoint, they’re a little bit mixed but our neural index is still strong, but the further we move away from 1504.00, the T cross long, the more likely it is we’re going to retrace to it. When we look at our intraday pivot area using our long predicted that’s coming in at 1526.00. We can identify this support. Now once again, your traders that are using accumulation distribution or overbought, oversold signals, they don’t fare too well. As you can see there, the market is hugging the VantagePoint predicted moving average and it is completely disregarding the overbought signal. But again, we do still need to monitor this.
I would expect a corrective move lower in gold depending on what happens between the US and Iran and whether this escalates or not. But right now gold is still looking very firm, but we have to remember we are still within an identifiable range. This is what most traders miss. While this is very bullish as we follow the VantagePoint predicted moving average where we’ve got the, basically we have the calculation off of 31 other markets that are being forecasted into this blue line. We need to continue to hold above that particular level.
My optimism on that remains somewhat guarded at the current time and for one reason is that the equity markets during this conflict on Friday in thin illiquid markets were not, the equity markets were not able to penetrate the critical T cross long at 3207.00. This is a warning sign here guys, that gold may not be as strong as what we think it is up at these current levels and equities may not be as weak as what some people are saying it is. We’ll continue to monitor it, but the indicators from VantagePoint do look good here.
Our medium-term crossing, our longterm predicted difference, our neural index, and we’ve got a falling RSI, which tells me we’re losing that upward momentum, so potentially a corrective move.
Light Sweet Crude Oil
Now when we look at oil, oil continues to advance, but again here guys, for all the wrong reasons, the conflict in the Middle East, all of these things are boosting oil prices. It nine times out of 10 moves like this are not sustainable, so we’ll continue to monitor this. Our predicted RSI is in overbought territory, but our predicted differences, a much better way to gauge momentum in the market. Trending, whether it’s non-trending, they’re holding above the zero lines and they’re starting to cross back to the upside. We’ll monitor these guys, but once again, I don’t think that that’s a given signal that oil is just going to go screaming higher because of this particular conflict.
Euro/U.S. Dollar (EUR/USD)
Now when we look at the euro, once again, the euro tries so hard to push out of this particular range, but it continues to fail up in these VantagePoint verified zones. We can see massive resistance where we keep coming up, kissing this level up to around the 1.1255 and then we’re having these violent rejections from these verified zones and that is the benefit of using these zones. You can see we’ve got a lighter colored pink color, then a hard, hard red and that is basically identifying sell zones. As the market moves into this sell zone, we haven’t even been able to get into this particular block of selling so we’ll continue to monitor things here. But once again, the euro continues to be resilient. It doesn’t just sell right off. We’re holding above the T cross long, but clearly a sell signal is forming. The medium-term crossing the longterm predicted difference, but we must break down below 1.1140.
We’ve got the RSI rising, but we’re not getting over 50 on the predicted RSI. Not only do I want to see us above 50, I would like to see us above 60 for a breakout play.
U.S. Dollar/Swiss Franc (USD/CHF)
Right now, if nothing else, US-Swiss franc should be able to target back towards the 0.9777 area on this new dollar strength. And again, it doesn’t mean that the dollar trend is being set in place just yet. We’ve got to let all these other issues kind of shake out. But right now in a risk-off scenario, money goes into the US dollar a little bit more maybe than the Swiss franc, but they are both risk-off currencies. Maybe not the best place to be buying dollars here, but based around the interest rate differential, it is decent.
British Pound/U.S. Dollar (GBP/USD)
Now with the British pound, once again, very little love here for the British pound despite Brexit being resolved. But when we look a little deeper into this, Brexit really isn’t resolved here guys, because now the current Conservative party in the UK, they have to sign a trade deal with the European Union by January 1st, 2021. I’m not convinced they can do that. With that said, I would say that the market is in somewhat agreement with me that they’re getting nervous. There’s the big spike after the election and we have done, this is a classic case why we never trade the news guys because 98% of the time it’s buy the rumor, sell the fact. We’ve failed here. We’ve come down. We’ve retraced back to a much lower high here, but we are within a well-defined range. The end, if we’re going to be looking at buying the British pound, then we’re looking down around the 1.2824 in this verified zone. But right now the majority of the indicators are pointing towards further weakness in the pound so shorting this thing is reasonable going into next week.
Now when we look at again our long-predicted or our blue line by itself, you can see that we’ve closed below that blue line on Thursday. That was followed up with an additional sell-off on Friday, so now we reassess next week, but if we can get that predicted RSI breaking down below 60, then we should see momentum building on the short trade here.
U.S. Dollar/Japanese Yen (USD/JPY)
Now with dollar-yen next week, once again here guys, the dollar-yen simply unable to break through this critical a 106.72 area and I will warn anybody looking at the VantagePoint software, this is not an error in the VantagePoint software. This is an error in the bar chart. Dollar yen never traded to this particular level or not that I’m aware of anyway, so we still are running off of our verified zone here at the 109.75 area. We failed, but now we’re on a bigger area of support. That support level is going to come in down here. That’s going to come in down around the, I believe it’s, let me just double-check that. Yes, 107.89.
Be cautious down here because if things cool off between the US and Iran and everything else, then and equities start to recover. And again, the S&P hasn’t confirmed a trend reversal just yet, but if it does and the S&P 500 crashes and the Dow, the Nikkei and all the other global indices, dollar-yen will be unable to move higher. It will continue to move lower as in a risk-off scenario. Money will go into the yen, but it will still go into the dollar. But it tends to go into the Japanese yen a little bit more. Keep an eye on this level, 107.89. See if we can hold this.
My advice to you guys, and it’s free advice here guys, is very cautious of bear traps in levels like this. One of the main purposes of the verified zones in the VantagePoint software is to warn traders that even though a lot of the indicators are saying we’re going lower, this verified zone, this failure point can be very, very powerful. Order flow traders can step in around these areas and often what they’ll do here, just to warn everybody is they’ll push dollar-yen a little bit lower into this area here, make it look like it’s a breakout to the downside only for it to violently reverse back to the upside. Caution is advised with this particular pair.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now with the US CAD, even though we have oil prices that are moving aggressively higher, that doesn’t mean that the US Canadian pair will automatically go lower because the Canadian dollar does not like global conflict any more than the Aussie or New Zealand does. We’ll continue to monitor this, but right now this is the kind of signal we look for guys. We’ve got the medium-term crossing the longterm predicted difference in the opposite direction in which the market’s been moving, which is clearly down. We’ve got a rising RSI, often known level, another known failure point here and we’ve got a checkmark that goes to our neural index. This suggests that US Canada will actually go higher next week, so I would watch this area. Let the market come down a little bit lower to about the 1.2944 area and then we can reassess if we want to buy this. But this is what we have. We have a buy signal forming.
When we click on our F8 and go with our long predicted, we’re looking for the market to retake the 1.3029. If we can get back up above 1.3029 guys, then that’s going to open the door here potentially back into the 1.3158, so some potentially some very good opportunity. When we look at the long-predicted and why it’s so important, as you can see that the market is always in contact with this particular level. Trying to get above it or below it. You can see as we ride this thing lower, we stay below it, but then when we cross over here, we then spend usually a couple of weeks going in the opposite direction. Then we just simply repeat the same thing. Very effective way to trade this particular market. Not just in the Forex guys but futures, stocks, all of the above.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
Some potential opportunity for US CAD next week which would signal that we could have some opportunity on shorts on Aussie US and New Zealand US.
Right now we’ve got a major support level at 0.6932 that this particular pair is holding above, but if we break down below here then that will trigger a bigger move and once again, if we look at our long predicted, we’ve broken that key level. We’ve got a nice steep cline and you can see how the market just simply is always in contact with this blue line. As long as it’s above it, we go long. But when it starts breaking down below it, it suggests a shift in the particular trend. This is a fantastic way to utilize your VantagePoint software. We see the same thing with New Zealand US. We’re approaching a major support level at 0.6632 but we’ve already taken out another major support level using the long predicted. We’ve lost that level. 0.6681, that gives us our intraday pivot area for Monday. We want to monitor this very closely, but all the indicators in VantagePoint are pointing towards potentially a bigger move lower on both Aussie US and New Zealand US and a move higher on US CAD.
With that said, this is the VantagePoint AI Market Outlook for the week of January, the 6th, 2020.