VantagePoint AI Market Outlook for the Week of January 13th, 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 13th, 2020.
U.S Dollar Index
Now, to get started this week, again, we’re going, to begin with, that very important US dollar index. We’re coming off the non-farm payroll number, not a great number, but not a bad number either. The U-6 number moving in the right direction but missed estimates on a number of other components, but still a relatively decent number.
Now, we’re looking at major resistance coming in at these verified zones. That’s coming in at or about the 97.400 area until such time as we breakthrough that particular area, the dollar is unlikely to make any gains. The dollar demand that I’ve talked about over these many years is usually around the end of the month into the first week of the new month, and then any demand for dollars usually dries up.
Now, again, we look at the indicators from VantagePoint, our predicted RSI is starting to turn down here. Our neural index is down and, again, we have very, very strong resistance here. We need a break of that area if we have any chance whatsoever of targeting the previous high of 98.080.
Now gold again, having a very good week, of course not getting anywhere down below the key VantagePoint levels and unable to even penetrate below the medium-term T cross at 1547.00. Good strong buying here even after the relief, whether it was a basically no further aggression between the U.S and Iran, not even that could push gold lower. So again, when we look at this, gold has broken the previous range. Unless we get back inside this particular range down at 1525.00 then it’s unlikely gold would move lower, particularly when we come into a period of time during the month when again, there is very little dollar demand here. And to be clear, gold could’ve gone the other way here, very easily. If the conflict had escalated gold would easily be above 1620.00.
But again, to start the week gold very, very strong again. And then we’re seeing some profit-taking basically on the de-escalation, but I’m not convinced that’s completely over yet. So until we get breakdown below the critical level, the T cross long 1528.00, buying gold is still a very reasonable play. I think it’s very unlikely we’re going to move anywhere below 1500.00, at least next week anyway.
Now when we look at the equities, the equities coming under a significant selling pressure to start the week. Rebounding a little bit in the middle of the week. Unable to close below that key VantagePoint levels. But to be perfectly clear here, it’s very difficult to call the equity markets with these kinds of conflicts going on. But after that non-farm payroll number, when we look at the direct inner market correlation, the S&P 500 has largely been correlated, actually positively correlated to the dollar index.
So if the dollar index comes under pressure next week, equities likely will also. But again, when we look at our key intra-day pivot area, that level right now is coming in at or about the 3254.00. 3237.00 the year, the opening price. I would also watch that area very, very closely. If buyers come back in, we have the possibility of extending higher, but at this particular time, my optimism remains guarded. I think the equities have overshot the mark a little bit, but they still have room to extend. The indicators, you can see the predicted RSI starting to lose that momentum. Now when we look at oil and the correlation to the equity markets, oil really taking a hit after the de-escalation oil coming crashing back down. But this, guys, is why you never buy any kind of financial asset-based around news. Because this is the market reacting to U.S. Iran conflict and the same move that drove it up is the same thing that drove it down.
Light Sweet Crude Oil
Now when we look at oil and the correlation to the equity markets, oil really taking a hit after the de-escalation oil coming crashing back down. But this, guys, is why you never buy any kind of financial asset-based around news. Because this is the market reacting to U.S. Iran conflict and the same move that drove it up is the same thing that drove it down.
So, just much like equities, you’re guessing a little bit here because you’re dependent on something outside of your control, meaning specifically what’s going on between the U.S. and Iran. So if things settle down there, oil will flatten out again. The equities will probably remain firm, but again, I will point out with equities too that whenever we’ve seen the kind of year that we saw in 2019 on the S&P 500, there’s never been any significant follow-through. It’s actually the following year after such an up year, almost, well not almost every year after that has basically moved lower, not higher, so I would be very cautious with buying oil and equities at this particular time.
Euro/U.S. Dollar (EUR/USD)
Now when we move into our main Forex pairs, the Euro/U.S., we can see that again it’s starting to stall, down around this verified zone. I expected a little deeper pull back into the 1.1066 area, but we can see that the market starting to stall here. We’ve got a yellow area of caution around that triple EMA cross.
When we look at our long predicted, a very important intraday daily pivot area, that area coming in at 1.1134, as soon as we get back up above that area, we’re likely going to go higher. And again, we’re in a period next week, the middle of next week, we should start seeing the dollar weaken. That’s a normal course of action outside of all of this other noise with the U.S. and Iran and everything else, usually dollar demand dries up around the middle of the month. So we would look to potentially go long Euro U.S. here, I think is a reasonable play. We’ve got our predicted differences starting to flatten out. The RSI is rising. The neural index has gone from red to green. So there’s a number of different positives here. but this would also if Euro/U.S. moves higher, the direct correlation there would be equities lower and gold higher. So those inner markets are indirectly supporting longs on the Euro, at least going into the middle of the month.
U.S. Dollar/Swiss Franc (USD/CHF)
Now with U.S./Swiss Franc. Again, we’ve got a busy week ahead of us, but again, we’ve got to break through this 0.9752. We’re banging up against this level and we just can’t seem to get through it. We’re losing momentum on the RSI, we’re at 49.8. If we can break through 0.9752, but we’re going to need a global risk-on environment to get this thing moving higher. The clear downtrend on this, if we look at this particular pair, despite the big rise in equity markets, pretty solid downtrend here, but also very powerful support down to the 0.9659. So shorts are very, very risky down at this particular level unless we get a sustained break of 0.9659. Now, if the dollar weakens during the course of the middle of the week, then we would see the Pound/Dollar start to rise. I would watch very closely this verified support zone that we’re sitting on right now at 1.3053. We have additional very powerful support at 1.2905, but the market again is very choppy and very sideways.
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.
We’re coming off the first trading week of the year and a very, very volatile one at that, so we want to be cautious. If we’re looking at longs, I would let this one settle down for a couple of days. Tuesday, Wednesday, I think we should see this thing reverse and start moving higher. Looking at the VantagePoint indicators, but again, also some very powerful verified resistance. The first one coming in at 1.3212, our secondary level coming in at 1.3284 and of course a major level at, again, this high coming in at 1.3514. But we need to hold in this lower area if this pair has any chance of moving higher.
U.S. Dollar/Japanese Yen (USD/JPY)
Now with the Dollar/Yen for next week, the first thing I want to point out here guys, the market, again, as I had said last week, this is a blip in the bar chart data we did not Dollar/Yen did not trade to 111.12 to be very clear. We have been unable to break through the current verified resistance zone at 109.68. Only a sustained break of 109.68 will take the pressure off the downside in my respectful opinion. And if equities are getting ready to turn lower then Dollar/Yen is going to follow lower. That’s the way this works guys with the inner market correlations. We’ve had a nice corrective move off of here. Dollar/Yen, probably one of the most volatile pairs last week. You can see this as a single bar day here. We went all the way down to 107.68 and then skyrocketed rate back up to 109.24. But we haven’t penetrated through this resistance zone, so until such time as that happens, shorts are clearly favored.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now again with U.S./Canada, we’ve had a good recovery as I talked about last week, but we still cannot break through this key VantagePoint level at 1.3074. Only a sustained break of 1.3074 will again take the pressure off the downside. So if equities start to move lower and oil continues to move lower U.S./Canada will go higher. If we look at the VantagePoint predicted moving average, again using 31 other correlated markets, excuse me, we can see that we broke above that key level.
Rate, I guess on January the eighth we’ve got a high there, 1.3043. Clearing the 1.3021 area and up we go. Now the Canadian labor report was pretty decent. The U.S., not so much. But again, the U-6 number on the U.S. unemployment number was still okay. Canada was better than expected, but still, I think there’s a better chance of Canada going into a recession than the U.S., so loans favored. But again, loans are favored while we hold above this key support level which comes in at 1.2944.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
Now if the equity markets turn lower, that could be a positive for Aussie/U.S. and New Zealand/U.S. Now we’ve got good support that’s formed this week, but again, we already had verified support at 0.6838. We came close to that area and you can see that the buyers stepped in three, four days in a row, but they again cannot penetrate that key VantagePoint level at 0.6911. If we can take out 0.6911 this pair is likely going to go higher.
If we click on our F8 in our software, our key intraday pivot area, it looks like it started, it’s flattening out and it could be getting ready to turn higher. Our neural index is turned green. Our medium-term crossing our longterm predicted difference appears imminent at this particular time. So again, long’s favored here, guys. While we’re holding above our current low of 0.6838.
Now with our final pair, again with New Zealand/U.S., when we look at New Zealand/U.S., you can see that we’ve got support forming here. If we just visually look at that and say, okay, we’re going to draw a line there. Once again, the VantagePoint indicators are warning that this pair is getting ready to go higher. The neural index, the rising RSI, medium-term crossing the longterm predicted difference. Looks like we’re getting ready to turn around.
If we click on again our F8 the problem is the VantagePoint, again, are long predicted. We can’t seem to get above this thing. Very good shorts though. Again, when we look at this, when we talked in last week’s Forex Weekly Outlook that we anticipated dollar strength this week, but now we’re anticipating dollar weakness on a lack of demand. Not really for economic reasons, just lack of real-world demand for dollars next week. So, these are the things we want to monitor when we’re trading the Forex market and be very, make sure we’re looking at our direct inner market correlations.
So with that said, this is the VantagePoint, AI market outlook for the week of January the 13th.