VantagePoint AI Market Outlook for the Week of January 20th, 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 20th 2020.
U.S Dollar Index
To get started this week, we’re going to begin where we always do, with that very important US dollar index. We can assess here that the dollar has moved higher on Friday. Thin liquid markets, profit-taking has dropped as driven the dollar higher, but we can see that the indicators and VantagePoint are not in complete agreement with this move up in the dollar.
Again, we’ve got very strong verified resistance up to the 97.400 area, but even stronger resistance coming in at the high at 98.080. We’re basically moving into a sell zone for the dollar. Once again, when we look at these, we are making new lows, but we are not making any new highs. Whether you’re an Intermarket analysis trader or a correlation trader or just a price action trader, we look for these things. We look for lower lows and we look for lower highs.
We’re not getting any higher highs, just lower lows. We are still in the overall range, but the dollar’s still under pressure. Our predicted RSI moving into overbought territory, but not quite there yet. Normally in most cases, as I said in last week’s Forex weekly outlook that did come to fruition, the dollar is weak after the non-farm payroll number. However, the dollar does start to strengthen as we move closer to the end of the month and into the first week of the new month.
I would suspect that we’ll see some dollar strength but probably not till Wednesday, Thursday, Friday of this particular coming week. When we look at the price of gold, gold, of course not selling off. Not even getting anywhere near below 1500 which I suggested was very, very unlikely.
Gold holding very firm above our long predicted here. Starting to recover again, our predicted RSI. Moving above that, it’s holding above 50 but more importantly, now it’s starting to move above the 60 levels on the RSI, suggesting that we have momentum building on gold to the upside.
Again, nothing is for sure, but certainly, we can look at this and say that gold is absolutely bullish, but again, we need to get moving here. That’s what I’ll leave this with. We’ve got very good support sitting at the 1536.00 area, but we need to get moving off of this VantagePoint predicted moving average at 1553.00 and break free and clear of that particular area. The indicators are a little bit mixed, but still bullish while above, about the 1508.00 area.
When we look at the S&P 500 it continues its relentless move higher. It’s just every week we’re making new highs on this thing. We’re now up at 3335.00. Unbelievable move in the S&P 500, but the US, China trade deal definitely fueling this a little bit. Because when we look at the other correlated markets, for example, light sweet crude, we can see that crude is still relatively bearish. We do have the medium-term crossing the long term predicted difference with the neural index.
Light Sweet Crude Oil
If oil can catch a bid here, that would further support additional longs on the S&P 500. On a week over week basis, I’ll look at the predicted moving average and I’ll trade off this particular level. You can see that the market is in constant contact daily with this blue line, which is the long predicted. The predicted moving average without the simple moving average. Just using that level as a pivot area to look for the market to hold above.
As long as it’s holding above this level, the theory is we would stay long. To start the week 32.99, I do anticipate a retest of that level. If it holds, we’re likely to move lower. Again, oil is trying to rebound. A buy signal is forming here that could indirectly be very supportive of an additional leg up in the equity markets.
Euro/U.S. Dollar (EUR/USD)
As we move towards our main Forex pair, the Euro basically had a fairly bullish week and then sold off pretty heavy on Friday on some of the data, but again, a lot of that too guys, is profit-taking.
We’ve got good verified support here that basically goes all the way down to the 1.1040 area. We’ve got additional support to 1.1015. As long as we’re above 1.1015, the Euro is not necessarily just going to sell off here. I think we’re going to continue to range trade here with a slight negative bias, but watch how the market comes out, how the Euro comes out of the gate on Monday and Tuesday. I believe there is a holiday in the US on Monday, so Tuesday is the day that we want to be very, very cautious of this.
Again, right now we’re unable to hold these gains staying. Not making any new highs, not really making any new lows either. Again, most of the indicators here now are starting to turn bearish.
U.S. Dollar/Swiss Franc (USD/CHF)
With that bearish move in the Euro, we may be able to get some move up in the US-Swiss Franc. This pair is very puzzling to say the least because really there’s very little reason for real money to hold Swiss Francs against the US dollar, looking at the interest rate differential between the two countries, the US being the highest and the Swiss Franc being the lowest at negative .75.
The carry trade would be long. We’re holding above this bottom here we managed to recover on Friday, but we’re not clearing that critical VantagePoint level. The T-cross long, 0.9717. We must break above that level guys, if we have any chance of this particular pair moving higher. Again, another way that I will gauge that is using the predicted moving average by itself. We can see the long-predicted here. The market is unable to get back up above this level.
If we can get back up above 0.9680, stay above that level, then we should be able to have some decent buying in this coming week but if we can’t, then we are likely to start heading lower.
British Pound/U.S. Dollar (GBP/USD)
The British pound, again, very much sideways on the week. We were down on this to start the week and then we went up the rest of the week only to sell off again on Friday. We’ve got the Bank of England I believe, coming up this week. There’s going to be a lot of volatility in the British pound right across the board, not just against the US dollar but against the CAD, the Swiss Franc, the Yen, all of these other pairs.
Not a bad week to maybe stand down on Great Britain-US until we hear what the Bank of England’s next play is because they keep flip-flopping back and forth and it’s very difficult to call. When you have that kind of event risk, it’s always good to just step aside and maybe go after some of the other Forex pairs with a lot less volatility, is where I’ll leave that. Looking at the VantagePoint indicators, our medium-term has crossed our long term predicted difference, but the neural index is not overly supportive.
Again, when we look at these verified supports levels, they go all the way down to this big one here, around 1.2827. If I’m going to try and pick this thing up long, then that’s the level I would want to hold out for until I hear what the Bank of England is going to do going forward.
U.S. Dollar/Japanese Yen (USD/JPY)
With the Dollar-Yen, the Dollar-Yen has been able to break above 110 but the problem here guys is that it’s really not going anywhere past that.
When I look at this right now, I’ve got a newly formed verified resistance zone and I will point out this bar over here. Anybody looking at this in the VantagePoint software, is a data glitch with bar chart. This never actually happened, this bar, so just disregard it. This is the one we focus on right here, which is 110.20. You can see that the resistance is all stacked up here, but if we look at the VantagePoint proprietary indicator, the medium-term crossing, the long term predicted difference, it’s crossing to the downside.
We’ve got our predicted RSIs in overbought territory. This suggests that if nothing else, we are going to correct, probably correct lower down towards the 109.48 area. We can reassess at that time but again, I strongly advise everybody to look at the long-predicted by itself, 109.89. If we can break through there, then that could trigger a bigger move to the downside. We want to keep all eyes on Dollar-Yen next week. If Dollar-Yen sells off, that means that CAD-Yen, Euro-Yen, Aussie-Yen, New Zealand-Yen will all sell-off.
It’s basically all the same trade. Again, keep all eyes on Dollar-Yen. If we lose the two levels that I just talked about, then we want to fire at will on those cross pairs on shorts also. Again, the medium-term crossing the long term predicted difference very, very seldom wrong because it’s measuring the medium-term predicted trend and the long term predicted trend against each other. The medium-term is weakening against that longer-term trend as we stall against this verified resistance zone.
U.S. Dollar/Canadian Dollar (USD/CAD)
As we go into our three main commodity currencies, US-CAD is just a stubborn thing, isn’t it? It just does not want to break through this. We’ve got two verified resistance zones stacked on top of each other. One coming in at 1.3104 and a newly formed one at the high at 1.3079. If we can break through both of those two levels, then we would head towards the high of 1.3189 but again, right now our medium-term crossing our long term predicted difference is suggesting something, maybe a little bit off with longs here.
We’re going to monitor this one going into the week, but again, when we click on our F8 and our VantagePoint software, we want to look at this critical intraday pivot, 1.3050. If we start the week on Monday and Tuesday holding below 1.3058 then shorts will be a decent play going back down into this lower 1.2957 area. Again, that is going to be dependent on equities moving higher and oil moving higher.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
With Aussie-US, a valiant effort this week to try desperately to break through this verified resistance zone coming in at about the 0.6920 area.
We just couldn’t do it. We couldn’t close even one day above that area and now we’re heading lower. What I will point out here is that we also have very formidable support, verified support down at 0.6849 and even stronger support down at the 68 level. I would advise to watch this level down there for a potential reversal. If we’re going to buy this thing, these are the kind of levels we watch for. Again, our additional technical indicators are starting to roll over negative, but we’ve got to break through that support on the downside.
Also again, the way we would look at this, or the way I would look at this, I would have pending orders sitting at about 0.6930, 0.6940 that if we reverse violently above this verified zone, we do want to get long. When I look at the New Zealand-US pair for next week, again, just wandering around really not doing much of anything, but we do have the medium-term crossing the long term predicted difference. It just can’t gain any real traction.
We want to watch this level down here, this main support level from this previous week at 0.6584. If 0.6584 holds, then we would be looking at, again for longs here, but be very, very cautious with this one. Again, I’m not convinced at this time we’re going to go higher or we’re going to go lower. We may just simply move sideways here until we get additional data out of New Zealand or out of the US.
With that said, this is the VantagePoint AI Market Outlook for the week of January 20th, 2020.