VantagePoint AI Market Outlook for the Week of June 15, 2020
U.S Dollar Index
Hello, everyone, and welcome back. My name is Greg Firman, and this is the VantagePoint AI Market Outlook for the week of June 15th, 2020. Now to get started this week, we’re going to begin where we always do with that very important U.S. dollar index. Now the neural index picking up on the turnaround in the dollar, we’ve hit a bottom. However, we still must get above this key VantagePoint level, which is coming in at or about the 9773 level. Now this level is a very formidable resistance for the dollar to overtake, but if we can get above that level, we should be able to make the turn.
Now, once again, if we take our VantagePoint software, and we use our predicted moving average by ourself, we can observe this nice downtrend move, but we can also pick up on the immediate reversal in the market as we start to break above this critical level of 96, 97. Now that will be our support level to begin the week. But as long as the neural index is holding at a green or a one, then the dollar is likely to continue to move higher. Our RSI is approaching a breakout point as we were holding above 50, but more importantly, we’re starting to move above the 60 level. This is the level we want to watch using our RSI. We want to make sure we’re using the RSI for a momentum-based indicator. A break of the 60 level would tell me that we have momentum building with the neural index.
Now, when we look at stocks this week, they didn’t have such a great week here. But once again, when we look at this top put in place, we can again take notice that once we put that top in place, our neural index the very next day has turned red warning us that the market was getting ready to turn. We still have a very strong support level coming in at 30.61. We’re closing below that, but you can see this verified support level also. That level is at or about the 30.10 level. I would be very cautious with shorts around this level until we have a confirmation that we actually are going lower.
Now, once again, if we bring in our blue line by itself, you can see that we have this resistance building here immediately. Then we snapped below the blue line, and then we’re likely going to come back up and test it at the very least, in my respectful opinion. We will retrace back to 31.01. We can reassess once we get there. Our neural index is down, but you’ll notice this reverse check mark on the predicted RSI is warning us that this move lower may not be what it appears to be.
Now with gold this coming week, gold recovering again following the move with the dollar. Our predicted differences are starting to push above the zero line, but our neural index is still down. Our RSI is essentially being rejected at that 60 level, so a little bit of caution here. We also have a very strong verified resistance high. That’s coming in at 17.61. In my respectful opinion, we want to be very, very cautious with longs in this particular area. I would prefer to buy a little bit lower, down in the 17.28, or even better would be down at this low at 16.71, but I’m not convinced at this particular time we’re going to get all the way down there, but we may, if we see a more serious bout of dollar strength.
Now when we look at oil, oil again, the intermarket correlation here is, of course, to the equity markets. A leading indicator, one might argue here, as oil started to pause here on June the 8th, you can see that we have this resistance building up around this verified resistance level only to turn around and crash lower. However, we have failed exactly on the key VantagePoint pivot area at 34.57, that very important T cross long. Now our main predicted differences, our neural index and our RSI, are all pointing lower on oil for the coming week.
Now I don’t think of an AI Market Outlook would be the same without at least looking at Bitcoin. Bitcoin is certainly a contentious issue among traders, but in my respectful opinion, it’s been a very, very good investment for the last couple of years. Whether you like it, love it, or hate it, to me, should not be relevant, just whether can we make money on this thing or not. Once again, Bitcoin, struggling with that dollar strength. If the dollar starts to turn towards the end of the week, again, I think that Bitcoin will rise towards the end of next week once the dollar strength backs off a little bit. Right now, Bitcoin is struggling up around this 10,500 mark. But the fact that we’re back up here, yet again, coming off this 3,800 level, once again, guys, that Bitcoin has tripled again in 2020. It’s certainly something we would want to make sure that we keep on the radar.
Euro versus U.S Dollar
Now, as we go into our main 4X pairs, starting with the euro, once again, we’ve been expecting this dollar strength for some time. However, we still on the euro, just to be cautious here, we still have the T cross long at 111.73. Now when you’re using your VantagePoint software, one of the strategies that I love to use is using the predicted moving average by itself. Now when we see a move like this on Thursday, when we’ve had a strong move up in the euro, we have verified resistance zones building. But on Thursday we closed below that critical, long-predicted of 1300, that led to a much bigger move down. So to start the week, we’re looking at the 112.88 level as resistance to support down at 111.73. This is the range we’re likely going to play to start the week, so keep an eye on those levels. But for now, our predicted differences are pointing down. Our neural index is down. Our RSI, stubborn as usual, 50.3. Be a little bit cautious about getting aggressive with shorts here, but shorts for now clearly the better play as the dollar starts to rally.
U.S. Dollar versus Swiss Franc
Now with the U.S./Swiss franc, very, very… In the past, it’s been an inverse trade to euro/U.S., but as we can see with the dollar strength, this is often what happens, is we have what I would call a bear trap down here. What that means is, basically, the market pushes below a major support level by sometimes 50 to 100 pips and then violently turns back. Right now, when we’re looking at this, we are in a retracement mode back towards our T cross long, which is 96.05. We must break above 96.05. The indicators from VantagePoint to predicted differences, the neural index are in the rise. But again, remember for now, this is a retracement. This is not a new trend.
British Pound versus U.S. Dollar
Now with the pound/dollar, the setup from Friday and going into this week was very similar. Again, when we look at the market putting in a top, we fail the very next day. The neural index goes from a long period of green to red. You can see that we make a very strong move to the downside. Now, once again, we have critical support at 125.12. We must break through this level. In my respectful opinion, before we do that, we’re going to likely come back up and test this resistance using the long-predicted at 126.01. That would be our entry point for shorts. All stops would be, of course, above the 128.12 high.
Once again, we look at these indicators, and if we’re using the blue line by itself, we can assess here that the very first day that we closed below this blue line led to a much bigger move to the downside. These are the kind of moves that we want to catch right off the bat. Even if we only do one trade on that, guys, 90% of the time it’s going to be profitable. Again, utilizing that blue line that has the correlation of 31 other markets as an entry point or as a daily pivot area to buy and sell from, can be very, very lucrative.
U.S. Dollar versus Japanese Yen
Now, when we come into the dollar/yen, once again, the Fed just killing the dollar against the yen. Again, we crash lower. After that rally up into the non-farm payroll number, gave all of those gains back. Now we come up to a very formidable resistance. We have resistance on the T cross long and the long-predicted between 107.78 and 107.59. This is the resistance level you want to watch to start your trading week. Because again, this is an outlook, not a recap. We are looking at what we’re doing for the coming week using our VantagePoint software. The first thing we want to do is make sure we know our levels. As I say to my own direct clients, “Guys, know your levels.” This level here, if we break above 107.78. And more importantly, 107.59, we break above both of these levels, that would suggest to me that the S&P 500 is going to reverse higher and the dollar strength will back off.
Again, this is how you can gauge multiple markets using the VantagePoint software by looking at the dollar/yen. We can see again, an inverse check mark, and now the RSI is back on the rise here. It’s starting to recover. Again, watch these levels up around 107.78. If we break above that, we should see a good long trade, but my optimism on that at this particular time, remains heavily guarded.
US Dollar versus Canadian Dollar
Now with the U.S./Canadian pair, one of our commodity current site, actually, I call them equity currencies now. The Aussie, the New Zealand, and the CAD, they follow the S&P 500 tick for tick. The S&P 500 goes up, these currencies, they go up, so we have to be cautious of this. Right now, we’ve had a full recovery down off of this major support level, and when I talk about this level… we discuss this in the VantagePoint live training room… this is a breakout point here, guys. This is 133.15. The market came right down, kissed this level this week. This is a full retracement. This is where your order flow traders will focus their trading, right around this. They don’t want to trade in the middle of the range. They want to trade near the upper part and the lower part extremes of the overall range.
When we look at this a little bit closer in our VantagePoint software and come back nine months, we can assess that the U.S./Canadian pair has been in a channel for quite some time, almost a year, and then it broke up to the upside. We’ve now had a full retracement back to the 133.15 level, where we’re basically just cautiously waiting to pick up our longs. Right now, our predicted differences are rising. Our neural index is up. But again, caution is always wise, guys. When we look at not just the neural index, but the RSI, the RSI has come up, but then has mysteriously just stopped right here, and the angle of the RSI is now starting to point down.
What often happens with the U.S./Canadian pair, whatever it does on Monday, it often does the exact opposite on Tuesday. Then it sets its little trend on Wednesday. Just be careful of U.S./Canada getting aggressively long or aggressively short on Monday trading. What I often recommend with my own guys, is that I will say, “Okay, U.S./Canada will likely follow the move from Friday, probably extend higher. If it does, it’s likely going to sell off for a little bit anyway, on Tuesday.” Just be cautious of that, guys. Then again, usually U.S./Canada, will go back to the primary trend on the Wednesday. They just kind of flush the market out.
Once again, if we know our levels here, we can assess that 136.36 is still a significant resistance level for this particular pair. But once again, if stocks and oil recover, then the U.S./Canada will continue to slide lower. If stocks sell off further, oil moves lower, U.S./Canada will easily break through 136.36, and we’ll likely move up towards the next verified high at 138.32.
Australian Dollar versus U.S. Dollar
Now with Aussie/U.S. and New Zealand/U.S., this level up here that I talked about in last week’s Weekly Outlook, is a very formidable resistance, where most analysts and pundits don’t really talk about it much, but I do. That’s the yearly opening price. When we look at this, this is where this payer opened, basically, the calendar year. We can see this. If I draw this line, we come back here. I just click on there, January 1. This is where the Aussie currency opened the year. It had a miserable first three and a half months. We’ve had a full retracement back to exactly where we started.
Guys, this is the most important thing to look at and add to your charts, by putting on that yearly opening price. Because again, this is a sitting duck up here, but to be very clear, what forced the Aussie lower very well could have been order flow traders, but more specifically, the inner market correlation to the S&P 500. When the Aussie got all tangled up here in failed, it failed because the S&P 500 did. The S&P 500 technically was the trigger that sent the Aussie lower. These are the things you want to watch.
Once again, an inverse check mark rate on the 40 level. Again, the Aussie has come down, kissed the key VantagePoint level 67.95, and then has started to reverse higher. My optimism that equities, the S&P 500, could still move higher is still there. Again, because I need a full break on the levels that we talked about on the S&P 500 and on the Aussie/U.S.
New Zealand Dollar versus U.S. Dollar
The same thing here, guys, will apply to New Zealand. The New Zealand, basically, if we put a line on here and we say, “Okay, why did we fail here?” Well, in my respectful opinion, first and foremost, we failed because the S&P 500 failed. But if we come back and we look at where we were in the year, you can see that this is basically where the New Zealand started the calendar year, right up around this particular level. We retrace, we take a big move down, retrace right back to that level, and then we start moving lower. But I will point out on both the Aussie/U.S., the New Zealand/U.S., and the U.S./CAD, the neural index was a leading indicator warning us this was going to happen.
Again, if we know our levels, and we know how to apply our VantagePoint indicators, we can have a very, very successful trading day. With that said, this is the VantagePoint AI Market Outlook for the week of June the 15th, 2020