VantagePoint AI Market Outlook for the Week of June 8, 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 8th, 2020. Now, once again, this week, we’re going to begin where we always do with that very important US dollar index. Now the dollar really taking a hit last week, however, fully recovering on Friday. Now what we’ve seen is an improvement in the labor market. More jobs created than what they anticipated. So maybe that’s a good sign that things are starting to turn now for the dollar, albeit a few days late. Usually, we see this strength in the first week of the new month. We did see it, but only in one currency pair. And that of course was the dollar, yen with the equity rally.
So for this coming week, we can see that our predicted differences are starting to rise. We’re looking for the neural index to go from red to green, to confirm dollar longs. We can see we also have a rising RSI. The downside momentum is starting to back off a little bit, so we should see the dollar recovery.
Now with that, that is not likely going to be a good thing for gold here as gold, we can assess has already started turning lower. Now that move actually started, when we look at this, it started very early in the week, which was very confusing because usually when we see this, we also see the dollar strengthen. So gold and the dollar both moving lower, but gold taking the bigger hit on Friday with that labor report. So again, when we’re looking at this, we still have relatively strong support here at this 1,678, but it does look like there’s going to be further downside in the week ahead for gold.
S&P 500 Index
Now, that’s a good sign for the equity markets. When we look at the S&P 500, we’ve had a very strong rally. We’ve recovered almost back to where we were pre- the Chinese virus. Very interesting that somebody is buying stocks and they’ve been buying stocks for quite some time now. We can see the original buy signal from VantagePoint came all the way back on April 6th, and the stocks have had the retracement points. But again, that retracement is usually around the long predicted. So for now, the main support level that we would look for is 3,107. As long as we’re holding above that, there’s a biased for further upside.
Now with that equity market moving higher, we can see that oil is responding very positively to the stocks moving higher. I’m not convinced just yet that we can break through this resistance here at 42.23 but that is the next upside target on oil. Again, we’ll see where we go from here. The RSI sitting at 93.1. So it’s suggesting there isn’t a lot of momentum up here at the current time.
Now with everything that’s been happening, Bitcoin still holds, for the most part, is holding its gains. When we look at Bitcoin, we should start to look at this as a normal investment like anything else. We can get into it via GBTC or some of the other ETFS, if you don’t want to trade it directly against the US dollar. But for now, Bitcoin has pretty strong support at 9,660 but I do expect it to come under a little bit of pressure this coming week on dollar strength.
Euro versus U.S. Dollar
Now, as we come into our main Forex pairs again, starting with that very important euro, the euro’s had a big rally up, but in my respectful opinion, for all the wrong reasons. We’ve got the ECB talking about more easing, more aid packages and everything else. But again, the euro was pretty much stopped in its tracks on Friday after the release of that payroll number. And in my respectful opinion, again, the dollar cycle is still there. It’s just running a little bit behind. You’ve got riots in the US, all these protests, you’ve got additional COVID cases. So a lot going on, a lot of negatives against the dollar. But again, they will still, the big institutions will still have to buy dollars to settle these trade balances. So once again, the dollar is likely going to rally when you least suspect it.
So right now, this particular market has pulled a considerable distance from the TCross Long at 1.1069. We’ve also got the long predicted at 1.1216. These are our two main support levels, but again, we can see the RSI already starting to turn down, suggesting the euro has peaked, or it’s getting very close to a peak near its overall range top. And that range top of course, is coming in at or about the 1.1493 levels. So selling up into the 1.1493 level, a very reasonable play based around the dollar cycle.
U.S. Dollar versus Swiss Franc
Now, as we look at additional places potentially to buy dollars, we would look also at the US Swiss Franc. We can see that we’ve got good support down here at this breakout point near the yearly opening price. And again, we’re starting to turn back around. Now, we’ve got resistance at 9673. If we click on our F8, we can see this additional VantagePoint predicted moving average. This is a critical level here. That’s 9637. So if we can break above 9637 and hold above this level, then the probability is we’re going to return back to that 98, 99 cent mark. That is the direction I would look for for next week. But again, we must clear 9637 for that to actually happen.
British Pound versus U.S. Dollar
Now, with the British pound this week, again, we’re sitting pretty much on a breakout point and it’s coming off of this verified resistance at 1.2646. My concern is that the pound is not holding above this particular level. And again, if we look at our medium term crossing our longterm predicted difference, this is warning us that this may not be a strong rally in the pound here. Again, we’re very overbought and that doesn’t mean it can’t go higher to be very clear, but it is a warning sign that there may not be a lot of momentum to the upside. And again, we need momentum in our trading. So be very, very cautious on longs up here at this particular level, because it looks at first glance to be a classic bull trap.
U.S. Dollar versus Japanese Yen
Now, with the dollar yen, the dollar made significant gains this past week against the Japanese yen, which is again, very confusing. But this would be, or could be it’s very possible that this number, this payroll number was leaked prior to the payroll number being released. Excuse me. Now, what I mean by that is that the dollar yen started to make significant gains in the very start of the week, which is consistent with the dollar cycle. However, the Euro, the dollar did not make gains against a number of other currencies, only the Japanese yen. Now this in my respectful opinion is also what’s fueling the rally in the S&P 500 and the global equity markets, the risk off currencies, like the Swiss Franc, like the yen, like the dollar, they did not do well last week.
So again, we’ll continue to monitor this right now, but again, this could be a bull trap up here also. We’ve come up to this major resistance level on the dollar yen. That level is coming in at, or about the 109.38 level. So again, just be cautious around this level. It would appear that we’re going to make a run at 112. I could see that, but we need the stocks continuing to advance.
US Dollar versus Canadian Dollar
Now with US, the Canadian dollar has also laid quite a beating on the US dollar last week, but again, in my respectful opinion for all the wrong reasons. Now, the Canadian dollar is like the Aussie and the New Zealand. As I had stated in many of these AI Weekly Outlooks that they follow the S&P 500. So if the Canadian dollar reverses next week and the Aussie dollar reverses next week, then that would suggest that the equity markets may stall here.
But if the S&P 500 continues to rally, we’re going to see further downside pressure on US CAD, further upside pressure on Aussie US and New Zealand US. Now, again, we’ve had the Canadian unemployment report on Friday was also quite good. So we’ll continue to monitor this payer, but right now we are extremely oversold here. The predicted RSI is at six. There is not a lot of room to move. So again, I think the buyers will slowly start to come out likely on Tuesday.
Australian Dollar versus U.S. Dollar
Now, with the Aussie US again, we’re approaching a very important level up here near the yearly opening price. And again, we’ve got to be very cautious of a bull trap. You can see the predicted RSI starting to turn down, the predicted differences starting to roll over. In my respectful opinion again only, is that the Aussie needs to get moving here and it needs to get moving very, very quickly, or these extremely powerful vantage point verified resistance zones could cause this payer significant issues. 0.7039 guys, that’s the level we want to watch.
The Aussie must break through this level very quickly in the week or else again, the sellers are going to come out and the payers will likely take over here. But if the S&P continues to rally guys, longs just ignore the overbought condition, it will continue to move higher.
New Zealand Dollar versus U.S. Dollar
The same thing can be said about New Zealand, that if the Aussie continues to rally, the CAD continues to rally, then the New Zealand will also. So again, watch this level up here be cautious of a bull trap. If you’re trading the Aussie, the New Zealand or the CAD, keep a very, very close eye on the S&P 500, because that’s an excellent way to gauge whether we should be buying or selling those particular currencies. So what that said, this is the VantagePoint AI Market Outlook for the week of June the 8th,