Vantagepoint AI Market Outlook for May 18, 2026

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Welcome to the Artificial Intelligence Outlook for Forex trading.

VIDEO TRANSCRIPT

Okay, hello everyone and welcome back.

My name is Greg Firman and this is the Vantage Point AI market outlook for the week of May the 18th, 2026.

WisdomTree Bloomberg US Dollar Bullish Fund ($USDU)

Now to get started this week, we’ll begin with that very important US dollar. Now, what I’m looking at to measure the strength of the dollar is the Wisdom Tree Bloomberg US dollar bull fund, the USDU, because I found it to be a far better gauge of the US dollar than the actual dollar index or some of the other instruments that are being used.

Now, case in point here, we’ve come down, tested the yearly opening price multiple times, and each time we’ve gone higher. Now, the dollar has turned around again this past week based around that very hot PPI and somewhat warmer CPI number, but it was not overly hot. But I will concede the producers price was considerably hot, a considerably hotter number. Now, I still don’t believe that that will be enough for the Fed to hike rates at all. I believe that ultimately they will be cutting, but again, that is what is boosting the dollar.

Now we did have an MA diff cross last week coming off the bottom here near the quarterly and the yearly opening, but again when we look at the bull fund the dollar, the ID and the US dollar bull fund, again it’s showing that it’s still bullish on the year and the argument once again would be can the ETFs better predict movement in the major indices, the dollar index, some of your Bitcoin and some of the other commodities. The argument there is there is something to it. Absolutely. Because again weeding out that noise from the European session when the US stock markets are closed, then again that is very, very interesting.

But the bear fund once again, it too has finally broken down below its calendar yearly opening at 18.23.

Now, it is a holiday short week, I believe, in the UK this coming weekend or this Monday. It is a holiday in Canada. So, you’re going to have some thin illiquid markets on Monday. So, be cautious of that. But right now the dollar appears to be on a firmer footing as the market believes that Kevin Warsh, it was determined that he would be hiking rates there. They feel that he will have no choice to actually hike instead of cutting.

Gold ($XAU/USD)

So what is that doing to gold? Well that is pushing Gold down. As you can see, last week I went through a split screen showing how the dollar plays into every almost every trade or investment that we do. The US dollar is somehow correlated to it whether positively or inversely. So for now Gold, the low is 4325. I believe that that level will hold and the ongoing data coming out will not support any kind of rate hikes and gold will turn around.

Now again our TCross long 4673, that is the critical area on the upside. The downside 4325. As long as we can hold above 4325, longs are still in play, but we do have a medium-term crossover. The question is can the long-term also cross over?

SPDR SPY ETF ($SPY)

Now on the equity side of things, the SPY, they held up well on Friday considering the DAX and a few of the other global indices, but obviously if the market believes the Fed is going to have to hike, that could put downward pressure now on the SPY. So your key support level, the TCross long 725 and the monthly opening price at 721.25.

Primary trend still up while above 685.71, but we could test that level next week.

Russell 2000 Index ($IWN)

Doing a comparative to the Russell, we can see the Russell has already broken down below the TCross long at 207.45, but firmly positive on the quarter and on the year. So, a corrective move lower is perfectly normal once the market digests some of this inflation data.

DAX

Now when I look at the DAX, the DAX very, very highly positively correlated to the EUR/USD forex pair and as I’ve discussed over the last several weeks and several months for that matter, that if the euro drops it very often pulls the DAX down with it. So the interest rate between the ECB and the Fed, that’s going to probably widen here if the Fed does end up hiking and the ECB cuts or just stays on hold. So it does favor the dollar which could put additional downward pressure on both the EUR/USD pair and the DAX.

So again the yearly opening price we couldn’t hold above it at 45.86 and now our TCross long 44.82. Shorts into that level are reasonable at this particular time as long as you are willing to keep your stops above the calendar yearly opening.

Volatility Index ($VIXY)

Now again when we measure the VIX, the short-term VIX futures are 95% positively correlated to the dollar index. Now I’m not getting a lot of movement out of this to the upside. We are above the yearly opening price but again if the VIX turns around and goes higher, then that will confirm additional dollar strength is coming.

Now, in most cases, the dollar would not see any real strength again until August, September, but the recent inflation data could change that. And if that’s the case, then the VIX would have to break through the TCross long at 277.

Bitcoin ($BTC/USD)

This is also now having a negative effect on Bitcoin. Bitcoin had a very good week. It’s having a very good quarter actually. And now that inflation data is again dollar up, Bitcoin down.

So all eyes will be on the dollar next week here guys. Remember thin illiquid markets on Monday. Don’t measure your price on that. Look for Tuesday, late day Tuesday, early Wednesday on the dollar to see if it’s holding its gains. If it’s not, then Bitcoin can rebound.

Now, we’re still above the quarterly opening and the monthly opening. The quarterly is in yellow. Monthly is in red. The yearly opening price is again in blue. So the primary trend on Bitcoin is clearly down, but it is having a pretty decent quarter. So again, watch your dollar very closely.

United States Oil ($USO)

The last few weeks I’ve avoided discussing oil at any length because again I don’t think we should get involved. As long as the US-Iran-Israel conflict is going on, prices are being manipulated. But for now, the pricing on the USO, very hard to believe that I’m even going to say this. The TCross long 139.06.

So, I’m sure there’s nothing they would love more than to keep these oil prices or these gas prices up permanently, much like Europe, right? So, we’ll see. But now, for now, TCross long 139.06. That is the level you want to keep an eye on. Can we hold above that critical VantagePoint level?

Euro versus US Dollar ($EUR/USD)

Now, as we look at some of our main forex pairs here, guys, again, they’re all the G7 pairs are based around the US dollar. So, the EUR/USD obviously under pressure, but we remain positive on the quarter. If and when the euro is going to turn around, it will be at 1.1553. And I will be watching the VantagePoint indicators very closely for any warning sign as we approach this particular level.

Now again I think 1.1553 is a reasonable target for next week, but I also believe that level will hold and we will reverse as the incoming data does not actually support the concept of rate hikes. Again this is transitory guys. If the war between the US and Iran ends, then oil prices go lower. There’s your inflation gone. So this whole thing can change very, very quickly.

US Dollar versus Swiss Franc ($USD/CHF)

Primary trend clearly is down. 79.36, the yearly opening price. I would look to short into that particular area providing again that incoming data doesn’t support rate hikes and we start looking more at cuts. So this is a corrective move higher and again you can see we had one very similar to this last month at the end of the month only to fail and drop down and make a new low on May the 8th. So something very similar I anticipate will happen here.

British Pound versus US Dollar ($GBP/USD)

Now the GBP/USD once again same as the euro guys and it’s the same trade. You’re either buying or selling US dollars against these G7 pairs. So the quarterly opening here on Great Britain US 1.3227. I would look to reinstate potential longs down in that particular area. You can see the congestion down over here at the beginning of the quarter. The pound dollar also having a very good quarter.

Almost mirrors Bitcoin, doesn’t it? So again, the dollar turns, all these forex pairs turn, oil turns, the indices turn. And again, it’s been quite a while since I’ve seen the neural index strength this low. Doesn’t mean it can’t go lower, guys. But again, that quarterly opening, keep a very close eye on that level.

US Dollar versus Japanese Yen ($USD/JPY)

Again if the market believes the Fed is going to hike then the carry trade is back on guys and USD/JPY heads back to the 160 level. So right now again we’ve been pushing down below the yearly opening price and it only reversed when we got that CPI and PPI data last week and the market now firmly believes that Walsh is going to hike, but I don’t believe that this guy is going to do that. I believe him to be very competent and to look past this short-term inflation that really is not that relevant. And again, how would hiking rates help anybody? If oil prices are high, you should be cutting, making things easier for people. And I believe that is the argument that he will successfully make ultimately with the help of President Trump. So, we’ll see.

But for now, the market believes the carry trade is back on. The VP Tcross long 158.05. That’s the level to keep your eye on, guys, for next week. If there is a long trade, it’s going to retrace to that level and then rebound from there.

US Dollar versus Canadian Dollar ($USD/CAD)

Now the USD/CAD pair again, the Canadian dollar is still yes it’s a commodity currency, but it’s ultimately still an equity currency like the Aussie and the Kiwi. So the Canadian dollar retaking, getting back over the US dollar excuse me is retaking the yearly opening price against the Canadian dollar. So 1.3726 guys, all your action is going to be around this level.

The TCross long that’s coming in at 1.3691. There’s all your support right there. So, the savvy trader could buy off the yearly opening price. If you believe that this pair will still reverse and go lower, then you would put a sell stop below the TCross long, say 1.3680.

It breaks down below there, takes the pressure off the top side, and then you target back down to the monthly opening 1.3582. Because again, guys, this is not a recap of something that’s already taken place. It’s an outlook as to anticipate what’s going to happen next week with target levels. Right? So again, I do see an MA diff cross forming there that could be a very good sign for Bitcoin, the major global indices and with a weaker dollar and any settlement between the US and Iran, the dollar will immediately move lower.

Australian Dollar versus US Dollar ($AUD/USD)

Now again, as I’ve already said with the Aussie and the Kiwi, very susceptible to movements in the equity markets. So right now we finished very poorly on the Aussie to finish the week, but that’s normal for a Friday, guys. And this entire calendar year, when you look back over a six-month period, the Aussie has only been going up, making all kinds of new highs, making higher lows.

The market will argue right here that it made a lower low and that’s bearish, but it actually wasn’t. It actually turned around and went and made another high. Now also remember here that pre-COVID this pair was trading above parity. That’s a long way from 72 cents guys is all I can tell you. So for now ultimately I believe the US dollar, well and again the RBA is saying they’re going to hike. So the interest rate differential still slightly will favor the Aussie going forward unless the Fed hikes.

So yes, we have a medium-term crossover, but we don’t have a long-term crossover. So watch out for a reversal. As stocks turn around, you want to start buying the Aussie, the Kiwi, the CAD, the Euro, the pound. But again, we want to see what the market actually believes.

New Zealand Dollar versus US Dollar ($NZD/USD)

And the NZD/USD is no different here. It’s virtually the same trade, but the Kiwi took a bigger hit on Friday than what the Aussie did. But they both remain positive on the calendar year. The Kiwi under more pressure clearly than the Aussie. The Kiwi is the weaker of the two. But for now, very often a big long down bar like this on a Friday, you get a little bit more movement to the downside on Monday and then on Tuesday where we reverse and go higher.

So anticipate another choppy volatile week until we get a clear picture on the US inflation and what the incoming new Fed chair is going to do. But with that guys, with this volatility, there will always be opportunity when using advanced intermarket technical analysis. So with that said, this is the VantagePoint AI Market Outlook for the week of May the 18th.