Vantagepoint Forex Weekly Outlook for the Week of July 15th, 2019
The Vantagepoint Forex Weekly 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 the U.S. Dollar, Gold, Crude Oil The Stock Market and the Major Pairs.
Hello everyone and welcome back. My name is Greg Firman and this is the Forex Weekly Outlook for the week of July the 15th, 2019. Now to get started this week, we’re going to begin where we always do with that very important US dollar index. Now as we can see the dollar coming under pressure from the FOMC, talking about rate cuts this month.
Again, I think I’ve made my position very clear that the incoming data is not overly supportive of rate cuts in my respectful opinion, so I’m not expecting a half a basis point cut this month, but it sounds like pounds is going to move forward with the rate cut, but I suspect it’s going to be a one-off. So we’ll see, but right now the dollar is under pressure from this.
Now, when we look at our main indicators from VantagePoint, when we look at our verified resistance zone up here combining with the signal of the medium term crossing the long predicted difference, warned us basically three or four days before this big move down happened that something wasn’t right here.
The dollar coming under pressure. Now we’re sitting at about 39.1 on the predicted RSI, which is suggesting a potential breakout on the dollar. But again, in my respectful opinion, keeping it simple, we are still well within the overall range, but we’re going down into this 95.30 area and the top side, again coming in at or about the high, which is 97.20 we’re unable to clear 97.20 and down we go.
But again, the leading indicator here, the medium term crossing, the long predicted difference, combining that with the Neural Index basically, gives us a very, very strong signal to sell US dollars. Now, my concern here is the dollar is closing below our T-Cross long, which is our critical pivot area of 96.49 but not decisively. And again, when we look at the CPI numbers coming out from last week, they were hotter.
They’re not cold numbers at all. They’re not even warm, they’re rather hot to be honest. So I’m taking that with a bit of a grain of salt. But as I’ve discussed in many different presentations, the dollar is normally weak around the middle of the month. This is normal. It doesn’t mean that the dollar is just going to sell off and it’s going to go into a long bear market. I don’t think we’re there yet.
The Gold Market
Obviously, it could be coming in the near future, but for now the dollar is following that monthly cycle where it’s weak in the middle of the month, strong at the end of the month and strong into the first week of the new month. Now, as we look at how that dollar move is affecting gold, we can see very clearly based around the inner market correlations that we’ve had multiple retracements back to our T-Cross long.
One on July the 1st. We had several other ones after that, July the 9th. We had another retracement to the exact same area that was on July the 5th. Now, when we look at this, that critical TCross long 3095 continues to hold. As long as we’re above that, we’re good.
But when we look at the medium term, again, crossing the long term predicted difference with the Neural Index refusing to go below the long term predicted difference, refusing to go below the zero line. This trade is now turning around yet again. I’ve been a strong advocate for buying gold since January 1. Gold’s had its ups and downs, but ultimately it’s pushing higher.
Now, if we can break above these verified zones up in this 1430, 1435 area, then gold could see a much bigger move to the upside and I believe that that move is imminent at this particular time, but it’s going to be effected by the FED. Now, one of the more confusing things is why equity markets?
The more specifically the S&P 500 and the Dow are going higher when the global indices are not. That is a huge red flag for me in my respectful opinion. This is a FED induced rally and the FED can only push this thing so far. If the FED is talking about cutting rates, then they must be suggesting, I would assume a recession is coming and we know that stocks don’t do well in a recession.
So for now the equities are moving higher, but my optimism on any continued strength in this in the longer term or even the medium term remains heavily guarded. So for next week, 2964 our TCross long, we’re closing the week out here at 3015 a big move up, but again, 100% FED induced.
This is not based on real world demand because if it was then the global indices would be going higher. We know that the markets are now… It’s confirmed guys, the markets are globally connected. So again, if this is in a factual move, then we would be looking for the Nikkei, the DAX maybe the Brazilian index.
All of these things should be going higher and they’re actually not. So once again, my optimism on any further upside on the S&P 500 is likely to be incredibly limited. Now when we look at oil for next week, again oil is moving up with the stock market, but we’re encountering this significant resistance around 60.38 which is which is clearly identified by the verified zones here.
So we’re probably going to see a little bit of a move, a higher maybe towards 64.21 but again, I think that oil is on borrowed time. Oil the seasonality here we could hit as high as $67 a barrel again, but that’s because we’re in summer driving season here guys. There’s real world demand for oil and even if they isn’t demand, they always seem to ding us at the pumps, don’t they? In July and August.
So probably look for a little more upside on oil. We can see our medium term crossing the long to the upside with our Neural Index, but the RSI is losing some momentum already, which does go to my point about the S&P 500.
Forex Weekly Outlook for Major Pairs
Euro/U.S. Dollar (EUR/USD)
Now, as we come into our main forex pair, obviously the Euro has clearly enjoyed the dollar weakness, but again, the question is how far can that weakness go? And again, the Euro zone is not looking any better than the US in my respectful opinion, it’s worse. So while the Euro has recovered off of these verified zones, that’s fantastic here.
But the one thing we’ve got to watch for again is can it move higher? Now, when we look at this critical pivot area here, 1.1269 the Euro, it’s absolutely struggling in this area. Now, if the dollar index can extend lower than that, we’ll push the Euro higher. Gold has a very high correlation to gold contracts also.
We’re going to be watching this and waiting, but we’ve had a firm buy signal in here when the medium term crossing the longterm predicted difference combined with the Neural Index. That led to a very nice move, but we’ve got to clear.
Basically I would like to see us break free and clear of the 1.13 area and then we can look to extend longs, but right now again that TCross long, you can see we’re closing rate on that number. So once we break through, we should see the euro extend, but it’s not a done deal here guys, there’s no free lunch here guys.
U.S. Dollar/Swiss Franc (USD/CHF)
The euro could very much also succumb to the economic data. Now with US/Swiss franc this week, once again here guys, a number of analysts and pundits are very perplexed why the dollar/yen did not move higher. Why US/Swiss franc did not move higher based on what the FED is talking about, but that’s a leading indicator.
We know that if gold extends higher then payers like US/Swiss franc and US/Japan will absolutely move lower. This is what most analysts miss is that direct inner market correlation. So this big sell-off rate off our T-Cross long at 0.9893 was a very, very good trade. So I would say that it’s very likely that we’re going to target the lower end of this range around 0.9737.
We’ve got our medium term crossing, our long predicted difference. Again, guys with the Neural Index, a leading indicator that this was going to go lower, but we’re not quite on the break point with the RSI, the predicted RSI sitting at 41.5 we’re looking for a break of the 40 level on the RSI to really get this thing moving.
British Pound/U.S. Dollar (GBP/USD)
Now, as we look at the pound/dollar going into next week, we’re recovering off this other end. I’ve been a strong advocate for longs on this particular pair, but we’ve got to break through this 0.12589 area. You can see on Thursday and on Friday we’re closing right up against that level.
Medium term, again, crossing the long term predicted difference. You should always have your charts set up like this guys, because again, this will tell us not only trending moves, but counter trend, contrarian positions are usually very, very good. Now our RSI little bit steep on the angle here.
But 60.9 it’s looking like it’s going to go here, but we need that dollar index moving lower guys, that’s what we really, really need here. So right now we clear 0.12589 close above it for one or two days in a row and we should be good to go for for longs here.
U.S. Dollar/Japanese Yen (USD/JPY)
Now, with the dollar/yen for next week, as I was saying a moment ago with the dollar/yen, a number of analysts very perplexed by this move where, I have not flip flopped on this with my own clients. It’s a sell the rally. I believe that the equity market rally is fake.
And ultimately the brokers, the banks, the trading firms, they’re pushing the market higher and getting ready for an epic crash. So if I’m looking at gold, if I’m looking at dollar/yen, if I’m looking at US/Swiss franc, it doesn’t support the longs on the equity markets. That’s my rationale over the years.
Good, bad, right, wrong, whatever way you want to look at it. I know what I know. So when I look at this right now, the dollar/yen, the key level is 108.22 if the equity markets continue to break higher for multiple days in a row, we could see this thing turn around.
However, a break of this area down here, this low area coming in down around 107.53 and this further verified zone down at 106.78 if we lose these two levels, then that is just a matter of time before the S&P 500 crashes. I believe that these are leading indicators that are telling us just that.
So when I look into this right now, dollar/yen is gaining momentum, but this can be a very frustrating pair to trade. I don’t dispute that. We’ll keep an eye on these verified zones, but right now the indicators and the software are saying that we are going lower and selling rallies is the better play.
So right now we’ll watch these levels around 108.20 if we hold that level and more importantly if we hold below this verified zone high at 108.99 basically, shorting up into this level is a very, very decent play.
The Commodities Currencies
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, with our three main commodity currencies, US/CAD, AUS/US, NZD/US, all very similar traits. Now, again, a lot of the pundits are getting very excited about a breakout on the US/Cad pair. I can’t say for sure that I’m in that camp at this particular time. I think that I have seen over the years multiple, multiple bear traps setting up down in these particular areas.
And as you can see, we’ve got support all the way down into the 1.2950, but right now, if we’re talking about interest rates skies and the fact that the US is talking about cutting. The Bank of Canada is also on hold. And in most cases if the US dollar is a little soft, usually the Canadian dollar is also.
The reason I say that is because the two economies are so connected. The number one trading partner, even though Canada tries to get something go with China, it’s pretty much failed miserably with the Huawei thing. Canada is holding the CEO, they want her back, yada, yada, yada.
We look at all of these things and right now Bank of Canada is on hold, FLMC is on hold or maybe cutting. Then if the FLMC does end up cutting, in my respectful opinion, the Bank of Canada is likely to follow not too long after. So not exactly … It could be a good short here guys, but if I’m shorting this thing, I want this up higher up towards this 1.3088 area.
I think it’s a potentially a very dangerous short down here. And the reason I’m saying that is because of these verified zones and when you have these verified zones, the brokers usually set up bull and bear traps around them. So don’t get caught on that trap.
We want to see this thing push lower, maybe come back up and retrace and always use your long predicted too. That key pivot area now 1.3078 so all of our resistance guys is much higher than where the market is right now. So be very, very cautious on shorting this thing down around 1.29 or excuse me, down around this 1.3030, 1.3030 area.
Australian Dollar/U.S. Dollar (AUD/USD)
Be Very, very careful. Now, AUD/US, NZD/US, they usually respond very well to gold moving higher. So when I’m looking at this right now, as gold moves back up, you can see that the Ozzy is following. We’ve got a fresh buy signal here on the medium term crossing, the long predicted difference. The RSI is perfectly positioned for an advancement, but be careful again up around this 0.7030, 0.7050 area.
Very dangerous up here with these verified zones. We’ll continue to monitor this, but right now we want to see if we can get above… I think it’s imminent that we’re going to 0.7068. The question is can we break through this. Now if we do, we’ve got a real shot of getting back up towards this targeted area up at the top of the verified zone here.
The top of that particular verified zone. Sorry here guys, I’m just struggling with this a little bit. If I back this a bit, maybe that’ll help me a little bit. Okay. This is the big level back up here. Right up around this, approximately the 0.7205 area. Right now it looks like we are going to be heading to that area.
We’ll watch right now the immediate level that we have to break through though to get there is we must get through 0.7068 if we have any shot of going back to 0.72. The indicators right now in VantagePoint are saying we are going higher. Now, the signal on New Zealand is going to be very, very similar here guys.
New Zealand Dollar/U.S. Dollar (NZD/USD)
When we look at the charts, we’ve got the same set up here, the medium term crossing, the long predicted difference. Our downside pivot area, we’re looking to hold above 0.6641. With the AUD, we’re looking again, if we bring up our key pivot areas, T-Cross long 0.6973 that’s our buyer zone guys.
So as long as we’re holding above that area, both AUD/USD and NZD/USD are likely to move higher. But you can see that the position of the RSI, the position of a number of these indicators are very, very similar.
But when that medium term crosses the long term predicted difference in combination with the Neural Index and the RSI at a reasonably level like 0.6065. The probability that we go higher next week is very, very strong. So with that said, this is the Forex Weekly Outlook for the week of July the 15th, 2019.