Welcome to the Artificial Intelligence Outlook for Forex trading.
VIDEO TRANSCRIPT
Hello everyone, welcome back. My name is Greg Firman, and this is the Vantage Point AI Market Outlook for the week of January 24th, 2022. Now to get started this week, we’re going to begin where we always do with that very important US dollar index. Now, just a quick recap of what indicators we’re going to be using this week. We’re using bars, not candles. We’ve got our long-term crossover, our long-term difference, our medium term predicted difference, the neural index, the point in time, set at the yearly opening price, very important in the first quarter, the predicted RSI, the short term difference, the triple EMA cross, that’s been modified to only show the T-cross long, and of course, the very popular verified support and resistance zones.
U.S. Dollar Index ($IDX)
So when we get started this week, we can see that the dollar is positioning itself directly up against the Vantage Point T-cross with an imminent break likely coming next week. Now, what I mean by that specifically is that we have the predicted difference has crossed to the upside with the neural index. Our predicted differences are rising above the zero line. We’ve got some momentum just above the 60 level on the predicted RSI. And of course, we have that very strong, seasonal pattern of the US dollar gaining strength in the first quarter towards the latter part of January, actually, all the way into March. So we’re looking for this modified crossover. You can see with this particular crossover I’m using the long predicted, and I’m waiting for it to cross over the T-cross long. But first and foremost, I want the market to move above both of these two predicted moving average, much like it’s done back here, where the market will position itself just slightly above, or on top of, the predicted moving average that will eventually lead to this type of move.
I believe we’re a matter of days away from that happening next week. So again, our main resistance point remains the T-cross long and the yearly opening price, that are both at almost the exact same level, 95.74 and 95.64. So 95.74 and 95.64, excuse me. So as soon as we clear this level, that will be the trigger for the dollar to make its likely move back towards the 96.90 mark. Now, when we look at gold, gold is broken above its yearly opening price. But again, only on the one day. We’re managing to hold above that, but in most cases, gold and the dollar do not go up and down together. But there is a time when they can do that, when we have a period of high volatility with the conflict between Russia and the US. So basically from a comic standpoint, you could say, well, this is Russia, meaning the price action, and this is the Ukraine border, and it’s imminent that they’re going to move across that. So again, think of that the same way.
Gold
With gold, we’ve pushed higher, so it is possible for gold and the US dollar to move higher at the same time. That’s something we would watch for this coming week as that flight to safety trade kicks in until we know which way this is going. But right now, we do have signs of weakness in gold. Our predicted difference, our MA predicted diff has crossed to the downside, but the neural index is not in agreement. We have somewhat of a reverse check mark on the predicted RSI, suggesting we’re losing momentum here. So if we’re losing momentum in gold, that’s yet another inner market correlation that points towards a dollar rally.
S&P 500 Index
Now with stocks this previous week, they have finally started to show a crack in the dam here. But once again, as I had stated in last week’s weekly outlook, my concern is that we are not getting above this price on open.
The price on open is set to the yearly opening price, which I had stated is a very lofty level at 47.70. You can see that we’ve stayed firm here, but as this modified crossover starts to take hold, we can see that the market, as it starts to tank, it retraces back to the T-cross long. We’ve failed at that and we’ve pushed lower. Now in most cases, like I said before, I can’t remember too many years where the S&P 500, or equities in general, did not have a positive January. So there still is a scope for recovery, but here is what you really want to watch. As you’ll remember from the previous weekly outlooks, this is the level that I’ve been watching this entire time, 44.85 or a break on the upside, up here. So we are looking for a break of one side or the other in this channel, and that has come to the downside.
So our former heavy support at, approximately the 44.85, area that now becomes very, very significant as this channel has been broken. Now it has been broken. Just one of the things that I found kind of comical that really started to push this down was Netflix dropping. Imagine a $500 a share stock dropping 20% of its value in a day or two. That extremely volatile. That is aided to spooking the market here. And they’re starting to push out of it. Now, what I will point out, the predicted RSI 9.6, the predicted differences are over minus 100. So yes, the market is oversold, but that doesn’t mean it can’t go lower. If there’s further conflict between the US and Russia, then that is not exactly a risk on environment, so we could see further pressure on stocks.
If we look at this from a six-month perspective using the verified zones, that’s pointing us to a low at approximately 43.10. So I suspect we will move towards that area, and then we’ll watch the area between 43.10 and the additional verified support low at 42.52, for the S&P 500 to turn around, if it can turn around. Now, when we look at light sweet crude oil, it’s starting… You can see a crack in the dam here too, that it’s starting to give way.
Crude Oil
As stocks pull back, oil is struggling to make any further gains. So going into next week, our case support level, again, we’ve got our yearly opening price at 75.19 and our T-cross long at 80.53. This is your main support here. Now, the predicted low for Monday, I personally don’t believe that that predicted low will hold.
I think we’re going to push lower than that, below 83.71, as volatility picks up. But the indicators, right now, are saying that this price incorrect in oil is corrective in nature. It’s not a new down trend yet, so we’ll watch this. Again, very important T-cross long at 80.53, and the yearly opening price at 75.19 to make sure that these levels can hold. If they can’t, then we will see oil pull back much deeper. But at this particular time, that appears very unlikely.
Bitcoin
Now, Bitcoin under pressure, and you can see it following the S&P 500. Bitcoin below its yearly opening price. The S&P 500 below its yearly opening price, as is the NASDAQ, the Russell, and the other major indexes. So what we will be looking here for now is for Bitcoin to find some kind of support here. In my respectful opinion, that level is going to come in potentially around 37.40, 37,400, excuse me.
But we could pull back deeper than that. But again, we will be looking for a buying opportunity here as we move into a heavily oversold territory. But if the S&P 500, when it turns back up, guys, your inner market correlation is the S&P 500 to Bitcoin. Meaning if the S&P turns positive, the NASDAQ turns around, starts moving back up, that will be your trigger to a look for additional longs on Bitcoin. Now, as we move into some of our main four X pairs, the Euro has put up a valid effort here, but I don’t know how much longer it can hold. Again, only in my respectful opinion, the inner market correlation, that positive correlation, that the Euro has to gold contracts is the only thing holding this pair up, but it would appear that a fall is imminent.
Euro versus U.S. Dollar
In most cases, that will be at the end of the month. So we would look for the Euro to still hold some kind of gains for a day or two into the start of the week, but we would definitely be looking for a selling opportunity. The yearly opening price, 113.67, our T-cross long at 113.48, and are long predicted at 113.48. This is clearly identifying all of our major resistance points and a potential sell entry. When we look at Vantage Point’s predicted high for Monday’s trading, we’ve got 113.82. That is a more than reasonable area to look for a short anywhere near this particular area. One thing I would advise is that the neural index, for whatever reason, based around the correlation of 31 other markets, is saying we’re not ready to go lower just yet. We’ve gone from red to green, and we’ve got the predicted RSI trying to rise up, but this is Friday trade, guys, and that’s perfectly normal.
So once again, when we look at this from a predicted standpoint, we have all of our major resistance points, and the Vantage Point predicted high at or about the same level. So good, bad, or indifferent, this is the perfect place to start to look for shorts for pending US dollar strength.
U.S. Dollar versus Swiss Franc
Now, with that US dollar strength, we could see the dollar gain against the Swiss franc. We’re sitting right down here. Our price on open is set, again, at the yearly opening price at 9109. So we could see a minor push lower, and then this pair start to turn around towards the middle or latter part of the week on the dollar index, turning around. Now the Swiss franc is a risk off currency, as is the Japanese yen, so longs are risky, but we’ll be waiting for the Vantage Point software to tell us that we’re getting ready to turn here.
More specifically, our neural index will turn, our predicted RSI will reverse and start moving back up, and we would look for these verified zones to hold down at this 90.78 level. So if you’re so inclined to get into the long trade early, 90.78 is a more than reasonable area, or you can use the predicted low at 90.78, both of which are more than reasonable for this pending reversal in the US dollar.
British Pound versus U.S. Dollar
Now the British pound has again held its ground, but it’s slipping here also. We’ve stalled exactly on the T-cross long. Our yearly opening price, 135.31, so the pound dollar could be set for a tougher week. But let’s remember that the UK is opening back up for business, lifting a lot of those restrictions and mandates. We’ve also got the Bank of England talking interest rates here.
So even if the dollar does strengthen, it doesn’t necessarily mean that the pound is going to sell off. I would keep a very close eye on this, because with that known US dollar cycle, we’re expecting strength in the dollar anyway. It’s a question of for how long. So right now, these levels are very, very important. We’ve got our predicted low at 135.28 for Monday’s trading. We would look for this area to hold. My concern is that these predicted differences are breaking down below the zero line. When we look at this trade more closely and how the pound dollar has got to where it is, we would click F6 on our Vantage Point software. We can see a short term crossover taking place way, way up here, as the predicted differences start to drop. Then we have our medium term crossover that is just crossing over now.
So all we’re looking to do, if this is really a bigger move to the downside, we must break below 135.31 and stay below that particular level. Now, as we look at the dollar yen for next week, the dollar yen we’ve been for casting working on this one in the Vantage Point Live Training Room also. And we’ve had a nice, slow gradual grind lower here.
U.S. Dollar versus Japanese Yen
The problem that the dollar yen is going to face is number one, pending US dollar strength based around the analysis on the dollar index, assuming we will break through that critical level. If that happens, we could see the yen start to weaken again. Now that major support low is 112.54. I’m still looking for a potential test of that area, but we must get through 113.49. But either way, when we get into this 112.50 area, the yen is likely to reverse.
Now our medium term crossing our long-term predicted difference is already warning of that. But again, these latest developments between Russia and the US are strengthening the yen. The yen and the Swiss franc, and the Euro to some degree, will follow gold prices. So if gold prices back off, that’s when you want to look for shorts on the Japanese yen or longs on the dollar yen. So, again, right now we will be watching these prices very closely, but further downside to begin the week is likely.
U.S. Dollar versus Canadian Dollar
Now with the US Canada, all eyes are going to be on this pair here, guys, next week with the Bank of Canada statement, and whether they’re going to hike. In my respectful opinion, again, only, I believe the market is misinterpreting the flip flopping. Everybody’s so concerned about the Fed flip flopping back and forth, but the Bank of Canada is doing it worse.
So one minute they’re hiking for sure in the first quarter, the next minute they’re not. Then in the last statement, or from what I can remember, because they keep flip flopping, is they said April at the soonest. So the market’s already convinced itself, based on Canada’s inflation numbers, that they’re going to hike. So if they don’t, they’re going to be grossly disappointed, and they will bail out of the Canadian dollar. Cross reference that to lower oil prices and lower equity prices does not equal a buy on the Canadian dollar, but actually a buy on US dollars against the Canadian. So we are not getting any sellers down here. We’ve been stuck in this range on US Canada for a while now, between 124.50, we’ve got the VP T-cross long at 12609. I believe at this time, it’s imminent that we will pressure that T-cross long by midweek, maybe even sooner.
So what we would be looking, as these predicted differences are rising, our predicted RSI is warning that we have momentum building here. So using those verified zones down here, once again, we’re just looking for the market to overtake the T-cross long. But once again, when you look at how a trade develops coming all the way down to the short term crossover, it’s very conflicted in here. Our medium term crossover is just at the crossover point now. The reason I want to show this, this week, guys, is because there’s an actual point where all of this is happening, 125.41, 125.41. The predicted moving average is sitting right on the standard moving average getting ready to cross. So we could see the market move up from 125.41. We’ve closed the week at 125.67. We’ve got the Vantage Point predicted low at 125.35. So a long is more than reasonable at that particular level. Just make sure that you’re keeping your stops below those very popular, and very useful, verified support lows.
Australian Dollar versus U.S. Dollar
Now with the Aussie and the New Zealand, once again, if we’re having problems with the CAD, the CAD is the strongest of the equity/commodity based currencies. And as you can see, there’s weakness forming in the Aussie and the New Zealand again. So we were breaking down… First and foremost, guys, were below the predicted low here, the year, excuse me. Below the yearly opening price. That’s price is coming in at 72.64. So essentially, we’re short while the market is below that level, but now we’re breaking down below the T-cross long at 72.02. Again, only in my respectful opinion, based on the many years I’ve been doing this, I usually don’t see this kind of weakness in the equities and in these equity based currencies, more towards the middle of February.
So not sure if this has any legs to it, but based around the Vantage Point indicators, it certainly looks like it does. We have our MA diff cross with our neural index, and we have momentum building on the predicted RSI. But we’re still stuck in this channel. We’ve been in this channel since December 20th, and you can see that prices actually, we’ve been making higher lows. Well, we’ve made a couple of… In 2022 here, we’ve made one new high, but it’s nothing to really write home about here. So again, we will monitor this, but for next week, the biased is clearly to the downside.
New Zealand Dollar versus U.S. Dollar
The same would apply to your New Zealand currency, but it’s taking a bit more of a hit here, largely because of that Aussie jobs number the other night, which was way stronger than what we anticipated and that put upward pressure on Australia and New Zealand.
So this is what I mean, we don’t want to rely, or think that we know, what these economic numbers are, because they always come out different. I don’t think there was a single economist that suggested the Aussie report was going to be good on Wednesday or Thursday night. And it was a blowout number, but even that number is not enough to keep the Aussie afloat. If nothing else, it gives us the opportunity to get a better price on shorts. So what that it said, this is the Vantage Point AI Market Outlook for the week of January, the 24th, 2022-
