Welcome to the Artificial Intelligence Outlook for Forex trading.
VIDEO TRANSCRIPT
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 July 12, 2022.
Now, to get started this week, we’re going to begin with the U.S. Dollar Index where we always do. The key point that I will make here going into this week’s trading, we do have a seasonal pattern on the dollar where it should be starting to move lower here soon. Our MA diff cross has moved to the downside. But again, most of your other markets are down because of this dollar strength. So the second the dollar stumbles, you would likely see gold move higher, Bitcoin move higher, equities moving higher and a number of other commodities.
So right now, we do have our MA diff cross moving lower. Dollar, very strong in Monday trade, but very often Monday trading is not a true price. Very often the market will reverse on Tuesday. So we would be looking for the Dollar Index to, again, start moving lower by midweek. Nothing is 100%. But looking at the indicators, the MA diff cross, one of the most powerful indicators in the VantagePoint software, if nothing else is warning us to be very cautious buying dollars at these levels.
Gold
Gold prices also being affected. But as you can see, we also have a medium-term crossing our long-term predicted difference. We’re in heavily, heavily oversold territory. We have verified support low coming in at 1739. We would look for this particular level to hold, but we need that dollar moving lower.
S&P 500 Index
The exact same thing in this particular case would apply to our equity markets. You can see that I have a makeshift trend line sitting in here. That level coming in at the low 3744. But right now, our key levels for equities this week, we’re looking for the S&P 500 to hold above 1352, or excuse me, 3852 and 3854. If we close below this level two days in a row, that would indicate further weakness in stocks and further strength in the dollar. But my optimism on that remains highly guarded as, again, the dollar is grossly overextended, not just based on the technicals but also the fundamental picture.
Crude Oil
Now, as we look at light sweet crude oil, oil continues to hold its ground here. But we do have a new verified low coming in at 95.10. We will look for this level this week to hold, oil likely to move higher. But again, if we start moving into a global recession, that does not bode well for oil prices regardless of what is going on with Russia. So always keep that at the back of your mind.
Bitcoin
Now, with Bitcoin for next week, as you can see with Bitcoin, the buy signal from Bitcoin is very close to matching the pending seasonality on Bitcoin, which is usually around late July where Bitcoin starts to rally. But I would argue there has been a decent long here that began on July the 4th here on Bitcoin. We’re moving higher, but we must get higher and stay above this T cross long at 21210. You can see the long predicted now at the same level, approximately 21252. Once we clear this level, then we should be able to take, potentially take a run back up towards the end of the month. I’m looking for a move back potentially, again potentially towards the 28000, 29000 mark.
Euro versus U.S. Dollar
Now, as I’m doing this video, I’m doing this video on late Monday morning, we can see the Euro is under heavy selling pressure again this morning. Now, what I will mention that I’ve often talked about in the VantagePoint Live Trading Room is a fake Monday price. So the basic one-way move down on Great Britain/U.S., Euro/U.S. today is highly likely to reverse tomorrow. And when we look at our MA diff cross, that’s our medium-term trend over our long-term trend, we’re coming out of heavily oversold territory. This is pointing to, if nothing else, a corrective move in the Euro back towards 1.0265 and maybe even the 1.0402 level by the end of the month. So we’ll monitor this very closely, but at writing, again, the Euro attempting to challenge parody or very, very close. But be cautious of a bear trap.
British Pound versus U.S. Dollar
The same thing would apply to the pound/dollar this week. Strong verified support low coming in at 1.1876. Once again, our prediction from Friday, we’ve got an MA diff cross, neural index is green, predicted RSI is rising, neural index strength breaking above the zero line. I have very, very often stated that, in my respectful opinion only, we can apply the forecast from Friday to actually Tuesday. And I believe that we could see a violent reversal here on a U.S. dollar strength. So this would be a place of value to sell dollars if, and only if that comes to fruition.
U.S. Dollar versus Japanese Yen
Now, as we look at some of our other main pairs, the dollar/yen making a big move up today. But again, the question is how much more strength can the dollar really produce here? And when we look at it a little bit more closely, this is where I would argue that, again, we’re getting overextended with the dollar. So again, we would look at this very closely, saying we have very, very heavy, three levels of verified support, the lowest from last week, which matches our T cross long at 134.48. Continues to hold. We’ve tested it again on Wednesday of last week. We’re now moving above 137, but I think it is very unlikely the dollar/yen can hold up here. Any crack in the dam, you can see that the indicators are basically running sideways.
But a big push in the Dollar Index on Monday, 80% of the time that is not a sustainable move. And it actually gets the retail traders going in the wrong direction, piling into an already very crowded dollar long trade, only to find themselves underwater on Tuesday, Wednesday, and Thursday of the week. So be cautious with this pair. It does remain bullish at this time. Another strategy you can use with the VantagePoint software is putting limit orders below 135.08, a sell limit order so when the market corrects itself, comes down, shifts off of here and starts moving lower, you can pick up that particular short trade.
U.S. Dollar versus Canadian Dollar
Now, with the U.S./Canadian pair, again, one of my favorite pairs to trade, this one has not been able to penetrate below the T cross long at 1.2909. But once again, our T cross long has been tested. We’ve bounced off of that level. But we still remain in the overall range here, guys, for several months. The high on that particular range, 1.3076, the current low down here around 1.2518. Any short above 130 is actually working. But again, if the global stock markets continue to move lower and if oil moves lower, that will hurt the CAD. But unless we can break through 1.31, shorts still remain heavily biased towards the short side.
Australian Dollar versus U.S. Dollar
Now, as we look at going into our other equity or commodity-based currencies, the Aussie and the New Zealand, strong verified support low coming in at about .6762. This area being challenged on Monday morning. But again, as you can see, on Monday is very often a fake price. Last week, we had the U.S. holiday, the dollar had a big rally on Tuesday, just like it’s having on Monday of this week, only to completely stall and really not make any further gains for the rest of the week despite that very strong U.S. payroll number.
So again, we do have some event risk this week. I believe we have the CPI coming out of the U.S. If that number’s even a little bit soft, that could have the market bailing out of dollar longs very, very quickly. So again, that key T cross long, the .69 level, .6842 on the long predicted, that’s our retracement point for this particular week provided, again, we don’t get a crazy hot CPI number.
New Zealand Dollar versus U.S. Dollar
The same thing applying to New Zealand/U.S. for this particular week. We can see that our verified zones, we’ve got the RBZ, the Bank of New Zealand is going to be discussing interest rates this week. But again, a warning sign that there may not be a lot of downside here on Aussie/U.S. or New Zealand/U.S. But if we get a hawkish comments coming out of the Bank of New Zealand, that will help the New Zealand currency and it will assist in putting some pressure onto the U.S. dollar.
But again, for this week, for all of our major markets are being affected by this dollar strength. Any turn or any dollar weakness, then there will be some very, very good opportunities potentially in oil, gold, Bitcoin, and your major Forex pairs. So with that said, this is the VantagePoint AI Market Outlook for the week of July 11, 2022…
