Welcome to the Artificial Intelligence Outlook for Forex trading.
VIDEO TRANSCRIPT
Okay, hello everyone, welcome back. My name is Greg Firman, and this is the Vantage Point AI Market Outlook for the week of December 30, 2024.
U.S. Dollar Index
Now, as the final presentation for 2024, we’ll look at the major markets. Each week, what I try to do is hit all of the major markets in trading—our indices, our commodities, our currencies—and it usually runs between 15 and 25 minutes. Now, the reason for that, it sometimes can run a little bit longer, is because of the market conditions. But, under no circumstances should we keep things short just to speed things up. We need to do a thorough look at the markets to make sure we understand what actually is happening.
So, to begin this week, we’ll begin with the Dollar Index. Once again, the dollar having a decent week here this month. Once again, we have to be very mindful of measuring performance from the proper anchor points for the month of December. The dollar has bucked the trend and is actually up 2.04%. That’s putting pressure on commodities like Gold. It’s keeping the equities down, but we should start to see that turn around. Our MA diff cross here has hit a peak once again, around about December 19th to December 20th. And as you can see, we’ve been running along this area the entire time. I believe the verified resistance high back here is the one to keep an eye on, to see if we can actually stay above 108.07. But once again, the indicators in VantagePoint are pointing lower, the neural index, the neural index strength, all of these things.
S&P 500 Index
When we do a comparative analysis to the equity market, it’s very important again that we’re not using that rolling performance model, guessing at what the actual performance is for the month of December. The S&P and the SPYs are down 1.4%; they are not up, that is not factual, they’re down. Now, when we look at the week, it’s moderately up. The SPYs were moderately up 0.58% on the week, but again, they’re rebounding. But when we look at the overall performance for the month of December, it hasn’t been good, and that’s based on using a proper anchor point of the beginning of December to where we’re currently at.
The indicators and VP are very mixed here. Our predicted medium-term crossover has taken place, but our long-term is not, and we’re losing momentum on that predicted RSI, suggesting we could move lower going into the year end.
Now again, with a comparative analysis to that, which is extremely important, is the SPYs, which is the exact same trade. We can actually see for the month the SPYs are currently down about the same, 1.05%, slightly up on the week but next to nothing. So again, if you’re moving these anchor points, taking in part of October, part of November, then comingling those months usually leads to the wrong price. So again, if the stocks are going to rebound, then that is possible because the SPYs and again the S&P are down over 1% on the month. So we could see a bit of a rebound here, but we can assess that the SPY is the exact same signal.
Now, when we do that comparative to the European equity markets, the structure of that look somewhat different when we compare it to the DAX. The DAX is actually truly up in the month 1.78%, and on the week, well, it’s a little bit flatter on the week, but it’s had a good month, better than the US equity markets. That partly because of the ECB rate cut, the dovish guidance, the Fed switching gears, saying maybe he’s not going to hike anymore or as much in 2025, and that cooled off the US equity markets. Then the European equity markets are looking a little bit better.
Now, what we can assess is that we have a clear Buy Signal on the DAX, the pink line over the blue line. This is suggesting the DAX is going to have an up week next week. I would like to see us get above the T cross long at 19,999, but again our neural index strength is perfectly positioned with the neural index, the MA diff cross, and the predicted RSI. If it gets above again, above the 60 area, then we’ll have momentum building. So going into the year end, the DAX looks a little bit the European equities look a little bit better than the North American equities, but I believe they both can rally at the same time.
Now, when we also want to make sure, again, we don’t want to cut things short here, guys. When you cut things short, people get lazy, they ignore intermarket correlations, they ignore these things, and say, well, what do I do, do I buy or sell? Well, if it was just that easy, guys, then we’d all be millionaires. We need to look at things thoroughly, regardless of what market we’re trading.
Volatility Index ($VIX)
So when I look at this, the VIX, excuse me, the VIX is up 5.76% in the month of December. That alone tells us that the SPYs and the S&P are not up, they’re actually down. So again, unless that VIX can turn lower or produce some kind of stronger sell signal than may have a problem. Now again, very conflicted with the neural index, the neural index strength. We’re seeing, I’m seeing, uh, very, very confused, a lot of confusion here. So again, are they hedging their bets again, using the VIX? That’s possible, but again, what we want to make sure we understand is which is up. The VIX is up, the S&P is down, the major US indices are down, and this is where the VIX comes into play here.
So, once again, we’re not making any new highs in the VIX, but we still have to keep an eye on it because we’re above our yearly opening price, above the monthly opening price, and we’re challenging that VPT cross long at 17.26. If we’re holding above that next week, then the US equity markets are unlikely to move higher.
Gold
Now, when we look at some of the other main markets here, of course, Gold, gold is up, or excuse me, down 1.18% on the month. Once again, that’s not a consistent trend in the month of December. In most Decembers, gold is actually significantly up, but there’s the Fed has kind of turned the tables on us a bit again, being extremely conflicted in whether he’s hiking, cutting. I don’t think he knows what he’s doing, but what we can assess is the US labor market is not strong, and he seems to be ignoring that, and he’s looking at that lagging CPI data. So, we’ll see where we go in 2025, but as a bet, I’m willing to bet that he is doing significant cuts by March.
So, right now, just because gold is down, it certainly doesn’t mean by a long stretch that it’s out. Gold is likely to have another good year in 2025, but we’ll assess this on a week-by-week basis in 2025. For now, our T cross long at 2,634. We want to get above that before we start buying because we could see a corrective move lower again. But our MA diff cross is saying we are potentially going higher. My concern is the predicted RSI at 38.1. It’s suggesting there’s downward momentum here, so that momentum could continue into year-end, but into the first few weeks of January, we want to reassess this.
Light Sweet Crude Oil
Now, Light Sweet Crude Oil, once again, Light Sweet Crude Oil on the month is up 4.11%. But as you can see, using again the proper anchor points, guys, the current yearly open price 71.78, in my respectful opinion, only it’s a sell while below that area. The indicators in VP are basically running sideways. We’ve had an MA diff cross here since December 20th. The MA diff cross is a leading indicator, not a lagging indicator, and it’s warning that there isn’t a lot of momentum here, but we are up 4.11% on the month. So again, usually when an asset class is up 4%, it’s probably getting close to its peak. So, I would watch oil very carefully for potentially a short next week, but try and get as close to 71.78 as you possibly can. But we’ve had a good strong close at 70.60. Respectfully, that’s not a bad entry point for the short trade because a number of the VP indicators do support that.
Bitcoin
Now, the one that all eyes can remain on, Bitcoin, here, guys. Bitcoin down about 2.63% on the month. That’s it, but always remember it’s down that amount after making an all-time new high, shattering through the 100,000 mark. I believe that 2025 will be another good year for Bitcoin, but likely 2026 will not. So right now, I would like to see us holding above 990,000, or even better, 100,000 at the year-end. But either way, I think February and March, Bitcoin starts to move up again, and
I would like to see it maintain 100,000 because again, that remains a psychological level for most traders. To stay above 100,000 means there’s security, and that’s our new baseline. That’s what I will personally be looking for. If that occurs, then we should be able to see probably the 125 somewhere between 125 and 150 in 2025.
Euro versus U.S. Dollar
Now, when we look at some of our main forex contracts going into year-end, the Euro is basically running pretty much flat here, very similar to last week’s presentation. We’re not seeing any real selling below 1.04 at the current time, so again, we need to get above that T cross long, but I don’t think most of your main currency pairs are going to see much action this coming week. So again, we’re holding below the yearly opening price, but here’s the deal, guys. On January 1, we get a new yearly opening price, that’s setting the bar very, very low, at probably around the 1.04 area. So, in order for the Euro to remain bearish in 2025, this is a pre-warning for 2025 because again, this is an outlook, guys, not a recap of something that’s already happened. That doesn’t help anybody. We need to look forward and say, okay, what should we look for in 2025? What we should look for is where the Euro opens at the beginning of the year and can it stay above it or below it. I believe initially the Euro will struggle probably into that February, March area, but then it rises after that dollar strength.
So, for now, all the indicators are still warning us that there’s some upside left. The MA diff cross, the neural index strength, but we have no momentum. So, if you’re buying this, we need to get above 1.0460. 1.0460 is very likely to contain the Euro next week.
U.S. Dollar versus Swiss Franc
When we look at the US-Swiss Franc, very similar trade. It’s a US Dollar Index trade here, guys, and as you can see, we still have not cleared any new highs going all the way back to December 19th. So, the indicators here, the MA diff cross, is warning that there is very little momentum up here, so be careful if you are buying it. Yes, it’s bullish on the year, but once again, that new yearly opening price on January 1 is going to reset all markets, and that’s why it’s so important to use the correct anchor point. I don’t care in January what happened in October, November, or December. I’m starting a fresh year. It’s an easy way for the average trader to gauge the real trend. If it’s above the yearly opening, it’s bullish; below it, it’s bearish. Remember that, guys, it’s very, very important in the first two quarters of the new calendar year.
British Pound versus U.S. Dollar
British Pound-US Dollar, we’re seeing very similar, but it’s turned bearish on the year, 1.2732. But once again, depending where we land on Thursday and Friday of this coming week, we will get that new yearly opening price, and there are bullish signs here. The MA diff cross, the neural index looks very similar to the Euro. So, in short, of the three currency pairs we’ve looked at so far in this presentation, it’s actually pointing towards dollar weakness. I think we would agree based on the indicators. So once again, be very cautious with this, but the T-R cross long, 1.2620, and the yearly opening price, 1.2732, keep a very close eye on those until we end 2024.
U.S. Dollar versus Japanese Yen
Now, with the Dollar-Yen, the hope to keep the drive to keep the carry trade alive is there again with, again, a very confused Fed, extremely confused Fed. So when we look at this, the high, 157.93, if the market believes that the Fed will not cut much, like twice in 2025, and that’s it, that would favor the dollar here. The question is, how is the Bank of Japan going to respond, and that’s what you’ve got to be careful of. I believe the Fed has it dead wrong, and he will be cutting significantly in 2025, and the Bank of Japan will likely leverage that and start hiking. So right now, that’s the area we’ve got to watch. The indicators in VP are, the Dollar-Yen has been overbought for, I would argue, months. But the carry trade reigns supreme. That’s what it’s going to come down to. So keep an eye on that area up there at 157.93. If we break it and stay above it, then the likelihood is that again, it’s going to go higher. But I will remind everybody on each one of these pairs that I touch base on, if we do close above 157, 158, that’s a very difficult, it’s going to be very difficult for this forex pair to maintain this level, and I believe in 2025, it could be a very good year for shorting this particular pair.
U.S. Dollar versus Canadian Dollar
Now, the US-Canadian pair, once again, all hell is breaking loose in Canada. We lost another Finance Minister, so again, an election is now imminent right out of the gate. The Canadian dollar is likely going to take a hit on this volatility with the upcoming potential. The likelihood of a Canadian election in the first quarter right now stands at about 98%. So if that’s the case, the US-Canadian dollar is going to be affected by that volatility. But ultimately, I also believe that this will be a great short in 2025 once the current administration is gone. So Canada is open for business again, that should benefit the Canadian dollar, maybe stronger oil prices, commodity prices. There’s a trade there, guys, but I believe we’re a few months away from it, and initially out of the gate, the US-Canadian pair is likely to go higher unless your global investors see what I see, and that thing the tides have turned in Canada, and we’re going to get back to business here, and let’s start investing in Canada again. I think that’s entirely possible. But again, watch this high, 1.4467. We would need to maintain a level above this in order to keep buying this, and it’s very, very high risk at these levels.
Australian Dollar versus U.S. Dollar
Now, the Aussie and the Kiwi, basically the same trade here. When we look at this right now, you can see that the Aussie and the Kiwi are essentially—I’ll just right-click on that and apply this to the entire portfolio—so we get our T cross long, they’re both below our T cross long by about the same distance here. They both have a verified support low. The Aussie is coming in at or about 63.20, or excuse me, it’s a little bit lower than that, 61.99.
New Zealand Dollar versus U.S. Dollar
So this is a big area for the Kiwi. The indicators from VP are very mixed here, and the same applies to the New Zealand Dollar. So the Aussie and the New Zealand, the New Zealand support is at the low here. That’s coming in at 56.08. I believe there is a long trade here because again, both of these two currencies are grossly undervalued. So in 2025, there’s going to be a lot of opportunity, and I look forward to doing next week’s presentation because we’ll be starting with proper anchor points, a new calendar, a new monthly opening price, a new yearly opening price, and new quarterly opening price. And the quarterly opening price is very, very important also because that we can tie directly to seasonal patterns.
So, have a happy New Year, everyone, and once again, this is the VantagePoint AI Market Outlook for the week of December 30, 2024.
