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 January 13th, 2025.
US Dollar Index
Now, to get started this week, we’ll begin where we always do, with that very important US Dollar Index. Now, looking at our proper anchor points here for the beginning of the month, the beginning of the year, the beginning of the quarter, we can see the dollar is up about 1% on the month; it’s had a big move after the payroll number. Now, in most cases, by Tuesday, Wednesday after the non-farm payroll number, the dollar’s under pressure again. The unemployment rate went down in the US; however, there were downward revisions for the previous months. There was also 33,000 government jobs created, so that actually brings that number back down to near consensus around 150. So, I think the market will revisit that payroll number and look a little bit closer. There were positives and negatives in that report, but again, in my respectful opinion, it was nowhere near as strong as what they’re suggesting. So, when the market reevaluates this, we could see the dollar start to stall out here. The indicators are still bullish; however, we have a verified resistance high coming in at 109.53. Again, in my respectful opinion, it’s very likely the one just above the 110 area will likely contain the dollar for the month of January, but again, the indicators remain bullish for now. What I expect is a big move on the dollar on Monday, and then we look at the use the Monday daily bar, the high and low of that daily bar, to assess if the dollar can break out higher or if it’s going to stall just below 110.
Gold
Now, on a comparative note with gold, and again, this, gold is doing very well in the month, far better than the dollar actually. We’re up 2.88%. Now, what we want to make sure we’re not doing is using a random 5 days or random 30 days as our anchor points. I talk about this on a weekly basis to drive this point home, guys. We don’t want to co-mingle anything from 2024 into 2025. We want to start fresh, so gold is coming out very strong so far at 2.88%, almost double the appreciation of the US dollar. And regardless of how the market interprets that labor report, ultimately, gold is the one that is likely to go higher in 2025. The indicators right now remain quite bullish for gold, but we do have some very stiff resistance up near the high 2723. We would have to break free and clear of that area for gold to extend. Very likely, we’re going to get a pullback, but our T cross long, that area is coming in at 2646, and again, that very important yearly opening price, 2607. Long while above that particular area.
S&P 500 Index
Now, if we do a comparative analysis between the S&P 500 and the SPYs, we can see that they’re both down 1.6% on the month, on the year, and the start of the quarter. Very important that we’re not moving that anchor point around; we need to know exactly where we are. Now, in most cases, again, the equities recover after that strong payroll number. I believe the FED will be cutting multiple times in 2025, and the data will catch up. You also have to remember with that payroll number, there’s a seasonal component in the month of December. So again, I think, and not only that, the payroll number is a lagging number; it’s not for January, guys, it’s for December. So, I believe that number will dramatically change in the month of January, so we’ll reassess that at the time, but for now, the equities remain somewhat soft while below the current calendar yearly opening price. That’s 5903, the TR cross long 5939. You can see the market got all tangled up in this previous week, but we have to hold below that 59,903 level in order to remain bearish, and I believe ultimately the equity markets, the NASDAQ, the S&P 500, and the Dow will outperform the dollar in 2025.
Now, again, when we look at the SPYs, same thing here, guys, we’re breaking down, but we don’t want to move our anchor points off of here to back into 2024, because that’s how most people create false signals. They’re looking back here and saying, ‘Well, it’s in a big downtrend.’ Well, yes and no. We’ve got to look at it from the current calendar year. Usually, in the first quarter, all markets will fight it out around the current yearly opening price to determine if something’s truly bullish or bearish. So we’ll keep an eye on that, but for now, there’s a slight bearish tone, but I do expect stocks to recover as early as Wednesday, but one of the rationale behind that, of course, is the VIX.
Volatility Index ($VIX)
The VIX is now up, and again, we don’t want to go back here into 2024 or just pick random dates. How we’re measuring performance, we measure it at the start of the year and the start of the month. The VIX is up 8.61%. It is very unlikely that that is going to continue higher once the market looks closer at that payroll number and says, ‘Whoa, wait a minute, that was the month of December.’ The downward revisions again, you’ve got that seasonal component in there with seasonal jobs that won’t be there potentially in January, so I believe the VIX is overvalued here, but we will watch the verified resistance high very closely, 18.85, to see if we can maintain momentum above that. I’m not opposed to buying the VIX or selling stocks, but I need confirmation, and I very seldomly get that in the first week of the new trading year. So be careful around this area, but the indicators do still look, I will concede, do look bullish on the VIX, but a lot of that is responding to their interpretation of that labor report and what the FED is going to do, so we’ll take that one with a grain of salt at this particular time.
Now, when we look at the European Equity markets, that in most cases have a very high correlation to the US Stock markets, they’re up 1.51%. We had that Buy Signal here from the previous week, but once again, we stay long while above that current yearly opening price on the TR cross long, 19,943, 19,943. Those are our key supports on the downside. The indicators are definitely a little bit mixed for Monday, but by Tuesday, I suspect Tuesday, Wednesday, the global equity markets are likely to turn around when they come to the conclusion that maybe the FED doesn’t have enough ammunition to start, uh, or to stay and not begin cuts. So again, a lot of this is dependent on the fundamentals of what the FED is going to do in this case, the neural index down. So the initial move down in the European Equity markets on Monday along with the US markets is likely down, but Tuesday could be a very, very different picture.
Light Sweet Crude Oil
Now, one of the star performers also to begin the year is Light Sweet Crude Oil, up 6.49%. Again, we’re coming up into some very heavy resistance around the 80 level. I believe it should start to slow down once we hit the $80 barrel. We do have an MA diff cross on the downside, so we’ll be watching this one very, very closely, but it has made a very strong move from the beginning of the year. And as you can see, in 2024, it really struggled with that yearly opening price from 2024. So our retracement point will always be the monthly opening, the quarterly opening, and more importantly, the Tross long. So when we look at the Tross long in comparison to the current yearly opening price, there’s pretty heavy support there, guys. So if you’re looking to buy, I would respectfully submit that that’s probably your best bet. Now, you can also click on the F8 in our Vantage Point software, and we can use our long predicted, and you can see that the market’s been in good contact with that the entire week. That current level for your more aggressive traders looking to go long oil would be 74.37. So keep an eye on that area also, guys.
Bitcoin
Now, one of my personal favorites is, of course, Bitcoin. I do expect another strong year in Bitcoin, with heavy buying likely again in late September and October. But I also suspect we will have a decent rally in February, March. When we do look at that from a year ago, you can see we kind of go flat in the month of January, and then Bitcoin really starts to take off. But I further can assess that this is likely the final year of a rally for Bitcoin, and then next year we get a down year. There, Bitcoin follows a very clear cycle. Whenever it’s been down in a calendar year of 50% or more, going back 10 or more years, usually we have a rally for three consecutive years. Well, that’s what we’ve had. We had the down year in 2022. We’re up 150% approximately in 2023, and we’re up about the same again in 2024. So the third year of
that is this year, and then we start to move correctly lower. And Bitcoin is not going anywhere here, guys. So for now, we could have a pretty strong buy right where it is right now. The VP indicators are starting to roll over positive despite that payroll number. So again, I do anticipate that Bitcoin will easily retake the 100,000 mark by the end of the month.
Euro versus U.S. Dollar
Now, when we go into some of our main Forex pairs here, the key one that all eyes are on is EUR/USD. So what I can tell you, guys, is you want to keep a very, I expect Monday trading in the Forex, Commodities, and Equity markets to be very choppy on Monday. But at the end of the day, just take a look and see where you are at the end of the day with the high and the low, and that Monday bar can actually be used for a better part of the week to see if we actually have a trending move coming. So we’re back down to where we were, and this was right off the very first trading day of the calendar year, a verified support low formed at 1.0224. That’s the area to watch. I believe they’re going to run that area on Monday, and then Tuesday, Wednesday, we could see the Euro recover. But again, as long as you know your levels here, guys, that’s the most important things. Yes, the indicators are all bearish, but be careful of a bear trap.
U.S. Dollar versus Swiss Franc
Now, the US Swiss rank also spiking higher, but again, it’s in the interpretation that that was a solid labor report when, in actual fact, when you lift the hood, it really wasn’t; it was just okay. And again, there were good components of it, but there were a lot of negatives in there too that don’t require the FED to pause. I believe he’s going to cut at least four times. That’s just in my respectful opinion. We shall see, but for now, we know that we’re looking to see if the Tross long can move above the yearly opening price at 0.9063. I believe it will be very, very difficult, but it is likely in the month of January, and possibly the US dollar. And remember, this is the US dollar’s second quarter, not the first quarter; their first quarter begins on October 1. So, in most cases, in the US’s second quarter, the dollar does reasonable. So we could extend higher here. But once again, that verified resistance high, 0.9137, we need to stay above this level. Okay, and if we can stay above that, then maybe we can extend higher to the 0.92, 0.93 area. But that is the key. The indicators are somewhat bullish on this particular pair, but this is 100% correlated, guys, to the dollar index.
British Pound versus U.S. Dollar
Now, the British Pound, going in there, again, we’ve given up that yearly opening price in the first week of trading here. That key level there is coming in at 1.2513. Our main resistance level on this pair is 1.2477. So yes, shorts can remain in play while we’re below that area, but for the more savvy trader that’s looking at this, saying ultimately, the pound is likely to clear that yearly opening price, we can put buy limit orders just above 1.25. So when it comes back up, we pick up the long. But again, in most cases, the pound doesn’t fare that well at this particular time of year. When we look at it last year, it kind of went sideways to down right up until about April. So again, can we follow that same pattern possibly? But right now, when we look at this, the neural index is running flat, the predicted RSI is at 14.3, so if nothing else here, guys, a corrective move back to the T cross long at 1.2477, and then we reassess if we can get above the yearly opening price. But in this particular case, you can see that that T cross long has actually crossed over the current yearly opening price. That is quite bearish at this particular time.
U.S. Dollar versus Japanese Yen
Now, when we look at the Dollar Yen, going in next week, and if the market believes the carry trade is back on, then the dollar Yen should have gone screaming higher on Friday, and it didn’t; it actually finished the day down. So again, I believe that some of the institutions are looking at that labor report a little differently and saying, ‘Oh, wait a minute, that was a big chunk of that labor report was government jobs, and you had the downward revision.’ So they’re trying to decide if they want to stay long, and the carry trade is the interest rate differential between the dollar, the bank of the FED, excuse me, and the bank of Japan. Right now, we’re kind of running sideways on here. So yes, there could be a long while above this area, but again, in my respectful opinion, only the carry trade probably will come apart at the seams this year. So I would be very, very cautious with longs at this particular level. The predicted differences are running sideways, the neural index is down, and we have the predicted RSI also sloping down. So that tells me that this pair is not as strong as it appears, but if you get a big rally up on Monday, chances are it turns the other way on Tuesday. So be very careful of that Monday-Tuesday reversal.
U.S. Dollar versus Canadian Dollar
Now, with the US Canadian pair, once again, here, the uptrend remains intact here. Our T cross long for next week, that’s coming in at 1.4347. Our current yearly opening price is going to be 1.4380. I believe we will have a very, very good short trade here. Trudeau is gone, but he won’t be gone until probably April, May. There’s no, the government stalled here while the parties pick a new leader, but ultimately, I believe the Canadian dollar benefits from him leaving, and into the second and third quarter of this year, I expect the Canadian dollar to become quite strong actually, and with the support of commodities like oil, and some of these markets, will definitely help the Canadian dollar, and I also believe the Canadian economy will be open for business again. So we’ll see how this one plays out, but again, the point being, with a yearly opening price all the way up here, guys, at 143.0, that sets the bar very high to try and maintain momentum above this. Now, I think we can until we get to the election, but then after that, any move higher, I believe, will look good, will look reasonable for shorts on the change of administration. We saw the strength in the US dollar with the change there. So again, we’ll be monitoring it very closely, but just to clarify, as I’m domiciled in Canada, Trudeau is not gone yet. It’s going to be a little bit yet. So, I think that the Canadian dollar will stay under a bit of pressure until we have that election date, and he’s gone. So, I’ll monitor, or I’ll update everybody each week, but we can also see the predicted RSI bouncing off that breakout point of the 40 level and turning back up, and now we’re breaking above 60. So for now, the Canadian dollar does remain under pressure, but it does have an expiry date.
Australian Dollar versus U.S. Dollar
Now, when we look at the Aussie and the Kiwi, both of these pairs are struggling here, but a very, very high correlation to the S&P 500 and the global indices. So if the global markets, the DAX, the Dow, the NASDAQ, the S&P, CAC 40, can all recover by midweek, then chances are the Aussie and the Kiwi are going to follow that. They have a very, very high correlation. When we look at that breakdown of the yearly opening price and cross-reference it even to something like the SPYs, you can see that it’s a mirror image. The Aussie chart is a mirror image of the SPYs or the S&P 500. So that cor, if you’re armed with that knowledge of that positive correlation between the Kiwi and the Aussie to the equity markets, then as soon as you see the equity markets recovering, you potentially could have a long here. So we need to get back up above the current yearly opening price, but 61.89, this is setting the bar; it’s going to be very difficult to hold below that particular level going into the second and third and fourth quarters. I don’t even know if it will survive the first holding below this particular level. So monitor that, but the Kiwi is the same.
Now again, responding to that labor report, the predicted differences were actually long Aussie and long the Kiwi going into that labor report, and I believe that forecast to be accurate because, again, that payroll number may not be exactly what it seems, and I don’t think January is going to be a good report here. So once again, when we look at this, it’s a reaction to that labor report, and we only broke the yearly opening price on Friday. So once again, if stocks recover, then the Aussie recovers.
New Zealand Dollar versus U.S. Dollar
The same thing goes for the Kiwi here, guys. It, too, looks just like an S&P or SP spider chart. So once again, and we’ll monitor this, but if stocks start to recover, then certain currencies will recover also, potentially the Euro, the pound, but the Aussie and the Kiwi have a very, very high correlation. So monitor things very closely. I would strongly advise just letting
the market settle till at least 11 or 12 on Monday morning. Then we reassess where we’re at. We look at the high, the low of the day, and potentially we can trade the entire week off of that once we know how the market is going to digest that very important US Labor report. So with that said, this is the Vantage Point AI Market Outlook for the week of January 13th, 2020.
