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 VantagePoint AI Market Outlook for the week of January 6, 2025.
U.S. Dollar Index
Now, to get started this week, we’ll begin where we always do with that very important US Dollar Index. Now, when we look at the Dollar Index going into 2025, we want to make sure we’ve got our correct anchor points in our trading—the current yearly and monthly opening price. Now, that level is coming in at about 108.52. There might be some slight variances between the different brokers, but 108.52—the dollar remains bullish while above that particular level. The indicators here are pretty much sideways on the Dollar Index, but again, we’re holding above the current yearly opening price, and as long as that remains in place, then that would see further weakness in the pound, the euro, some of these things, but our TR cross long, that is coming in currently at 107.83. That is an additional support for buying dollars. Now, again, if we can’t hold these two levels, then we will see the dollar reverse. We do have a pretty volatile week coming back for really the first full week back. We’ve got the FOMC minutes, but more importantly, we have the non-farm payroll number, which I don’t believe is going to help the dollar. I believe the Fed has got this dead wrong and now he’s saying he’s only going to cut twice in 2025. I don’t believe that that’s what will happen. I believe he’ll be cutting pretty heavily this coming year.
Gold
Now, when we do a comparative on that to Gold, we can see that gold is currently up 9.6% on the week. Now, a quick reference point on the dollar, up 4.3% on the week, so gold is keeping pace here with the dollar. Now, our T cross long and our new current yearly opening price Tross long 2633, but the yearly opening price at 2607, that is the key level to keep an eye on. As long as we hold above this, then gold will also remain bullish, but the indicators in gold are looking better than the Dollar Index in my respectful opinion only. We can see that we have a short, medium, and a long-term crossover; we’re just lacking momentum, but that’s perfectly normal for the first week back. But again, we want to make sure we’re holding above the current yearly opening price, and we’re not coiling anything from 2024. We don’t want to use a random 5 days or a random 30 days because again, it causes distortion, and one week they’re saying it’s bullish, the next week they’re saying it’s bearish. If we lock our price to that current yearly and monthly opening price, we can avoid that type of confusion.
S&P 500 Index
Now, when we look at, speaking of confusion, when we look at that with the equity markets, once again, they’re not down on the week here, guys. They’re actually closing out the week up 5.8% on the S&P 500 and on the SPYs. So, once again, we want to make sure if you’re trading either one of these two, the yearly opening price on the SPY that’s coming in at about 589.39, as long as we’re above that level, because we’re going to have the same monthly opening price here, then next week we’ll look at the weekly opening price and see if we can hold above that. But for everything here that we’re looking at, this is actually somewhat bullish on the SPYs but more importantly, we can really see it on the S&P 500, the neural index, and the neural index strength starting to turn back up. Now, again, if we get a weaker non-farm payroll number, that will completely shift the sentiment as to what the Fed is actually going to do because to date, he’s using lagging data, the CPI, the payroll number. But again, we’ll see what the payroll number is, and I’m very curious to see what the Fed minutes say this coming week. But for the S&P 500, we still need to clear that all-important T cross long at 5961. When I do a quick comparison here and I look at the European Equity markets, now that’s where it gets interesting, guys.
DAX
The European Equity markets have a very well-defined buy signal, the pink line, the medium-term over the long-term predicted difference, a rising predicted RSI, the neural index is flat, but again, we’re basically dead flat on the year with the DAX, but that yearly opening price, 19923, so we’ve closed a little bit below that, but again, that MA diff cross is warning us that the European Equity markets are likely going to see some strength that would also be consistent with a falling euro. Now, again, doing a further comparative analysis where this, where intermarket analysis really gets interesting this week, is when we put in the VIX.
Volatility Index ($VIX)
The VIX has broken down below its yearly opening price, which is a classic warning sign that the other main indices are getting ready to move higher. We’re down 4.84% on the VIX; the indicators remain bear, we’re just looking for a break of the 40 level on the predicted RSI to really get that VIX selling off, and I believe that that could happen this could this first week back on the Fed minutes but subsequently on a weaker payroll number.
Bitcoin
Now, where this really gets interesting is when we look at this on Bitcoin. Bitcoin—the inverse correlation between the VIX and Bitcoin is fascinating. What the VIX is down, Bitcoin is actually up. Now, remember what I’ve talked about in previous presentations where every time Bitcoin has a year where it’s down 50% or more, you have the next three consecutive years are usually very, very strong. In 2022, we had that down year. In 2023, we’re up over 100%. In 2024, we’re up over 100%. I see more of the same occurring this year and then a down year in 2026. So, our T cross long, 96361, but in my respectful opinion, even that price is a bargain because we can see that these VP indicators are turning very bullish. Now, that doesn’t mean it’s just going to go straight up here, guys. It’s going to be a choppy, volatile week, but it does look very good is what I will say for another move over 100,000 in 2025, but this time I think we’re going to stay above that, and 100,000 will likely be our baseline. We just need to clear it, make a clean break of it, get up into the 110, 120 area, and I think it’s fairly smooth sailing from there.
Light Sweet Crude Oil
Now, another surprise when we look at it from a seasonal standpoint, excuse me, is Light Sweet Crude Oil, another big winner on the week, up 2.88%. Now, looking at these VP indicators, it’s telling me that well, we may be able to extend much higher here towards the 78 area. So, again, everything looks pretty good. The current yearly opening price is going to come in at about 71.85. Uh, I believe is what we’re looking at here, let me just double-check that yearly opening price, the opening on there, uh, is coming in at yes, 71.85, so that’s the key level, as long as we’re holding above 71.85, then we can extend higher. Now, again, here, guys, we don’t want to just pick a random five days, Wednesday to Wednesday, Thursday to Thursday, and the last thing we want to do is take a random 30 days and put us back into 2024. Uh, that type of price distortion causes nothing but problems here, and again, it causes confusion to the trader, where one week they think it’s bullish, then they think it’s bearish because they keep moving their anchor points. Keep a solid, hard anchor point, the current monthly and yearly opening price, and keep an eye on, uh, next week on the weekly opening price, but I believe oil can extend higher.
Euro versus U.S. Dollar
Now, when we look at some of our main forex pairs here, it’s all about the dollar, guys. So if the dollar tanks, then we could see some problems, but the main thing is, know your levels, know your anchor points. Our T cross long on the Euro, 104.13, our new yearly opening price is 103.57, that’s where I feel most of the battle lines are going to be drawn here. That’s where the bulls and the bears are really going to be fighting it out, so if we break through that level, just remember the T cross long, our main pivot area between bullish and bearish. Right now, it’s bearish, but there is a little bit sign, a sign of life here, but if we see a big move up on the Euro on Monday, it’s very likely we’re going to move lower on Tuesday until we get the Fed minutes, and more importantly, until we get that payroll number on Friday, because again, the ADP has been modified because of COVID. Be very careful about trading off that ADP report; the payroll number is what we’re looking for, and I suspect it will be weaker.
U.S. Dollar versus Swiss Franc
Now, the US Swiss Franc again, it’s still a dollar long or dollar short here, so when we look at this, my job here today is to show you guys where your anchor points are. So for now, this particular pair remains bullish while above 90.63, so if you don’t believe that the dollar, like me, that the dollar has limited upside here, then one of the ways you can play that is put sell limit orders just below 90.63, and soon as it moves below that area, we would be looking for an immediate retracement to 89.86, or T cross long, and then if we lose that level, we would look to add shorts to that particular trade. Now, on the long side, if you believe it is going to go higher, then again, 90.63 or as close to that level as you can, is where you would look to buy. When we look at the VP predicted high and predicted low for Monday, that’s coming in at 90.43, so if we don’t get to 90.43, guys, my job here again is to explain why we won’t get, we can’t get to it because it has to cross over the current calendar yearly opening price, which is a very, very powerful level.
British Pound versus U.S. Dollar
When we look at the Pound Dollar going into next week, again, very similar trade to the euro. We’ve had a big push down to begin the month, but then we kind of flattened out, so what we talked about here and in the V Point live trading room is, at the close of Monday’s trade, look at the high and low of the Monday bar and say, and then that bar can give guidance for the remainder of the week. If you break down below the low of that bar, it’s a sell; you break above the high, you potentially have a long. So, but for now, the indicators, uh, there’s a little showing a little bit of strength here, but not a lot, and once again on the Pound Dollar, our Tross long, 125.63, and our yearly opening price, 125.13. Now, if you believe that this is going to go higher, once again, you can put your buy limit orders just over the yearly opening price, and soon as it passes by, you pick up a long. But again, we don’t want to move these anchor points to random 5 days, random 30, 90 days; we stick with the current monthly open, particularly in January and February; that year, current yearly opening price is the single most important non-indicator you should be looking at. So again, still a little bit of a bias to the downside on the pound while we hold below our T cross long and our current yearly opening price.
U.S. Dollar versus Japanese Yen
Now, the Dollar Yen going into 2025, this should be very interesting because this is all about the carry trade, guys. Can this carry trade remain in place? In my respectful opinion only, no. I believe the Fed’s got it dead wrong, and I believe the Bank of Japan will capitalize on that, and when the Fed is forced into more cuts, the Bank of Japan could start hiking just to simply get some pressure off their currency. So, right now, the level that you want to watch going into the first, into the entire month of January, is, can we hold above or below 157.28? If we’re holding below it, it’s a short; if we’re holding above it, it’s a long, but it’s a very dangerous long because if the market realizes the Fed is wrong yet again on hiking and cutting, then they’re going to bail out of this carry trade, and you could see this pair plummet very, very quickly if they start exiting these trades. On the VP side, they’re warning us right now, the MA diff cross, if that pink line goes over the zero line, that means we have a medium-term crossover has occurred. So again, we’ve got a falling predicted RSI, but uh, it could go either way on this one, excuse me. We will have to monitor it, but the best thing I can give you to begin the year is that yearly opening price at 157.28.
U.S. Dollar versus Canadian Dollar
Now, with our main equity-based currencies, starting with US CAD, now the Canadian dollar is likely to heat up; an election is inevitable at this particular time, a no-confidence vote on the current prime minister. So there’s going to be some volatility, but my prediction for 2025 is the Canadian dollar improves once this current administration is gone, and investment starts coming back into Canada, the carbon taxes are lifted; you could really see the Canadian dollar outperform the market in 2025. But again, we’ve got to see if the no-confidence vote comes in, are we going to have an election soon, will the Canadian dollar take a hit during this volatile period between the change of administrations? Yes, I believe so, but you can see how the US Dollar benefited from the change in administration, and I believe the same thing can happen in Canada. So we’ll monitor this very, very closely. I’ll update everybody each week on that very powerful fundamental of the potential Canadian election, early Canadian election with the non-confidence vote, but I believe there will be a very, very good short on this pair. But for now, our current yearly opening price, 132.50, and our T cross long at 141.80, so I don’t want to fight the trend; the trend is clearly up, but remember, it’s up as only as long as we hold above a certain level, and if we can’t hold above that current yearly opening price, which is now 143.8, then that trend could shift very, very quickly to the downside because I believe, uh, from an international standpoint, that they will view Canada open for business again once Trudeau is gone. So again, we’ll keep an eye on it, and I’ll update you guys weekly.
Australian Dollar versus U.S. Dollar
Now, the Aussie and the Kiwi also could be a very strong turnaround trade here. Remember, we’re starting a new year. Yes, the Aussie and the kiwi and the Canadian dollar had a horrible year, but now we’re in 2025, and the winds of change, I believe, are coming. So, the yearly opening price here is 110.44 on Aussie New Zealand. I would keep a very close eye on this pair because it will dictate which pair will be stronger, Aussie US or New Zealand US, and that’s why I wanted to go to this one first. So when we come backwards and look at the Aussie, you can see right now that the Aussie, the current yearly opening price is coming in at 61.89. If we can hold above that level, then we have a very, very good long trade in 2025 for the Aussie because I believe this sets the bar very, very low for additional Aussie weakness. So it’s going to be a choppy month in January, but again, as long as we know where that key level is, and we can play off of that, so we’re holding above that for now.
New Zealand Dollar versus U.S. Dollar
And when we look at the Kiwi, well, the Kiwi is struggling a little bit, and that’s because of that strength in the Aussie New Zealand pair. Now, I believe both of these pairs will see some very, very good long opportunities in 2025. We just have to start into trading; we’ve got to see what the Fed minutes are saying, and more importantly, we need to see those non-farm payroll numbers on Friday, and those fundamentals will help set the pace to begin the first quarter. So, with that said, this is the Vantage Point AI Market Outlook for the week of January the 6, 2025.
