Welcome to the Artificial Intelligence Outlook for Forex trading.
VIDEO TRANSCRIPT
U.S. Dollar Index
Okay, hello everyone, and welcome back! My name is Greg Firman, and this is the Vantage Point AI Market Outlook for the week of October 14, 2024.
To get started this week, we’ll begin where we always do with that very important US Dollar Index. Now, the dollar is stalling out here; it’s made a bit of a move on the CPI data that’s come out, but the PPI data that came out on Friday clearly showed little to no inflation, and the dollar is backing off. Now we have an MA diff cross, which is a very important contrarian indicator to look at in the VP software. What it’s telling us is that the medium-term trend is weakening against the longer-term trend, hence the pink line crossing over the blue line. This again is both a trending indicator and a contrarian. What this is telling us is that, at the very minimum, we’re looking at a retracement likely back to the T cross long at 101.90, and that would be consistent with this particular time of year from a seasonality standpoint and also a monthly percentage rise; the predicted RSI is 85.7, the neural index, while you can see, is still green. What’s very interesting, looking at the neural index strength, it’s actually giving a very different signal here. So, when we hit that high on October 10th, you can see that the neural index since has been dropping lower. Now, when that crosses the zero line with the MA diff cross, that should trigger the dollar weakness that we’re looking for.
Gold
So, when we do a comparative analysis to that with Gold, we can see we have the exact inverse signal forming with that same MA diff cross, but this one looks very good off of our T cross long at 2623, excuse me, very, very strong support this month down to 2580; that would be, would, and has been a buying opportunity, but for now, what we’re looking at is a good look neural index strength with a green neural index and MA diff cross, but the predicted RSI here is showing momentum; that’s what we look for in our trading, guys, not overbought, not oversold, but momentum in the market that’s building. Now, depending on how things go with the other retail sales coming out next week, uh, I think the groundwork has been laid that the FED is going to cut, and it’s debatable whether the US is in a recession or has been in a recession, hard landing, soft landing; either way, it favors Gold here, guys. So, what we’re looking at now is Gold to get moving and pushing through these verified resistance high at 2455, but the first one we’ll be looking at is 2667; that’s the one we need to get above. If we can get above 2667, then we would be looking at breaking through 2684. Excuse me, that’s where all of our verified zones are. The only time we want to buy high and sell low is when we have a signal or something that tells us to do so, and we do have one at the current time with this MA diff cross.
Bitcoin
Now, again, also looking at what some will consider to be digital gold would be Bitcoin. Now, Bitcoin again has a, in most years, and nothing is 100%, but Bitcoin is usually very strong in the month of October. A signal is building here; predicted RSI is at 61; we’re not looking for overbought or oversold conditions here, guys; we’re looking for momentum. Now, that’s a little bit concerning how that’s, uh, that’s gone horizontal, but we’re still at 61, suggesting that momentum in Bitcoin buying is building. There’s been a lot of rumors about whales in the market; not too concerned about any of that, guys. What we’re concerned with is breaking above the quarterly opening price at 63,801. Once we get, assuming we can get above that, then we would be looking to target it back up towards the 70,000 mark. I could see us getting into that area, uh, this month; very, very high probability, guys.
S&P 500 SPDR SPY ETF ($SPY)
Now, how do the stock markets all play into this? Well, let’s have a look, first at the SPYs. First of all, we need accurate; the SPYs are barely positive here, guys, on the month. When we’re looking at monthly pricing, we always look at the start of the calendar month, not drag September into October and then muddy it up with a random 30 days, a random 5 days; no, we take very specific points of performance points, the start of the month; SPYs are only up 0.61% uh, this past week, we’re actually up 1.4%, so we’re outperforming on the week than what we are on the month, so it’s looking good here, uh, we still need to extend higher, but the indicators are set up good for an extended rally, but always remember in the market we’re in right now, the dollar down, just about everything else is up, uh, now the stocks, yes, they’re a little shaky up here because we’re still trying to get confirmation if we’re in a, again, hard landing, soft landing, what are we doing here, so the market will work through this and the addition of the retail sales coming next week and the ECB, uh, these will all factor in, uh, to the stock market but to help assist with that, our T cross long, that is at, on the SPYs, is 569, so we look to buy at, at or around that particular area, and always remember, the S&P 500 and the SPY is the same trade here, guys, so you can see that the S&P is extending higher; it’s turning positive now on the month, and again, this is why we use the current monthly opening price; we can’t pick random points and say it’s bullish or bearish in October; the only place to start is at the monthly opening, and then we can make that determination, so now we’ve closed above the monthly opening price multiple days in a row; our T cross long 57,145, so as long as we’re holding above these levels, we can extend higher, and the VP indicators are confirming that that’s the way we look at this, guys, but if I move this, uh, you know, and say, okay, over the last month, what is the performance, but I move the date over to here, then I can cherry-pick a bottom and say, oh no, no, the stocks are way up, but in actual fact, they’re not, so this is where we can gauge where exactly we are in the each and every calendar month and then we can apply seasonal patterns, intermarket correlations, all of these things come together for what we hope will be a great trade.
Volatility Index ($VIX)
Now, we also want to look at the VIX; the VIX is a very important factor when it comes to this. Now, again, you can see the performance there; we’ll just delete that, but the VI, what’s concerning the stock market for me is that the VIX remains positive on the month, on the year, so if stocks are going to go higher, then the VIX needs to hold below what appears to be a slight double top here around 22.93, but I’m not a big believer in double tops and double bottoms; often times, they give way on the retail side of trade, so I’ll continue to monitor this, but the VIX, the T cross long6 2016, were still above that, so my optimism on uh, excessive uh, gains in the stock market in the month of October remains heavily guarded because I’m using the VIX to gauge, okay, do I really want to go heavy on stocks? Well, maybe not, maybe I want to lean towards Gold and Bitcoin instead, and selling US dollars, but again, uh, the main thing is we do have an MA diff cross to the downside, so if it can get moving, but as you can see, there is absolutely no downward momentum on the VIX at all, uh, so it’s very perplexing, but I just wanted to point that out to everybody.
Light Sweet Crude Oil
Now, when we look at things from the energy side, Light Sweet Crude Oil once again, it’s bouncing around all over the place here with what’s going on in the Middle East, but this is again the benefit of using the verified zones in the VP software because they’re, they’re not subjective, they’re objective, they tell us and say there’s nothing to debate here; the market failed on or on August the 12th at the specific high of 7856, you can see that on October the 10th, we retraced back to that exact area and a fantastic short, but here’s my concern, we also had a very good long trade off of the yearly opening price, which is intersecting with the T cross long, which is coming in at about, at or about 7186, so if we’re holding above 78.186, that’s where we would want to attempt longs, but in my respectful opinion, it now, natural gas is the play going into year-end, not oil, despite what’s going on in the Middle East, but to each their own, uh, right now, I would argue that the MA diff is in agreement with what I just said, the pink line over the blue line or the medium-term cross, the medium-term strength weakening against the longer-term strength, and that is precisely what we look for in our trading, is that contrarian move and not get caught on the retail side, so watch these levels, clearly I think there’s decent shorts near 7850 and there’s potential longs down around the 7186 area.
Euro versus U.S. Dollar
Now, as we look at some of our main Forex, I think most eyes are going to be on the Euro-US pair this week, and that’s with the ECB, but I also believe that that’s, that the whatever the ECB cuts rates, it’s already being worked into the price, and then the Euro rebounds potentially after that, so the Euro likely to see some pressure, but as you can see, that same MA diff cross is warning us, saying look, this trend to the downside is not as strong as what it appears, and using contrarian indicators like this will always get you in front of things instead of lagging behind the moves that are actually already in progress, so it will be up to Lagarde in the ECB, but for now, I would say that the very minimum retracement point is our T cross long at 110.26; if we can get above that, then we could see the Euro rise further, but risk-off scenario, uh, everything that’s going on in the Middle East well’ll continue to uh, see dollar buying this year, maybe a little bit different, we may have to wait till November for that dollar weakness, but it, we’ll see what the ECB does, but in most cases, regardless of what that cut is, a week, week and a half later, that currency usually strengthens, case in point, 50 basis point cut from the FED, only to see the dollar strengthen significantly afterwards, once the selling was done, the dollar weak, leading up to that, so we’ll monitor this, but look for that retracement point.
U.S. Dollar versus Swiss Franc
the US-Swiss franc, right now, again, uh, not a lot of buying up here, very high correlation to the Dollar Index, so for now, I think shorts are favored here, into the high, that high coming in at 8608, and this is not subjective, in my respectful opinion, and I wouldn’t say this unless I something in the VantagePoint software that is agreeing with my perspective on this, and that MA diff cross is saying look, we’ve got no buyers up here, and you’re losing momentum to the upside, the predicted neural index and the neural index strength, they’re both turning negative, so I think that shorts are reasonable up in this area, but again, the next verified high would be 8749, which is really not that far from where we are now, so keep an eye on those particular levels, but a breakdown below the T cross long will target the yearly opening price yet again at 8410, and you can see that there’s been multiple attempts to breach this area, and it only rebounded after that 50 basis points cut, so again, I, I think the FED will continue with his cuts, and it will not favor the dollar into year-end.
British Pound versus U.S. Dollar
Now, the Pound-Dollar, for next week, once again, if the Euro rebounds, the Pound is likely to do the same, as you can see in the Forex market, we’re either buying or selling US dollars, and there are signals across the board here suggesting the dollar is going to weaken, now nothing is 100%, but if we can get into that 80 percentile, 80%, then we have a shot at multiple positions here, across the board, shorting dollars, uh, long Gold, long Bitcoin, potentially long stocks, a lot of different plays going on here, but there is a signal, so if nothing else, I suspect we will retrace to the TR cross long this coming week at 131.69.
U.S. Dollar versus Japanese Yen
Now, the Dollar-Yen, uh, again, we see it back towards this 1.5 level, but now it’s got catching some headwinds up here, we, if we believe the FED is going to cut into 2025, the carry trade should start to come unwound here, so again, this pair is going to be very, very, very volatile over the next several, probably in the next 6 to 8 months, so for now, we can clearly see that we’ve got resistance around 150, there’s likely exotic barrier options up here, somebody protecting the 150, they don’t want it to go to 150, but if 150 breaks, then they’ll lose, they’ll cut those options, and we could see it go higher, but getting back up into the next verified zone at 155 is going to be very difficult, respecting where we’re sitting in the carry trade, so again, uh, there is a weak sell signal on the pair, but only the most experienced should go after this one, but there is your verified resistance high, 149.39, uh, so again, we’ll watch this area, but it’s going to be choppy.
U.S. Dollar versus Canadian Dollar
Now, the US-Canadian pair, uh, I believe once again, the Bank of Canada is coming up, and there’s a lot of rumors about uh, massive cuts coming from the Bank of Canada, so a lot of that is being worked in, uh, we’ve got a couple of verified resistance highs, but the main one I’ll point out is 139.46; I, in my respectful opinion, I don’t think we can get to that level, respecting the time of year we’re in, still seeing Canadian dollar weakness, but it will be difficult to get to that level of 139 yet again, but there, there’s likely we’re going to see elections coming in Canada soon, sooner rather than later, later, uh, the current PM in Canada is under significant pressure to just leave politics, all to step down, so I don’t know, uh, if he will or not, but I think that the market is smells blood in the water from the political side, the commodity side, and just the general Canadian economy, so we’ll see how this one plays out, but I think there’s going to be one heck of a short coming up here on this particular pair, and if we can get close to 139, I think it’s more than reasonable, as you can see, something is building in the VP software right now, that pink line over that blue line is saying look, the upside is limited here, the medium-term trend is weakening against the longer-term trend.
Australian Dollar versus U.S. Dollar
If we cross-reference this to the Aussie and the Kiwi, we’re likely to see something very similar, which we do right here, you can see that line crossing over here, this one of my favorite times of the month, guys, because uh, more often than not, at least 80% of the time, this signal is, is very powerful, because if we look at conventional tools, they’re saying oh no, no, this is a bear trend, well, yes and no, yes, we slip below the yearly opening price, but this is a very shallow uh, dip here, and I’m already, I would argue, 6704, keep an eye on that area, if that continues to hold, a verified zone will form off of that particular bar as early as Monday night, Monday afternoon.
New Zealand Dollar versus U.S. Dollar
The Kiwi, we’re likely to see the same thing, you can, and it actually is very pronounced, we do have a new verified zone that’s formed here, and that low is at 60.53, so in most calendar years, what I can share with you is that I prefer to sell US dollars uh, from mid-October into about mid-January, with a little bit of caution around the beginning of November and the beginning of December, and of course, the beginning of January, so with that said, this is the VantagePoint AI Market Outlook for the week of October the 14th, 2024.
