Welcome to the Artificial Intelligence Outlook for Forex trading.
Hello everyone and welcome back. My name is Greg Firman, and this is the VantagePoint AI Market Outlook for the week of September the 20th, 2021.
Now to begin this week, our indicators we’re using in this week’s presentation, I’ll just highlight this so everybody can see this. We’re looking at the 52 week look back that’s been modified to 37 weeks to keep it within the calendar year 2021. We’re using bars not candles. We’re using our predicted short, medium and long-term differences, along with our neural index. Point in time will be used for the weekly opening price, the predicted high, the predicted low, and of course the very important verified support and resistance zones. Now, and of course, DMA diff cross, one of the most powerful indicators in the vantage point software.
U.S. Dollar Index
Let’s get started here. The dollar again, having a pretty good week, but what we’re looking at is the major event risk for next week would of course be the FOMC. The market in my respectful opinion only is getting way ahead of itself again, with this fed. They’re thinking the fed is going to announce all these tapering measures. He’s going to be ultra hawkish. This is just not that kind of fed here guys.
In my view, as we move into these verified resistance zones, represents a selling opportunity because in most cases with the fed, they’re buying the rumor and they’re selling the fact. I would look for a dollar sell off as we approach this verified high, if we can even get that high, towards the 90, 93, 72 by probably Thursday of next week. There’ll be dollar demand buying up until about Wednesday.
Then you’re going to have some profit taking ahead of that announcement. Then regardless what the fed states, it’s more likely than not the dollar sells off after that. Because this is the pattern we see around the middle of the month with a dollar.
Now, the key vantage point levels that you’re going to be wanting to watch, the T cross long is again at $92.69. When we look at the closing price from Friday, we want to apply that to Monday’s trading so that closing price is $93.19. That will be your weekly opening price. We must stay above that level for the dollar to remain bullish.
Now, our medium term crossing our long-term predicted difference was absolutely spot on on this reversal. Now that was back on September the third, which I already outlined in last week’s presentation and in the week before that. This is what we would anticipate.
Now the predicted short air or the predicted medium difference is closing in on the long. We’re above the zero line, but we want that pink line separating again from the blue line if the dollar is going to extend gains. Already, it’s very suspicious that the software is picking up on actually weakness, not strength in the medium term. Again, I would be looking for that sell off in the dollar probably on Thursday, either way of this coming week.
Now our 52 week high that’s been modified to again 37 weeks, that high is coming in at $93.72. The 37 week low is $89.20. These are key levels.
When we click on our F8 in our vantage point software, we can see there’s that two day rule closing above that blue line. Then the third day it uses it as a springboard to extend higher. But again, we have some very, very stiff resistance between $92.62 and $93.72, which in my respectful opinion is likely to hold.
S&P 500 Index
Now, as we look at the corresponding markets with that dollar strength this week, that’s really put a push on the equities. But once again, only in my respectful opinion, this is more a case of buy the rumor and sell the fact. What I mean by that specifically is that the market gets itself all worked up about what the fed is going to do, but the fed constantly disappoints us. Again, I think the verified support low we have in the vantage point software is identified at $43.69. But this is a very significant support zone here at the low of $43.35. Again, only in my respectful opinion, I believe that this is going to turn back to the upside either just before the fed or just after the fed.
Our medium term has crossed our long-term predicted difference, but we are below the zero line. Now you’ll notice any time the predicted differences have moved below the zero line that has triggered a significant rally back to the upside. I would look for that potential rally towards the end of next week, because again, we’re also in that seasonality.
Seasonalities are very important to study because we know that in most cases, the S&P 500 doesn’t do very well in the month of September. We’re dealing with that seasonality, but once that is complete, we should see equities moving higher. Again, watch these two support levels between $43.35 and of course the $43.69, which I believe will likely be a premium buy zone.
Now, as we look at gold, gold obviously getting hit. This is again, profit taking ahead of the fed. Whenever the fed speaks gold traders get very, gold long traders usually get very nervous. I still think that gold has the opportunity to recover towards the end of the week, once we get past the event risk of the fed. The further we move away from the T cross long at $17.81, the more likely it is we’re going to retrace to it.
Now, if we look at the closing price of Friday, the closing price, $17.53, that’s going to be your weekly opening price for next week and you want to that level very, very closely, because if we can get back up above it and stay above it, gold is likely going to recover. Because again, I don’t think you’re going to get the hawkish rhetoric that you want from this particular fed at this particular meeting.
Now, when we’re talking about that retracement, we’re going to be looking for the indicators in the VantagePoint software at the medium term, crossing the long-term predicted difference. Our 37 week high and low is $19.57 on the upside, $16.77 on the downside. I absolutely anticipate that that level will hold. Your order flow traders are going to monitor the extreme points in the market for longs and shorts. They’re going to be looking to pick up longs closer to the verified zone low at $16.93, and again, or just below that, where they’ll set up a bear trap.
Be careful around that area. If we do get a bit of a hawkish statement under the fed, we could actually see this extend down into that level. But I believe to finish the week, once again, as I had discussed in last week’s weekly outlook, Thursday is not a good trading day, guys. Just try and avoid it because you can see that the bulk of gold’s losses came again on the Thursday. This is position profit taking, position adjustments ahead of a known event risk, which is the fed, one of the biggest event risks in the market.
Those gold traders are backing off their positions a bit, but I suspect that they’re also looking to get back into those positions on the long side. Keep an eye out for that.
When we look at our F8, our predicted moving average by itself, that is $17.76. Once we can retake that level, gold should be able to extend higher depending on the fed.
Now, when we look at light sweet crude oil, oil getting a big push again from that OPEC statement. But once again, after the OPEC statement, oil is again done next to nothing. I think that’s a very bold call from OPEC to say that global demand for oil is going to increase in 2022 when we don’t know the outcome of this COVID virus and whether you’re going to get into wave four of this thing, if it’s going to mutate again. We don’t really know that. I’m not really in agreement with OPEC. But for now you can see that we have approached a known verified resistance, high on oil, which is coming in at, or about the $73.76 level, where basically the sellers came back out and drove it back down.
Now the predicted differences are very conflicted, but there is a very, very slight cross here, but it needs time to develop here. Our neural index is down, but if the equity markets recover, which I anticipate they will, then oil could recover also. But you want to watch closer to the T cross long at $69.75. But just remember that the bulk of these recent moves on oil have come specifically from those OPEC statements. In most cases, that’s not sustainable.
Now, with Bitcoin, I apologize. Last week I had the wrong chart out there. I appreciate you notifying me of that. Occasionally I get confused just like everybody else.
Now, when we look at our 52 week modified to 37 weeks, keeping it in the calendar year, our particular range here, this one is a little tricky with Bitcoin because we’ve got our, again, that 37 week high at $64,078 and our 37 week low at $28,383. But we’re smack dead in the middle of this range. This really is a make or break point for Bitcoin here this coming week or in this coming month, for that matter.
I’ve shown in the live VP room and on here before that the Bitcoin is a fairly high correlation to the S&P 500, but it also has a positive correlation to the dollar. If the dollar continues to extend its gains, that could actually help Bitcoin. But Bitcoin is affected by the S&P also.
When we look at our T cross long $47,427, remember back when Bitcoin was trading all the way back at 2000 and your Warren Buffets and some of these people said, “Oh, Bitcoin’s a scam. It’s never going any further.” I’m already forecasting Bitcoin to $80,000 next year. I completely and utterly disagree with their position. Gold is asserting its, or excuse me, Bitcoin is asserting itself as a actually ahead of gold, in my respectful opinion. The gains I’ve shown on here over the last 10 years, annualized returns, there’s been blogs, and excellent blog or article in the VantagePoint blog on the development of Bitcoin versus gold versus via currencies and versus equities. Bitcoin is at the top of that class and it remains there.
Again, buying on dips is definitely recommended here. We’ve got good support down here at the low at $43,598, but we must get above this T cross long at $47,367. Now you’ll notice the date. Bitcoin versus the US dollar is trading over the course of the weekend on the CFD side. Again, I think that it should be allowed to trade it. They shouldn’t have been closing it in Coinbase being allowed.
Right now, when we look at this, an excellent signal, yet again, this week from VantagePoint with the medium term crossing the long-term predicted difference with the neural index. That led to a significant rally off the verified support low, which was pre-identified on August the 19th at $44,000, strong buying in this $44,000. We continue to buy there as long as that level holds.
Euro versus U.S. Dollar
Now, as we look at our main Forex pairs, once again, you can see that the euro took the bulk of its losses on Thursday. Again, you’ve got the market speculating that the fed is going to come back in and save the day, save the dollar. I don’t believe he will here guys.
When we look at that 37 week look back, our low here is coming in at $116.64. I could see a slight break below that, and then a full-on rally in the euro. We know on that seasonality on the dollar, it doesn’t do well from in November and December. The euro probably has a little bit more downside, but I would definitely be looking for a potential long here.
The way we would identify that is if Bitcoin softens a little bit, the equities start to move back up, oil starts to move back up. But the main one you want to always watch is gold. Gold turns around, the euro turns around.
Right now our T cross long, $117.86. The further we move away from this T cross long guys, the more likely it is we’re going to retrace to it. Keep an eye on that and keep an eye on your overall yearly range. Very important.
When we get into the bottom of this yearly range, you’re going to have order flows that’ll be coming out of, order flow traders, excuse me, that will be coming out of the woodwork to pick up longs on this thing.
U.S. Dollar versus Swiss Franc
Now the same thing would apply for US. Swiss franc is making a bold move back up, but once again, we can see that on the year it’s had a bit of a mixed bag, but in most cases, if we use a median grid like this to identify the yearly high and yearly low, then the theory is when you get into these upper quadrants, it represents a potential short trade here, the opposite of what the market. The market is only trending 20% of the time. The probability of a significant reversal on this payer on euro US, on pound dollar, on a number of these Forex pairs, is very high. That 37 week high is $94.72.
We appear to be on our way to that. We will likely reach that target by the middle to the end of the week. But then on Thursday, again, watch for that profit taking or position adjustments, or simply, I hate to use that cliche, but the market buys the rumor and then once they get the fact, they usually sell it. Be aware that there could be a short here. Keep an eye on your predicted differences. But once again, our T cross long at $92.33, the further we move away from this, the more likely it is we’re going to retrace to it.
Now to get close to that price, we would click on our F8 and we would monitor this predicted moving average at $92.46. Once again, the further we move away from this, the more likely it is we’re going to retrace to it.
British Pound versus U.S. Dollar
Same would apply to the pound dollar this week. The pound did hold its ground at the beginning of the week, but you can see on Thursday, it was just too much for it. But once again, when we look at last week’s trading, it just could not close above that weekly opening price. But remember, the weekly opening price now is going to shift to Friday’s close. That’s $137.19. If we’re holding above $137.19 this coming week, then that would point to a reversal on the pound. But again, we’re slipping into the lower end of the yearly range here.
Again, I would like to see the pound dollar get back up above the $1.38 level here by the end of the week if it has any chance of getting back onto it’s yearly cycle.
$136.45 is the yearly opening price. That’s again, another very strong level of support down here. $136.02 also. Keep your eye out by the end of the week for potential long trades.
U.S. Dollar versus Japanese Yen
Now, as we look at the US Japan pair, once again, US Japan continues to move back and forth inside of its overall range, but you can see that it’s holding a very bullish tone here.
Now, if I backed my charts out here to about nine months, you can see that we’re channeling here so something is brewing on this particular bear. I would argue it would be to the downside. We’ve got our high at $111.66. I would watch that area for a potential short, but the immediate risk here is again the fed, but we’ve got to monitor this resistance. We need to break through this particular resistance before we even have a shot at getting up towards that $111.51, $111.60 area. That resistance high is coming in at $110.45.
If we can break through that, which I suspect we will catch that by Wednesday, but Thursday will be likely a very different story. Once again, we’re hovering here. We’ve closed the week positive, but the T cross long sitting there at $109.79, as you can see, so we’ve got to break free and clear of that.
If we click on our F8, we’ve closed above our predicted moving average, that level $109.83. It still looks good. Our predicted differences are starting to rise. Our neural indexes turned positive, but longs are always risky when you’re near a yearly top here. Keep that in mind that if we lose this lower end at $108.72, that would open the door to a much deeper corrective move.
U.S. Dollar versus Canadian Dollar
Now with the US Canadian pair, this pair is going to be very, very volatile this week. Canada has, we have an election on Monday. There’s likely going to be a change in government. I think that Trudeau is really shot himself in the foot yet again by even calling an election in a pandemic that costs taxpayers $610 million. Again, very costly election that’s coming in this week, but again, it’s a dead heat race.
The international investors are watching this election very, very closely to see if he’s going to remain in power, or if there’s going to be a change in government. Is there going to be a minority government, a majority government? It’s going to likely be a minority government. I’m going to make the call on that, that probably 85% probability of that. I’m just not sure which one.
Again, we’ll be monitoring this very closely, but right now, US Canada, again, the market is getting nervous with the falling equity markets, falling oil prices, a stronger dollar, and on top of all that, a Canadian election.
Again, we’re going to watch that T cross long very closely. $126.49 is our major support. If we click on our F8 in our software, that long predicted $126.88, and again, we have a medium term crossing the medium term dip crossing the long dip, the pink line over the blue line. But not with the neural index.
I believe guys, there is a short trade coming here because I believe equities and oil will turn around. I believe there’s a strong possibility that even gold, as ugly as it may look right now, is likely going to turn back up before the year end.
Right now our immediate two resistance points are of course, $127.61, where we stalled out on Friday, and then the additional resistance high, we have at $129.48. It’s entirely possible we could hit that.
Now that $129.48 also represents the 37 week high, the yearly high. The yearly low price is coming in all the way down at $120. In most cases, the further we move away from either yearly high or the yearly low, it basically reeks of a retracement here, guys.
Watch for the potential for shorts, but again, that medium term crossing the long-term predicted difference, very, very often is the leading indicator to warn us that this is a false move. We are already getting that warning that longs are very, very risky up here.
Australian Dollar versus U.S. Dollar
With the Aussie and the Kiwi this coming week, they are absolutely going to follow equity markets. If equity markets can turn around, both of these will. But once again, we are setting a new low on the Aussie on a regular basis here guys. When we look at this right now, and we go back over a nine month period, this chart really doesn’t look very good, does it? That low point coming in at the 71 level, we’re likely going to try and test that by potentially the end of the week. But any recovery in stocks will lead to a recovery in the Aussie.
New Zealand Dollar versus U.S. Dollar
The same thing you will see with the New Zealand currency. If the equities turn around, then the New Zealand is likely to turn around. But this is a very ominous signal here. The reason I say that is because again, if I just take a line and put it on my VantagePoint software and guesstimate the difference between the high and the low and put a third line rate down the middle, and that’s a median grid, and this has nothing to do with Fibonacci or waves or any of that stuff. It’s simply again, the halfway point between bullish and bearish.
When we look at even the stronger of the two, which is New Zealand, on that particular grid, we can see that it’s really struggled with this particular level. Once again, we’re challenging it back to the downside, but any sudden turnaround in commodities, and more specifically commodity futures like the S&P 500, will cause a very sharp reversal. But for now the predicted differences are pointing down. Our neural index is down. We have closed below the T cross long, but that now becomes a major level for us, $70.59.
When we click on the F8, there’s our two day rule that’s been met, two days closing below the blue line in 80% of the time, guys. That’s about the accuracy of the software. 80% of the time the third day is a bigger move. That suggests that we could make a big push to the downside on both the Aussie and the New Zealand to start the week.
But even these two could be a place of value on Thursday after we get done with the event risk of the fed. A very choppy week ahead, but also some very good opportunity if you know your levels. With that said, this is the VantagePoint AI Market Outlook for the week of September the 20th, 2021.