Forex and the U.S. Dollar

The U.S. Dollar Index is the backbone of forex trading. The bulk of the trades involves buying or selling the U.S. dollar. Understanding the movements of the individual market will greatly benefit forex traders as they will be able to better predict the movements of the pairs based on the IDX market movement.

Key levels and market movements:

As we approach year-end, liquidity is expected to dry up. Last week the non-farm payroll numbers came in at 8 million in November 2017, having dropped from 9 million in November 2016 so the economy seems to be moving in the right direction. GDP growth is also up in the current administration. We could see some cool-down in the dollar with FOMC announcement on Wednesday, as the fed seems to want to avoid any rally in the U.S. Dollar. Many indicators are dependent on Wednesday’s announcement as the Fed is expected to release market projections for 2018 and 2019 as well as interest rate hikes. The announcement will make for a tricky week as it is likely to dictate the direction of the equity markets, commodity markets, and currency markets for the remainder of 2017.

What do the indicators say?

The VantagePoint predictive 18-day moving average is at 93.140 and the VantagePoint PRSI is at 62.3

Forex Weekly Outlook for Major Pairs

The major pairs are where most Forex traders trade the market. In the Forex Weekly Outlook we take a look at the most popular pairs analyzing price action, news events and/or risk off scenarios that could play a role in market movement, and a series of VantagePoint charts that best present information that can assist traders in determining where the market may move in the week ahead.

Euro/U.S. Dollar (EUR/USD)

Key Levels and market movement:

Gold has moved lower, putting intense pressure on the Euro. It’s left to be seen how far down the Euro will go – but it’s still having a great year when compared to the U.S. Dollar. Keep an eye on this pair following the FOMC announcement. If the Euro wants to continue showing long-term strength, it must break above the 1.20 area and stay that way. Buying on dips is still the best play here.

What do the indicators say?

The predictive 18-day moving average is 1.1798 and the PRSI is at 33. The neural index is at a “zero” position indicating weakness over the next 48-hours.

U.S. Dollar/Swiss Franc (USD/CHF)

Key Levels and market movement:

This pair tends to follow the U.S. Dollar Index. As gold moves lower, this pair tends to move higher, which we are seeing at the moment. While the indicators in VantagePoint are still bullish, we can anticipate a potential change in direction after the announcement from the fed.

What do the indicators say?

The PRSI is at a 63.7 and the predictive 18-day moving average is at .9865. The neural index is at a “one” position indicating the potential for short-term strength over the next 48-hours.

British Pound/U.S. Dollar (GBP/USD)

Key Levels and market movement:

Non-farm payroll numbers have caused some big moves in this pair. The pair could be seen as grossly under-valued at this time. Expect some potential good opportunities to the upside in this pair as we move into 2018 as Brexit is still making waves.

What do the indicators say?

The VantagePoint predictive 18-day moving average is at 1.3354 and the PRSI is at 51.1. The neural index is at a “zero” position indicating the potential for short-term weakness over the next 48-hours.

U.S. Dollar/Japanese Yen (USD/JPY)

Key Levels and market movement:

This pair trades essentially the same as the USD/CHF pair. This pair is known as being a “range-trade” between 111 and 114. At the time, the pair is trading smack-dab in the middle of this range so use caution moving into next week. Look for the pair to make a bullish move towards 114, possible 114.50. Once there is a sustained break of 115 we are free and clear to get into long positions.

What do the indicators say?

The PRSI is at 71.9 and the predictive 18-day moving average is at 112.487. The neural index is at a “one” position indicating the potential for short-term strength over the next 48-hours.

The Commodities Currencies

U.S. Dollar/Canadian Dollar (USD/CAD)

Key Levels and market movement:

This pair has a clear identifiable “bear-trap” range coming in between 1.29 and 1.2650. This pair moves inversely with Oil so as Oil started moving down, this trend made a move to the bullish side. The Neural Index moved back to the upside and the MACD crossed back over to the upside as well. However, levels are now moving towards what could be considered a “bull-trap.” Once there is a sustained break of 129.15 (closing above that level at least 2-days in a row) we are free and clear to get into long positions.

What do the indicators say?

The VantagePoint predictive 18-day moving average is 1.2773 and the PRSI is 61.6. The neural index is at a “one” position indicating the potential for short-term strength over the next 48-hours. However, these numbers are totally dependent on the FOMC announcement.

Australian Dollar/U.S. Dollar (AUD/USD)

Key Levels and market movement:

All indications on this pair point to oversold conditions.

What do the indicators say?

The predictive 18-day moving average is .75882 and the PRSI is 24. The neural index is at a “zero” position indicating the potential for short-term weakness over the next 48-hours.

New Zealand Dollar/U.S. Dollar (NZD/USD)

Key Levels and market movement:

This pair is tangled up around the key level of .6864 but can be expected to show movement around the announcement on Wednesday.

What do the indicators say?

The predictive 18-day moving average is .6864 and the PRSI is 35.

VantagePoint Demo Weekly Outlook