2011 10-28 migbank-daily technical-analysis-report

MIG BANK / Forex Broker 14, rte des Gouttes d’Or CH-2008 Neuchâtel Switzerland

Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] www.migbank.com

Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

WINNER BEST SPECIALIST RESEARCH

MARKET

S-TERM MULTI-DAY

L-TERM MULTI-WEEK

STRATEGY/ POSITION

ENTRY LEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD Awaiting Directional Confirmation.

GBP/USD Await fresh signal.

USD/JPY Awaiting New Buy Trade Setup.

USD/CHF LONG 3 0.8600 0.9000/0.9200/0.9316 (Entered 28/10/2011) 0.8500

USD/CAD Buy Stop 3 1.0275 1.0660/1.0850/1.1110 1.0150

AUD/USD Awaiting New Sell Trade Setup.

GBP/JPY Sell limit 3 123.15 121.60/118.50/116.50 124.40

EUR/JPY SHORT 3 107.90 106.90/104.00/100.00 (Entered 28/10/2011) 109.00

EUR/GBP Sell limit 3 0.8870 0.8750/0.8580/0.8400 0.8970

EUR/CHF Await fresh signal.

GOLD Awaiting New Sell Trade Setup.

SILVER Awaiting New Sell Trade Setup.

DISCLAIMER & DISCLOSURES Please read the disclaimer and the disclosures which can be found at the end of this report

DAILY TECHNICAL REPORT 28 October, 2011

Ron William, CMT, MSTA

Bijoy Kar, CFA

Notes: Entries are in 3 units and objectives are at 3 separate levels where 1 unit will be exited. When the first objective (PT 1) has been hit the stop will be moved to the entry point for a near risk-free trade. When the second objective (PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All orders are valid until the next report is published, or a trading strategy alert is sent between reports.

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Bullish recovery holds above 200-day MA (1.4101).

EUR/USD’s short-term bullish recovery is holding steady above the long-

term 200-day MA at 1.4101, following the recent positive EU news. The

move has temporarily neutralised the larger bearish downtrend from April.

Failure to hold above the 200-day MA will warn of an emotionally charged

bull-trap and ultimately a sharp downside reversal through 1.3799 (26th Oct

low) and 1.3653 (18th Oct low), with scope into 1.3146 (Oct swing low).

Watch intermarket relationships across broad risk-related proxies such as

the developed equity markets. The euro currently shares a high correlation

of 0.85% with the S&P500 which has just climbed to an 8-week high.

Inversely, the USD Index is continuing to retrace (from its recent 6-month

highs) and is likely to find support at 74.10 and 73.40.

Speculative (net long) liquidity flows are also temporarily unwinding from

their recent spike highs (3 standard deviations from the yearly average).

This will remain strong and help resume the USD’s major bull-run from its

historic oversold extremes (momentum, sentiment and liquidity).

Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410. VIDEO

MIG Bank Webinar: “Why the US dollar is likely to gain up to 30% in 6-12 months.”

MIG Bank US Dollar Interview on Bloomberg

S-T TREND L-T TREND STRATEGY

Awaiting Directional Confirmation.

EUR/USD

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

EUR/USD

EUR/USD daily chart, Bloomberg Finance LP

USD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP

TREND 2 YEARS

200-DMA (1.4101)

EUR/USD (Daily)

BREAKOUT ZONE (1.4000)

BERMUDA TRIANGLE

FAILED

BREAKOUTS

+

-

USD INDEX (4 YEARS)

DEMARK™ BUY SIGNAL

+27% +19%

TRIGGER (15000)

COT LIQUIDITY

+10% SO FAR

3 STD ABOVE ONE YEAR AVERAGE

EXTREME NET US $ SHORT POSITIONS

USD INDEX (4 YEARS)


+27% +19%

TRIGGER

+10% SO FAR


+

-

USD INDEX (4 YEARS)


+27% +19%

TRIGGER (15000)

COT LIQUIDITY

+10% SO FAR


EXTREME NET US $ SHORT POSITIONS

9 KEY SUPPORT (73.50-73.00)

13

USD INDEX

200-DMA (75.75)

DEMARK™ BUY SIGNALS

BREAKOUT ZONE

EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%

http://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdf

http://www.youtube.com/watch?v=8JxLscMBUHY&feature=player_embedded

http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54

http://www.bloomberg.com/video/75644864/

mailto:[email protected]

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Larger recovery back into 200-day MA (1.6137).

GBP/USD is continuing a larger recovery phase back towards the 200-day

MA which is currently at 1.6137.

However, the strategy is still hampered by a lack of reliable structure, largely

due to the range bound nature of the market in the medium-term time frame.

A sustained break under 1.5632 is now required to increase the probability

of a lasting lower high.

GBP/USD has already experienced a large devaluation versus the US

Dollar, therefore any further strengthening in the US Dollar may not see the

full participation of GBP/USD. Instead GBP/USD is favoured to remain

stronger then most.


Await signal.

GBP/USD

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

GBP/USD hourly chart, Bloomberg Finance LP

GBP/USD daily chart, Bloomberg Finance LP

200-day MA


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USD/JPY still basing around its NEW all-time low.

USD/JPY maintains a confluence of DeMark™ exhaustion bullish signals,

after yet another new post WWII record low which was carved out at 75.82.

These reversal signals are also following the second post intervention

retracement in 2011, which is holding around a multi-week base pattern. It is

also worth noting that our volatility measures remain very low and continue

to favour a major breakout over the short-term horizon.

The medium/long-term view remains bullish, watching for a sustained move

above our initial upside trigger level at 77.68. This would offer a resumption

of the preferred new structural bull-cycle into the all-important psychological

level at 80.00, near 80.24 (post BOJ intervention II high).

Keep in mind that such a scenario would help reactivate the longer-term

technical bias, including prior monthly DeMark™ exhaustion signals, within

the ending diagonal pattern, which was part of a major Elliott Wave cycle.

Only a sustained weekly close below 76.25 will lead to a reassessment of

the view and extend temporary weakness into 74.55.

Please select the link below to sign up for our MIG Bank webinar on USD/JPY. This will feature an update to our previous Special Report

USD/JPY’s Long-Term Structural Change (Wednesday, November 02nd – 15:00-15:45 GMT).

- What do long-term cycles tell us about the future of USD-JPY? - How do event shocks and Central Bank Interventions impact the market? - Safe-Haven Flows: A wave of change. - High-Probability Trading Strategies.


Awaiting New Buy Trade Setup.


USD/JPY

USD/JPY daily, weekly chart, Bloomberg Finance LP

83.30

USD/JPY (Daily 1 YEAR)

QUAKE SHOCK!

POST INTERVENTION RETRACEMENT (PIR I)

POST G7

MOVE HIGH

82.00

PIR II

80.24

POST BOJ

MOVE HIGH

DEMARK™ BUY SIGNAL AFTER NEW POST WWII LOW (75.82)

MONTHLY DEMARK BUY SIGNAL

USD/JPY Weekly (2007 – 2011)

ENDING DIAGONAL

PATTERN BREAKOUT

TARGET (88-85)

http://www.migbank.com/research/howard/2011-03-29_migbank_daily-technical-analysis-report_trade-alert-update-on-USDJPY.pdf

http://www.migbank.com/fr/departement-recherche/webinars-forex-and-cfds/


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Breaking below its long-term 200 day MA (0.8735).

USD/CHF has now broken below its 200-day moving average which is

currently at 0.8735, having recently printed a lower high at 0.9083, following

the recent break under 0.8881. While under 0.9123 a continuation of this

weakness is favoured.

It is also noted that the current trading region is close to the location of the

50-week moving average, at 0.8927. Thus, a continuation of weakness

would also warn of a breakdown of the recent recovery structure. However,

back under 0.7712 is required to change the long-term bullish bias.

The recent break lower also opens up the potential for a further extension

towards 0.8600, where a return to a bullish bias would become attractive

again.


LONG 3 at 0.8600, Objs: 0.9000/0.9200/0.9316, Stop: 0.8500

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP

200-day MA


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Bears push back under the psychological 1.0000 level.

USD/CAD’s short-term price activity remains negative, as the bears push

back under the all-important psychological 1.0000 level (prior trading range).

Only a sustained close beneath here will extend bearish setbacks into the

long-term 200-day MA at 0.9813 and 0.9726 (31st Aug low). Only a close

beneath here will change the long-term positive view and encourage a sell

trade setup in our model portfolio.

Meanwhile, positive momentum needs to push above 1.0264 and 1.0400 to

rebuild the potential major upside reversal higher above the old resistance

level at 1.0673 (August high & Congestion zone).

A strong directional confirmation above here will open a much larger

recovery into 1.0850 plus. This would extend the upside breakout from the

rate’s ending triangle pattern, which was part of a major Elliott Wave cycle.

Elsewhere, EUR/CAD is extending above its 200-day MA, within a large

multi-month trading range. Key resistance continues to hold at 1.4379 (June

swing high), which has for some time marked a strong distribution pattern.

CHF/CAD is retesting its support nearby the 200-day MA at 1.1265,

following the dramatic price slide lower (triggered by the SNB intervention).

The cross-rate has now retraced more than half of its 2011 gains.


Buy Stop 3: 1.0275, Objs:1.0660/1.0850/1.1110, Stop: 1.0150


USD/CAD

USD/CAD daily, weekly chart, Bloomberg Finance LP

EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP

USD/CAD (Daily)

August High (1.0673)

200-DMA

(0.9811)

USD/CAD (Weekly)

CONFIRMATION ABOVE 1.0680

OPENS LARGER RECOVERY


MAJOR RESISTANCE

50% (1.3570)

61.8% (1.3379)

EUR/CAD (Daily)

200-DMA (1.3826)

REVERSAL PATTERN

CHF/CAD (Daily)

200-DMA (1.1265)

50% (1.1488)

61.8% (1.0893)


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Resistance at 1.0765 is likely to cap.

AUD/USD’s explosive rally is currently unwinding from overbought

conditions, ahead key resistance at 1.0765 (01st Sept high).

This level is likely to cap gains back into the 200-day MA (1.0402) and

potentially resume downside pressure on the rate’s multi-year uptrend.

The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18

th

Oct low). A break here will unlock sharp setbacks into 1.0000.

Elsewhere, the Aussie dollar remains stable against the New Zealand dollar.

The pair is still locked within its new bear cycle structure while it holds

beneath its 200-day MA. Key support can be found at 1.2320 and 1.2100.

The Aussie dollar is also gaining against the Japanese yen, after pushing

back above resistance at 80.00. Near-term support continues to hold at

77.63 (18th Oct low). A break here will resume downside scope into 76.70.


Awaiting New Sell Trade setup.

AUD/USD


AUD/USD daily, weekly chart, Bloomberg Finance LP

AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP

200-DMA CAPS BEAR MKT

AUD/NZD (Daily)

KEY SUPPORT 1.2319 / 1.2100

200- DMA

(83.15)

13

38.2% (76.70)

61.8% (68.47)

50% (72.58)

AUD/JPY (Daily)

DEMARK™ SELL SIGNAL

BREAKDOWN ADDS TO

RISK AVERSION

AUD/USD (Weekly)

38.2% (0.9144)

50% (0.8546)

61.8% (0.7947)

3 YEAR UPTREND IS UNDER

PRESSURE

STRUCTURAL LEVEL

KEY ZONE

AUD/USD (1 YEAR) DEMARK™

SELL SIGNALS

200-DMA (1.0402)


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Range bound short-term, favouring a return to 122.65.

GBP/JPY saw a minor break under 120.34 which failed to hold, reaching

120.00. This is suggestive of the potential for a further recovery leg higher

to test the region near 123.00.

The structure present since 116.84 is deemed corrective, with scope for a

final swing higher to complete this corrective phase. However, a sustained

push under the recent low at 120.00 will warn of resumption of weakness

back towards the floor near 117.00. However, an eventual return to

116.84/98 is expected, below which would open up an extension towards

115.00 immediately.

A sustained break over 123.31 is required to change the current bearish

bias. Should this take place a larger corrective phase higher would then be

anticipated.


Sell limit 3 at 123.15, Objs: 121.60/118.50/116.50, Stop: 124.40

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP

200-day MA


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Testing the 107.68 level.

EUR/JPY is currently tested the 107.68 (17th Oct high) level after pushing

higher from its range just above the 104.75/99 floor. Provided this floor is

not breached, scope is seen for a fresh swing higher.

However, the larger structure present since 114.18 favours the formation of

a lower high close to 108.03, for a return to re-test 100.76.

Failure to hold under 108.03 will warn of a larger recovery structure,

negating our medium-term bearish bias. Also, if a push over 108.03 can be

sustained this will bring into focus a potential false break lower out of a

falling channel in the daily timeframe.

A move under the annual low would open up an extension to 97.50, ahead

of 92.80, levels not seen since 2000.


SHORT 3 at 107.90, Objs: 106.90/104.00/100.00, Stop: 109.00 EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY

200-day MA


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Further swing higher anticipated towards 0.8886/85.

EUR/GBP is still holding above its 200-day moving average, which is

currently at 0.8727.

The rise from 0.8530 is viewed as being a corrective structure with scope for

a lower high to form closer to the old 0.8886/85 double top. So, although

further short-term strength may follow, supply is favoured to manifest near

0.8885.

Should this move be realised, it would also take us close to the upper end of

the recent trading range. There is an increased probability of general range

bound trade, thus short entry at higher levels is also supported by the

potential of a return to a period similar to that between 2003 and 2007 (not

shown).

A move back over 0.8960 is required to neutralise our mild bearish bias, in a

generally rangebound environment.


Sell limit 3 at 0.8870, Objs: 0.8750/0.8580/0.8400, Stop: 0.8970

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP daily chart, Bloomberg Finance LP

EUR/GBP


200-day MA


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Fails to garner momentum close to channel resistance.

EUR/CHF failed to garner momentum after meeting supply close to the

resistance of an hourly rising channel. The subsequent weakness is

currently testing the support of this same structure. A failure to find support

here would warn of a larger fall back down to the 1.2000 level.

Although bullish for the time being, it is expected that the 1.2500-1.3000

zone may limit the current recovery phase from 1.0075. It is anticipated that

the market’s willingness to trade with the bias of the SNB may exhaust

should this trading region be met, as further gains in this cross are likely to

become more dependent on economic releases.

A sustained move under 1.2024 will alter our near-term bullish bias.

S-T TREND L-T TREND

Await fresh trading signal.

EUR/CHF daily chart, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP


200-day MA


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Risk of a larger decline beneath $1530.

Gold remains bearish after its dramatic 20% price fall, which helped confirm

the extreme overbought conditions (marked by DeMark™ indicators). This

also timed a key cycle peak, ahead of that all-important $2000 glass-ceiling.

Most concerning is that speculative (net long) flows have recently breached

a key downside level which may threaten over 2 years of sizeable long gold

positions.

In price terms, Gold’s latest 20% bearish slide is still worth less than the

largest average drawdown measured since the start of the yellow metal’s

long-term bull market in 1999.

There is heightened risk of a much larger decline if we confirm a weekly

close beneath $1600 and $1554-30 (200-day MA/swing low), which has not

been breached in 3 years!

A number of “bargain hunting” trend-followers will be watching this

benchmark “line in the sand” for repeat support or a potential big squeeze

lower into $1300 and perhaps even $1040-1000. Remember, this would still

offer a unique buying opportunity in the near future.

Please select links for in-depth Gold coverage:

Special Report “Gold’s mountainous peak at risk…beneath $1600” VIDEO

MIG Bank Gold Interview on CNBC Squawk Box MIG Bank Gold Webinar video (CNBC & BLOOMBERG REPORTS)


Awaiting New Sell Trade Setup.

GOLD

Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP


TREND CHANNEL

(12 YEARS)

I

RISK ZONE III

CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE INTO $1300 & $1040-1000

26%

34%

20%

SO FAR

25%

II

COT NET LONG SPECULATOR POSITIONS

OVER 2 YEARS OF SIZEABLE LONG

GOLD POSITIONS UNDER THREAT

IF KEY LEVEL BREAKS

200-DMA NOT BROKEN IN 3 YEARS!

DEMARK™ SIGNAL WARNED OF GOLD’S OVERBOUGHT CONDITIONS

BREAKOUT

$1704

$1600

DOWNSIDE: $1600 / $1530 UPSIDE: $1760 / $1844 GOLD KEY TRIGGER LEVELS

$1532

DOUBLE TOP

$1760

http://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdf

http://www.youtube.com/watch?v=haKdlGKWyjQ&feature=player_embedded&list=PL953E96C7BE48D2FA

http://video.cnbc.com/gallery/?video=3000042202

http://www.fxstreet.com/webinars/sessions/session.aspx?id=8f81a2e3-e29b-4031-b370-a85149271145

http://www.cnbc.com/id/44310840

http://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.html


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Key support at $26.0700.

Silver’s latest price capitulation is a painful reminder to the investment

community that lightning can strike twice. Note, this marks the second time

silver has crashed, following its 30% fall last April.

The move was triggered following a DeMark™ exhaustion sell signal and

has now wiped out almost 50% of silver’s prior gains (taken from Silver’s all-

time high at 49.7900) which was last seen in 1980.

Such a dramatic move traditionally produces volatile trading ranges. This

allows the market to have enough time to recover and accumulate renewed

buying interest.

Expect a large trading range to hold between $37.0000-26.0700 over the

multi-week/month horizon, with downside macro risk into $21.5165 (61.8%

Fib-1999 bull market) and $20.0000. This would still maintain silver’s long-

term uptrend and help offer a potential buying opportunity for the eventual

resumption higher.

Continue to watch the gold-silver “mint” ratio which has now accelerated

higher by 67%, suggesting further risk aversion over the next few weeks.


Awaiting New Sell Trade Setup.

SILVER

Spot Silver daily, weekly chart and Gold/Silver “mint” ratio, Bloomberg Finance LP


BULL MARKET

FROM 1999

Silver Monthly (since 1980)

13

38.2% (32.3135)

50% (26.9150)

61.8% (21.5165)

I

II

OVER 30 YEAR BASE PATTERN

Silver HITS 1980 Spike High! DEMARK™ SELL SIGNAL

13 YEAR LEVEL

UNWINDING 67% FROM

OVERSOLD TERRITORY

Gold/Silver "Mint" Ratio

KEY SUPPORT (26.0700)

DEMARK™ SELL SIGNALS

Silver (Daily)

200 DMA (36.5125)


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MIG BANK disclaims, without limitation, all liability for any loss or damage of any kind,

including any direct, indirect or consequential damages.

Material Interests

MIG BANK and/or its board of directors, executive management and employees may have or

have had interests or positions on, relevant securities.

Copyright

All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or

distributed without the express permission of MIG BANK.

Notes: Entries are in 3 units and objectives are at 3 separate levels where 1

unit will be exited. When the first objective (PT 1) has been hit the stop will be

moved to the entry point for a near risk-free trade. When the second objective

(PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All

orders are valid until the next report is published, or a trading strategy alert is

sent between reports.

DISCLAIMER

No information published constitutes a solicitation or offer, or recommendation, or advice, to

buy or sell any investment instrument, to effect any transactions, or to conclude any legal act

of any kind whatsoever.

The information published and opinions expressed are provided by MIG BANK for personal

use and for informational purposes only and are subject to change without notice. MIG BANK

makes no representations (either expressed or implied) that the information and opinions

expressed are accurate, complete or up to date. In particular, nothing contained constitutes

financial, legal, tax or other advice, nor should any investment or any other decisions be

made solely based on the content. You should obtain advice from a qualified expert before

making any investment decision.

All opinion is based upon sources that MIG BANK believes to be reliable but they have no

guarantees that this is the case. Therefore, whilst every effort is made to ensure that the

content is accurate and complete, MIG BANK makes no such claim.

LEGAL TERMS

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Ron William Technical Strategist [email protected]

MIG BANK

[email protected] www.migbank.com

14, rte des Gouttes d’Or CH-2008 Neuchâtel Tel.+41 32 722 81 00

Bjioy Kar Technical Strategist [email protected]

CONTACT

Howard Friend Chief Market Strategist [email protected]



http://www.migbank.com/



2011 10-28 migbank-daily technical-analysis-report

Economy & Finance