2011 10-11 migbank-daily technical-analysis-report

DAILY TECHNICAL REPORT 11 October, 2011

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

M S-TERM MULTI-DAY

L-TERM MULTI-WEEK

STRATEGY/ POSITION

ENTRY LEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD Awaiting New Sell Trade Setup.

GBP/USD Await fresh signal.

USD/JPY LONG 3 77.20 80.20/81.50/83.30 (Entered 25/08/2011) 75.90

USD/CHF LONG 2 0.8905 0.9110/0.9600 (Entered 21/09/2011) 0.8995

USD/CAD LONG 3 1.0390 1.0670/1.0880/1.1130 (Entered 30/09/2011) 1.0210

AUD/USD Sell Stop 3 0.9905 0.9380/0.9000/0.8770 1.0100

GBP/JPY Possibly looking to sell higher.

EUR/JPY SHORT 3 104.50 103.90/100.70/97.50 105.10

EUR/GBP Await fresh signal.

EUR/CHF Buy limit 3 1.2180 1.2260/1.2344/1.2500 1.2100

GOLD SHORT 1 1805 Lowered Objective 1300 (Entered 12/09/2011) 1704

SILVER Await New Sell Trade Setup

Ron William, CMT, MSTA

Bijoy Kar, CFA

WINNER BEST SPECIALIST RESEARCH

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

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.

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

2


www.migbank.com

Resistance caps bounce at 1.3690.

EUR/USD’s bearish (wave 3) impulsive slide has retraced over half of its

uptrend (taken from June 2010). Short-term price activity is unwinding

from oversold conditions and has recently broken above the multi-week

channel.

Key resistance is likely to cap any potential oversold bounces around

1.3690 (28th Sept high) and 1.3797 (22nd Sept high), then 1.3937 (15th Sept

high), which is near the previous breakout zone at 1.4000.

The bears still need to confirm a meaningful breakout beneath that all-

important psychological level at 1.3000 to unlock further scope into 1.2860

and much lower.

Inversely, the US dollar remains strong (as most other popular “risk”

markets weaken from overcrowded uptrends). Having said that, short price

activity is unwinding sharply ahead of the key level at 80.00.

Speculative (net long) liquidity flows have also spiked above our trigger

level of 15000 contracts (which is 3 standard deviations from the yearly

average). This will help sustain the bull-run from 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.”

S-T TREND L-T TREND STRATEGY

Awaiting New Sell Trade Setup.

EUR/USD

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

EUR/USD

EUR/USD daily chart, Bloomberg Finance LP

US Dollar Index daily & weekly chart, with COT liquidity, Bloomberg Finance LP

IMPULSIVE (WAVE 3)DECLINE TARGETS

1.3000 & 1.2870 TREND2 YEARS (1.3960)

200-DMA (1.4056)

EUR/USD (Daily)

BIG LEVEL

(1.4000)

BERMUDA TRIANGLE

BREAKOUTS FAILED

+

-

US$ INDEX (4 YEARS)

DEMARK™BUY SIGNAL

+27% +19%

TRIGGER (15000)

COT LIQUIDITY9 KEY 13 SUPPORT (73.50-73.00)

US DOLLAR INDEX (Daily – 2 years)

200-DMA (76.00)

DEMARK™ BUY SIGNALS

RECOVERY TARGETS

80.00

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

mailto:[email protected]

3


www.migbank.com

Flat correction possibly reaching completion.

GBP/USD has recovered well after meeting 1.5272 last week, in what is

potentially a flat corrective phase that originated at 1.5328. Scope is now

seen for a lower high to form for a resumption of weakness.

However, if a sustained push over 1.5716 can be realised, this will renew

scope of a further push higher towards the 200 day moving average,

currently near 1.6130.

It is anticipated that 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, as displayed in crosses like GBP/AUD, which appears

to be exhibiting signs of a longer-term bullish reversal. (See our GBP/AUD

special focus here).


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

http://www.migbank.com/research/howard/Special%20focus%20-%20GBPAUD%20-%2030.09.2011.pdf


4


www.migbank.com

Basing around the all-time low.

USD/JPY is maintaining a confluence of DeMark™ exhaustion bullish

signals, after the new post WWII record low which was carved out at 75.95.

The reversal signals are also taking place following the second post

intervention retracement in 2011, which is holding around a multi-day base

pattern support, near 76.30-25.

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 here and 76.25 will lead to a

reassessment of the view and extend temporary weakness into 74.55.


Long 3 at 77.20, Obj: 80.20/81.50/83.30, Stop: 75.90


USD/JPY

USD/JPY daily and weekly charts, Bloomberg Finance LP

WAVE 5

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 (75.95)

MONTHLY DEMARK BUY SIGNAL

USD/JPY Weekly (2007 – 2011)

ENDING DIAGONAL

PATTERN

(88-85

BREAKOUT TARGET

)


5


www.migbank.com

Finds initial support at the base of an hourly rising channel.

Stop raised to 0.8995. First target adjusted to 0.9110.

USD/CHF saw a substantial corrective phase lower yesterday, testing the

base of an hourly channel formation, where a degree of support is

currently evident. We would view a break under 0.9003 as bearish with an

increased probability of a further extension lower.

The 50 week moving average, currently at 0.8966, remains key, with a

failure to hold above this measure warning of renewed weakness.

Longer-term a return towards parity is anticipated and potentially higher.

Back under 0.7712 is required to change this long-term bullish bias.


Long 2 at 0.8905, Objs: 0.9110/0.9600, Stop: 0.8995.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP


6


www.migbank.com

Sharp correction holding within previous range.

USD/CAD’s latest sharp correction is pushing lower within last Friday’s

trading range. Our long position in the model portfolio continues to favour

a resumption higher above the resistance level at 1.0673 and 1.0880.

Meanwhile, only a sustained close beneath 1.0200 will extend setbacks

into 1.0000 (psychological level and prior trading range).

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 1.0932,

following the dramatic price slide lower (triggered by the SNB

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

gains.


LONG 3: 1.0390, Objs: 1.0670/1.0880/1.1130, Stop: 1.0210


USD/CAD

USD/CAD daily chart, Bloomberg Finance LP

EURCAD and CHFCAD daily charts, Bloomberg Finance LP

USD/CAD (Weekly)

BULLISHRECOVERY

TARGETS1.0850

DEMARK™ BUY SIGNAL

USD/CAD (Daily)

MAJOR LOW

(0.9446)

200-DMA(0.9784)

August High (1.0673)

MAJOR RESISTANCE

200-DMA (1.3769)

EUR/CAD (Daily)

50% (1.3570)

61.8% (1.3379)

REVERSAL PATTERN

CHF/CAD (Daily)

200-DMA (1.0932)


7


www.migbank.com

Key resistance zone caps bounce at 1.0000.

AUD/USD’s key resistance zone has capped the recent oversold bounce

around 1.0000. Meanwhile, the medium-term downtrend remains bearish

and favours a resumption back into 0.9388 (04th Oct low) and 0.9220.

Only a sustained break above 1.0000 (psychological-pivot level) will extend

the rate’s short-term recovery higher into next resistance at 1.0200.

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 also continues to weaken against the Japanese yen,

resuming the pattern breakout and now targets 72.58 (50% Fib-bull market

from 2008). The move reinforces current risk aversion in the global financial

community.


Sell Stop 3: 0.9905, Obj: 0.9380, 0.9000, 0.8770, Stop: 1.0100

AUD/USD


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

AUD/USD daily chart, Bloomberg Finance LP

200-DMA CAPS BEAR MKT

AUD/NZD (Daily)

KEY SUPPORT 1.2319 / 1.2100

13

38.2% (76.70)

50% (72.58)

D/JPY (Daily)

DEMARK™

61.8% (68.47)

AUSELL SIGNAL

BREAKDOWN

200-DMA

(83.56)

ADDS TORISK

AVERSION

AUD/USD (1 YEAR)

TD RISK(1.0935)

TD RISK(1.1102) DEMARK™

SIGNALS SELL

200-DMA (1.0391) KEY ZONE


8


www.migbank.com

Lower high sought for a return to 116.98.

GBP/JPY appears to be in the process of completing a corrective phase

from 116.84 after finding support last week at 116.98. However, it is

anticipated that gains will be limited to the region between 120.85 and

123.31, where a lower high would be favoured to form.

A failure to hold above 116.84/98 will suggest the end to recovery

potential, with a resumption towards 115.00 then favoured.

A push under 119.09 in the hourly timeframe will begin to break down the

bullish structure seen from 116.98, increasing the probability that a fresh

downswing has begun.


Possibly looking to sell higher.

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP


9


www.migbank.com

Lower high sought for a fresh downswing.

First objective raised to 103.90, Stop adjusted to 105.10.

EUR/JPY saw a minor break out a rising hourly channel yesterday. If this

break fails to hold a fresh swing to the downside will become more likely

over coming sessions.

With this in mind, a lower high is sought for a return towards 100.76

initially. Under the annual low would then open up an extension to 97.50,

ahead of 92.80, levels not seen since 2000.

In order to negate the medium-term bearish bias, we require a sustained

push back over 108.03.


Short 3 at 104.50, Objs: 103.90/100.70/97.50, Stop: 105.10.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY


10


www.migbank.com

Returns to trade close to the 200 day moving average.

EUR/GBP has returned to trade close to the 200 day moving average, after

failing to close under daily trend-line support in recent sessions. The

inclination remains to look for a return to weakness given the break down

in longer-term structure. In particular, we note the push under 0.8672

which has met 0.8530 so far.

With the above in mind, an eventual break under 0.8530 is favoured and is

currently viewed as the best trigger for strategy formulation.

As noted in prior reports a return to range bound trade is possible, similar

to the period between 2003 and 2007 (not shown).


Short stopped. Await fresh signal.

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP daily chart, Bloomberg Finance LP

EUR/GBP



11


www.migbank.com

Weakness follows re-test of channel resistance.

Long strategy entry raised to 1.2180 and first objective to 1.2260.

EUR/CHF continues to be contained by an hourly rising channel, with the

latest phase lower following a second failed attempt at breaking over

hourly channel resistance. This structure is also currently managing to

keep trade above the 200 day moving average.

An eventual test of the 50 week moving average (currently at 1.2475) is

anticipated.

It is also noted that price is approaching the 1.2500-1.3000 zone which is

likely reaching the limit of the markets willingness to trade with the bias of

the SNB. Should these levels be met, it is expected that further gains in

this cross will become more dependent on Swiss economic releases.

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

S-T TREND L-T TREND

Buy limit 3 at 1.2180, Objs: 1.2260/1.2344/1.2500, Stop: 1.2100.

EUR/CHF daily chart, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP



12


www.migbank.com

RISK of a larger decline beneath $1600.

Lowered final objective to 1300. Gold remains bearish after its dramatic

20% price fall, which helped confirm the extreme overbought conditions

(marked by DeMark™ indicators), that timed with a key cycle peak, ahead

of that all-important $2000 glass-ceiling.

The “perfect storm” of bearish technical signals is also being pressured by

the CME’s recent 55% hike in margin requirements, which is helping to

squash the largest of gold-bug positions. 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 $1534 (200-day MA), 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.

Please select links for in-depth Gold coverage: Special Report “Gold’s mountainous peak at risk…beneath $1600” MIG Bank Gold Interview on CNBC Squawk Box (CNBC & BLOOMBERG REPORTS) MIG Bank Gold Webinar video


SHORT 1: 1805, Objs: Lowered to 1300. Stop: 1704

GOLD

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


TREND CHANNEL (12 YEARS)

I

RISK ZONE III

BIGGEST DRAWDOWNS 34% (2008) 26% (2006) 25% (1999) AVERAGE = 28%

25%

26%

34%

20% SO FAR

COT NET LONG SPECULATOR POSITIONS

OVER 2 YEARS OFSIZEABLE LONG

GOLD POSITIONSUNDER THREAT

IF KEY LEVEL BREAKS

200-DMANOT TESTED IN 3 YEARS!

RISK (1935)

DEMARK™ SIGNAL WARNED OF GOLD’S OVERBOUGHT CONDITIONS WHICH LED TO A $200 DROP IN 3 DAYS!

BREAKOUT

$1704

DOWNSIDE:

$1600

$1600 / $1530 UPSIDE: $1935 / $2000GOLD KEY TRIGGER LEVELS

$1532

II

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

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

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

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


13


www.migbank.com

KEY support at $26.0700.

Exited at 32.5200. 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 from April this

year.

Exited at 32.5200. 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 from April this

year.

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.

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 dramatic moves traditionally produces volatile trading ranges. This

allows the market to have enough time to recover and accumulate

renewed buying interest.

Such dramatic moves 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.

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.

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

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

S-T TREND S-T TREND L-T TREND L-T TREND STRATEGY STRATEGY

Awaiting New Sell Trade Setup.

SILVER

Spot Silver daily, monthly chart and gold-silver ratio, Bloomberg Finance LP


OVER 30 YEAR BASE BULL

MARKET FROM

1999

Silver Monthly (since 1980)

13

61.8% (21.5165)

38.2% (32.3135)

50% (26.9150)

Silver HITS 1980 Spike High! DEMARK™ SIGNALSELL

I

II

UNWINDING 67% FROM OVERSOLD TERRITORY

Gold/Silver Ratio

67%13 YEAR LEVEL

Silver (Daily) 13

200 DMA(32.8700)

SELL DEMARK™

SIGNALS

KEY SUPPORT

13


14


www.migbank.com

Limitation of liability

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.

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

DIS

CLA

IME

R

15


www.migbank.com Chief Market Strategist [email protected]

Howard Friend

[email protected] Technical Strategist Bjioy Kar

CH-2008 Neuchâtel Tel.+41 32 722 81 00

14, rte des Gouttes d’Or

www.migbank.com

MIG BANK [email protected] Technical Strategist

[email protected]

Ron William

CONTACT



http://www.migbank.com/



2011 10-11 migbank-daily technical-analysis-report

Economy & Finance

eurusd daily chart

daily technical reportusdjpy

daily technical reportgbpusd

daily technical report11

key level

gbpaudgbpusd daily chart

technical strategist

technical reporteurusd