2011 11-01 migbank-daily technical-analysis-report
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Forex broker MIG BANK presents the daily forex trading technical report.TRANSCRIPT
DAILY TECHNICAL REPORT 01 November, 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 SHORT 2 1.3950 1.3650/1.3470 (Entered 01/11/2011) 1.3840
GBP/USD Buy limit 3 1.5840 1.5940/1.6153/1.6400 1.5740
USD/JPY Buy Stop 3 78.20 80.05/82.00/83.30 (Entered 01/11/2011) 76.50
USD/CHF LONG 3 0.8600 All three objectives to 0.9000 (Entered 28/10/2011) 0.8800
USD/CAD LONG 3 1.0050 1.0270/1.0660/1.0850 (Entered 01/11/2011) 0.9890
AUD/USD SHORT 3 1.0570 1.0230/1.0010/0.9710 (Entered 01/11/2011) 1.0750
GBP/JPY Buy limit 3 122.70 124.10/126.00/127.32 121.30
EUR/JPY Await fresh signal.
EUR/GBP Look to sell higher.
EUR/CHF Await fresh signal.
GOLD SHORT 3 1710 1600/1530/1300 (Entered 01/11/2011) 1760
SILVER SHORT 3 34.1300 29.9700/26.0700/23.3400 (Entered 01/11/2011) 35.6880
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
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DAILY TECHNICAL REPORT 01 November, 2011
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Sharp reversal from key resistance.
Achieved PT1 objective at 1.3840 and reduced stop beneath breakeven,
thereby locking in profits and ensuring a risk free trade.
EUR/USD has extended its sharp reversal from key overhead resistance
(including an important 2 year trend-line).
The dramatic move has now confirmed the emotionally charged bull-trap
that we had anticipated and ultimately opens further downside momentum
through 1.3653 (18th Oct low), with scope into 1.3146 (Oct swing low).
Further pressure is also weighing from broad risk-related proxies. The euro
currently shares a high correlation of 0.85% with the S&P500 which is now
unwinding from new multi-week highs.
Inversely, the USD Index has turned much higher from recent support at
74.10. The renewed bull move targets the recent 6 month highs near 80.
Speculative (net long) liquidity flows are holding steady around their recent
spike highs (3 standard deviations from the yearly average). This will likely
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
SHORT 1: 1.3950, Obj: 1.3650/1.3470, Stop: 1.3840
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
BERMUDA TRIANGLE FAILED
BREAKOUTS
UPTREND(2 YEARS)
200-DMA(1.4102)
EUR/USD (Daily)
BREAKOUT ZONE
(1.4000)
SHARP REVERSALAT KEY RESISTANCE
TARGETS 1.3000 & 1.2870
+
-
USD INDEX (4 YEARS)
DEMARK™BUY SIGNAL
+27% +19%
TRIGGER (15000)
COT LIQUIDITY
+10% SO FAR
3 STD ABOVEONE YEAR AVERAGE
EXTREME NET US $ SHORT POSITIONS
9 KEY SUPPORT (73.50-73.00)
USD INDEX
13
200-DMA (75.74)
DEMARK™ BUY SIGNALS
BREAKOUT ZONE
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%
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DAILY TECHNICAL REPORT 01 November, 2011
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Higher low sought for a return to 1.6167.
GBP/USD Continues to weaken after meeting resistance close to the 200
day moving average last week. However, structure from 1.5272 is
suggestive of a potential higher low versus 1.5632, for a return to 1.6153
and then higher still.
We remain wary of the general range bound nature of this market in the
medium-term time frame.
While above 1.5632 a further leg higher is favoured. However, if this
region fails to contain the current corrective phase, then the bias will turn
negative again.
GBP/USD has already experienced a large devaluation versus the US
Dollar, therefore any strengthening in the US Dollar may not see the full
participation of GBP/USD. Instead GBP/USD is favoured to remain
stronger than most.
S-T TREND L-T TREND STRATEGY
Buy limit 3 at 1.5840, Objs: 1.5940/1.6153/1.6400, Stop: 1.5740.
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
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DAILY TECHNICAL REPORT 01 November, 2011
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USD/JPY intervention favours test of 80.00.
USD/JPY’s latest intervention by the BOJ favours a test of that all-
important psychological level at 80.00. This marks the BOJ’s third time to
officially intervene on the rate this year, after it carved out yet another new
post WWII record low at 75.35.
Multiple DeMark buy signals were also triggered within the multi-week
base pattern which has now broken higher (as had been expected by our
low volatility measures).
The medium/long-term view is more bullish, favouring a sustained move
above our initial upside trigger 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.
S-T TREND L-T TREND STRATEGY
Buy Stop at 78.20, Obj: 80.05/82.00/83.30, Stop: 76.50
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 426
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 (I) HIGH
82.00
PIR II
80.24
POST BOJ
MOVE (II) HIGH
DEMARK™ BUY SIGNAL AFTER NEW POST WWII LOW (75.35)
POST BOJ
MOVE (III) HIGH
MONTHLY DEMARK BUY SIGNAL
USD/JPY Weekly (2007 – 2011)
ENDING DIAGONAL
PATTERN
BREAKOUT TARGET
(85-79)
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DAILY TECHNICAL REPORT 01 November, 2011
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Closes in on 0.9000, where a lower high may form.
All three objectives moved to 0.9000. Stop raised to 0.8800.
USD/CHF has moved back over the 200 day moving average and is now
closing in on 0.9000, where a lower high may form for a further corrective
swing lower.
Although the medium-term view remains bullish a re-test of the region
close to 0.8242 is possible ahead of a potential return to 0.9316.
Movement in USD/CHF is likely to be affected by the SNB attempting to
maintain EUR/CHF around 1.2200. However, back under 0.7712 is
required to change the medium-term bullish bias.
A push back over 0.9083 is required to open up a return towards the
recent high at 0.9316.
S-T TREND L-T TREND STRATEGY
Long 3 at 0.8600, Objs: All three to 0.9000, Stop: 0.8800
USD/CHF hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
USD/CHF
USD/CHF daily chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 01 November, 2011
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Bulls reverse higher from psychological 1.0000 level.
USD/CAD’s short-term price activity has turned positive, with the sharp
bullish reversal from the psychological 1.0000 level (prior trading range).
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).
Only a sustained close beneath here will unlock bearish setbacks into the
long-term 200-day MA at 0.9813 and 0.9726 (31st Aug low).
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.
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 1.1275,
following the dramatic price slide lower (triggered by the SNB
intervention). The cross-rate has now retraced more than half of its 2011
gains.
S-T TREND L-T TREND STRATEGY
LONG 3: 1.0050, Objs:1.0270/1.0660/1.0850, Stop: 0.9890
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
USD/CAD
USD/CAD daily, weekly chart, Bloomberg Finance LP
EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP
USD/CAD (Weekly)
CONFIRMATION ABOVE 1.0680
OPENS LARGERRECOVERY
DEMARK™ BUY SIGNAL
USD/CAD (Daily)
August High (1.0673)
200-DMA(0.9813)
MAJOR RESISTANCE
50%(1.3570)
EUR/CAD (Daily)
200-DM61.8%
(1.3379) A (1.3833)
REVERSAL PATTERN
CHF/CAD (Daily)
200-DMA(1.1275)
61.8%(1.0893)
50% (1.1488)
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DAILY TECHNICAL REPORT 01 November, 2011
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Sharp setbacks extend.
AUD/USD is extending its sharp setbacks from key resistance at 1.0765
(01st Sept high) and has now pushed beneath the 200-day MA (1.0407).
A sustained move below here is likely to mount downside pressure on the
rate’s multi-year uptrend.
The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18th
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 has reversed gains against the Japanese yen and is now
trading back below the long-term 200-day MA which is currently at 83.11.
Near-term support continues to hold at 77.63 (18th Oct low). A break here
will resume downside scope into 76.70 and signal further unwinding of risk
appetite.
S-T TREND L-T TREND STRATEGY
SHORT 3: 1.0550, Obj: 1.0230/1.0010/0.9710, Stop: 1.0750
AUD/USD
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
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
(83.12)
61.8% (68.47)
SELL13
38.2% (76.70)
50% (72.58)
AUD/JPY (Daily)
DEMARK™ SIGNAL
AUD/USD(Weekly)
38.2% (0.9144)
50% (0.8546)
3 YEAR UPTRENDIS UNDER
PRESSURE
STRUCTURAL LEVEL
61.8% (0.7947)
KEY ZONE
AUD/USD (1 YEAR) DEMARK™
SIGNALS SELL
200-DMA (1.0407)
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DAILY TECHNICAL REPORT 01 November, 2011
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Clear break over 123.31 suggests scope for a larger recovery.
GBP/JPY saw swift surge higher driven by the intervention of the BOJ
earlier in the week in USD/JPY. This has led to a breach above the key
123.31 level, which now warns of a much larger corrective phase higher.
In fact a return towards 129.00/130.00 is now possible given the daily
structure present since 116.84. A push back under 121.39 is required to
negate this positive structure.
Assuming that further short-term strength can be realised, a lower high
would be anticipated close to 129.00. Thus the region between 129.00
and 130.00 would be attractive for renewed short positioning.
In the meantime, a higher low may form close to the old 122.38/65 ceiling,
thus enabling a short-term swing back into the 129.00-130.00 region.
S-T TREND L-T TREND STRATEGY
Buy limit 3 at 122.70, Objs: 124.10/126.00/127.32, Stop: 121.30
GBP/JPY
GBP/JPY daily chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
GBP/JPY hourly chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 01 November, 2011
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Higher low anticipated versus 100.76.
EUR/JPY has seen a significant break higher out of a falling channel,
leaving a false break lower at 100.76, in the daily timeframe. Potential now
exists for a higher low to form versus 100.76 for a further recovery leg
higher.
This is further bolstered by the failure to remain below 108.03, which
opens up a return towards the 200 day moving average, currently at
112.64.
Should the region near 112.64 be met a lower high would be favoured to
form in that region. In the meantime, scope is seen for a higher low versus
104.75. Failure to maintain a foot hold over this level will negate
expectations of a return towards the 200 day moving average.
S-T TREND L-T TREND STRATEGY
Await fresh signal.
EUR/JPY hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
EUR/JPY daily chart, Bloomberg Finance LP
EUR/JPY
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DAILY TECHNICAL REPORT 01 November, 2011
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Lower high possibly in place at 0.8831.
Short strategy removed. Look to sell higher.
EUR/GBP saw a push back under 0.8670 yesterday which now likely leaves
a lower high at 0.8831, very close to the region in which we expected
weakness to manifest again, near the old double top at 0.8886/85.
This now turns the bias bearish again in the short-term, although a squeeze
higher is anticipated for the creation of a further lower high versus 0.8831.
Should an earlier break back under 0.8530 manifest then the longer-term
will also become biased to the downside.
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.
S-T TREND L-T TREND STRATEGY
Look to sell higher.
EUR/GBP hourly chart, Bloomberg Finance LP
EUR/GBP daily chart, Bloomberg Finance LP
EUR/GBP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 01 November, 2011
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Trades in a tight range above 1.2000. Breakout sought.
EUR/CHF failed to garner momentum after meeting supply close to the
resistance of an hourly rising channel and has subsequently fallen under
the support of this same structure. This now warns of a return to the key
high near 1.1973, close to the 1.2000 floor in EUR/CHF.
Should a re-test of the 1.2000 region take place with a fall under 1.1973
also following, this would warn of the end of the recovery seen since
1.0075, increasing the probability of a return to this level.
This also brings back into focus the 1.2500 – 1.3000 zone where resistance
was always anticipated.
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
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 01 November, 2011
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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)
S-T TREND L-T TREND STRATEGY
SHORT 3: 1710, Obj: 1600/1530/1300, Stop: 1760
GOLD
Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
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 OFSIZEABLE LONG
GOLD POSITIONSUNDER THREAT
IF KEY LEVEL BREAKS
200-DMANOT BROKEN IN 3 YEARS!
DEMARK™ SIGNALWARNED OF GOLD’S OVERBOUGHT CONDITIONS
BREAKOUT
$1704
DOWNSIDE: $1600 / $1530 UPSIDE: $1760
$1600
/ $1844GOLD KEY TRIGGER LEVELS
$1532
DOUBLE TOP
$1760
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DAILY TECHNICAL REPORT 01 November, 2011
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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.
S-T TREND L-T TREND STRATEGY
SHORT 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 35.6880
SILVER
Spot Silver daily, weekly chart and Gold/Silver “mint” ratio, Bloomberg Finance LP
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
BULL MARKET
FROM 1999
Silver Monthly (since 1980)
13
61.8% (21.5165)
38.2%(32.3135)
50%(26.9150)
I
II
OVER BASE PATTERN 30 YEAR
Silver HITS 1980 Spike High! DEMARK™ SIGNALSELL
13 YEAR LEVEL
UNWINDING 67% FROM OVERSOLD TERRITORY
Gold/Silver "Mint" Ratio
KEY SUPPORT (26.0700)
DEMARK™ SIGNALS
Silver (Daily) SELL
200 DMA(36.5125)
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DAILY TECHNICAL REPORT 01 November, 2011
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including any direct, indirect or consequential damages.
Material Interests
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or have had interests or positions on, relevant securities.
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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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DAILY TECHNICAL REPORT 01 November, 2011
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
Ron William
CONTACT