2011 12 07 migbank daily technical analysis report

8/3/2019 2011 12 07 Migbank Daily Technical Analysis Report

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MIG BANK / Forex Broker14, 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

MA

S-TERMMULTI-DAY

L-TERMMULTI-WEEK

STRATEGY/POSITION

ENTRYLEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD Await fresh signal.

GBP/USD Await fresh signal.

USD/JPY Await new buy trade setup above 80.00.

USD/CHF Await fresh signal.

USD/CAD Awaiting new buy trade setup.

AUD/USD Awaiting new buy trade setup.

GBP/JPY Missed sell at 123.00. Await fresh signal.

EUR/JPY Await fresh signal.

EUR/GBP Sell limit 3 0.8700 0.8565/0.8485/0.8285 0.8835

EUR/CHF Sell limit 3 1.2480 1.2380/1.12226/1.1973 1.2580

GOLD Awaiting new sell trade setup.

SILVER SHORT 3 34.1300 29.9700/26.0700/23.3400 (Entered 01/11/2011) 34.1300

DISCLAIMER &DISCLOSURESPlease read the disclaimer and thedisclosures which can be found atthe end of this report

DAILY TECHNICAL REPORT7 December, 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.



2

DAILY TECHNICAL REPORT 7 December, 2011

www.migbank.com

Sharp recovery following positive news.

EUR/USD extended sharply higher, as six central banks, reduced their USD

funding costs to ease the debt crisis. The impact was very positive for

investors around the world and has encouraged traditional “risk appetite”

markets, such as EUR/USD, AUD/USD and S&P500 to turn back higher.

Expect the recovery to be limited into 1.3610, then 1.3730 and perhaps

even 1.3850-90. Probability still favours a bearish reversal at these levels.

Meantime, support can be found at 1.3380 and 1.3146. A sustained close

beneath 1.3146 (Oct swing low) will re-establish the larger downtrend from

April and target 1.3000 (psychological level), then 1.2870 (2011 major low).

Inversely, the USD Index is maintaining its recovery higher and still targetsits recent 9-month highs near 80, (a move worth almost 10%).

Speculative (net long) liquidity flows have unwound from 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.”

US Dollar Interview on Bloomberg

S-T TREND L-T TREND STRATEGY

Await fresh signal.

EUR/USD

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

EUR/USD

EUR/USD weekly chart, Bloomberg Finance LP

USD Index daily chart, Bloomberg Finance LP

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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Break out from short-term range required.

GBP/USD saw a minor break under 1.5577 yesterday in the hourly

timeframe. However, the lack of momentum that followed warns of little

downside interest at current levels, suggesting a return to the 50% retracelevel at 1.5795. A push back over 1.5726 will warn of a fresh leg higher in

the recovery from 1.5423.

We remain alert to the fact that we are nearing the base of the year long

range which, given the short-term relief seen in the Euro-Zone, may offer

opportunities to enter long positions. This may also be advantageous if

rising yields return to the Euro-Zone and Sterling attains a safe haven status

once again.

Taking this approach will need to see levels closer to 1.5400 for a wellplaced stop. The range bound trade of the last few days is best avoided.


Await fresh 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







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Minor rebound capped at 78.24 (DeMark™ Level).

USD/JPY’s minor rebound is still being capped at 78.24 (DeMark™ Level) .

Moreover, downside risks remain, with the growing probability of a third

price retracement back to pre-intervention levels (PIR III) and potentiallyeven a new post world war record low beneath 75.35 (PINL).

Sentiment in the option markets continues to suggest that USD/JPY buying

pressure remains overcrowded as everyone continues to try and be the first

to call the market bottom.

This may inspire a temporary, but dramatic, price spike through

psychological levels at 75.00 and perhaps even sub-74.00. Such a move

would help flush out a number of downside barriers and stop-loss orders,

which would create healthy price vacuum for a potential major reversal.

The medium / long-term view remains bullish, as USD/JPY verges toward a

major long-term 40-year cycle upside reversal. Expect key cycle inflection

points to trigger into November-December this year, offering a sustained

move above our upside trigger level at 80.00/60, then 82.00 and 83.30.

Please select the link below to review our special coverage on USD/JPY.

Special Report: USDJPY Verging on a major 40 year cycle reversal

Webinar: USD/JPY’s Long-Term Structural Change

Media Reports: CNBC Bloomberg


Awaiting renewed buy trade setup.


USD/JPY

USD/JPY daily, weekly chart, Bloomberg Finance LP

http://www.migbank.com/research/howard/USDJPY_Verging_on_a_Major_40_Year_Cycle_Reversal.pdf

http://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21




http://www.cnbc.com/id/45301945



http://www.bloomberg.com/news/2011-11-24/dollar-may-rise-20-to-94-yen-on-elliot-wave-rebound-technical-analysis.html









http://www.migbank.com/research/howard/USDJPY_Verging_on_a_Major_40_Year_Cycle_Reversal.pdf



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Sustained over 0.9331 to target 0.9776.

USD/CHF Continues to edge higher back towards 0.9331. A sustained

break over this level will warn of a much larger push higher. Instead, we

favour a return to 0.9066 and potentially lower, forming a larger correctivephase.

The respite that was offered to 10 year Italian government bond yields

following the USD based swap rate cut is likely nearing completion. The

current trading zone near 5.750% is expected to see strong support, with

the potential of a return back towards 7.00% over coming weeks. If upside

pressure were to return to Italian and Spanish yields then USD/CHF will

likely experience a degree of downside pressure too.

Spanish and Italian government bonds have seen a reasonable sizedpullback over the last week, currently trading at 5.187% and 5.777% versus

6.478% and 7.355%, before the six party central bank agreement.

The improvement that we had seen in the German sovereign curve has now

slowed, when compared to yields one week ago.


Await fresh signal.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP







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Sharp Setbacks hold steady.

USD/CAD’s sharp setbacks are holding steady, following the recent short-

term DeMark™ exhaustion sell signal.

A directional confirmation above 1.0658 is still needed to unlock the

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.

Only a sustained close beneath 1.0120 and parity unlocks bearish setbacks

into the long-term 200-day MA at 0.9852 and 0.9726 (31st

Aug low).

EUR/CAD remains beneath its 200-day MA, still within a large multi-month

trading range. The strong multi-month distribution pattern is likely to

breakdown further into support levels at 1.3570 and 1.3380.

CHF/CAD has also broken back beneath its 200-day MA at 1.1375, while

breaching a multi-week trading range. This follows the dramatic price slide

lower (which was triggered by the SNB intervention). The cross-rate has

retraced more than half of its 2011 gains.


Awaiting new buy setup.


USD/CAD

USD/CAD daily, weekly charts, Bloomberg Finance LP

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







7


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Extended recovery beneath 200-day MA.

AUD/USD has extended its recovery into key resistance at 1.0340 (61.8%

Fib-Oct 28th

decline) and 200-day MA which is currently holding at 1.0412.

The bears must sustain below 1.0000 to further compound downside

pressure on the rate’s multi-year uptrend and push back towards 0.9611.

Elsewhere, the Aussie dollar remains strong against the New Zealand

dollar. However, near-term price activity is mean reverting back into the 200-

day MA. Expect a sharp setback to ensue over the multi-day horizon.

The Aussie dollar has triggered a mild recovery against the Japanese yen

and is now trading back above the neck-line of its two-year distribution

pattern. Watch for further downside scope into support at 72.00 which would

signal further unwinding of risk appetite.


Awaiting new sell trade setup.

AUD/USD


AUD/USD daily, weekly charts, Bloomberg Finance LP

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







8


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Possible short-term reversal pattern in place.

GBP/JPY continues to exhibit price action warning of a loss of momentum.

The rising wedge that we had noted in recent reports has seen its support

broken in recent trade. This now warns of a possible topping formation, with

scope for a return to the 120.00 region in the short-term.

If 120.00 is met, a degree of support would be anticipated there. An earlier

push back over 122.64 would be expected to meet resistance at 123.00.

A failure to hold over 119.38 will warn of a return to 116.84.

Over a longer period of time a substantial recovery higher is favoured,

initially towards 163.09.


Missed sell at 123.00. Await fresh signal.

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP







9


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Rangebound short-term.

EUR/JPY is exhibiting many of the same characteristics as a host of

currency pairs in the approach to the Christmas holidays. Most importantly

the recent bout of intervention by various central banks warns of a period of

coordinated intervention, which acts as a manipulation of the market,

making technical analytics harder, due to the assumption of free market

movement.

We view the fall that has taken place since 111.60 as being corrective in

nature, suggesting potential for a return to this same level. However, in the

shorter-term timeframe a corrective phase appears to have completed at

105.70. Thus we have a directional clash in two timeframes.

The EUR component of this pair is clearly affected by the movement in

EUR/USD. A break under 1.3146 in EUR/USD will end the rising phase

seen since 2010. This would likely be associated with a fall back down to

100.76 and potentially lower.

Given the above clash between the structure and events in the Euro-Zone,

we prefer to wait on the side lines.

A sustained hold over the 200 day moving average will turn the medium-

term outlook more bullish.


Await fresh signal.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY







10


www.migbank.com

Return to 0.8665 and then higher anticipated.

EUR/GBP failed to gain momentum again, this time in the hourly timeframe,

after breaking under 0.8528, reaching 0.8520 on 30 November. This now

warns of a larger rise higher, back towards the 0.8700 region. This price

behaviour has been repeated in multiple timeframes and has been a

hallmark of this currency pair over recent weeks and months. Thus the

strategy remains to sell, but at higher levels.

We continue to expect a return to rising yields within the Euro-Zone and it is

within this environment that we see the potential for Sterling to be perceived

as a safe haven. Core government bond yields have eased back somewhat

after the coordinated cut in USD based swap lines amongst selected central

banks. However, a lasting solution still appears a long way off.

Our bias remains mildly bearish with trade continuing under both the 200

day and 50 week moving averages. We keep an eye on the 1.3146 level in

EUR/USD. A push under this level will mark a clear breakdown of

confidence in the EUR, which would then likely have a knock on effect in all

EUR crosses.


Sell limit 3 at 0.8700, Objs: 0.8565/0.8485/0.8285, Stop: 0.8835.

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP daily chart, Bloomberg Finance LP

EUR/GBP








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Resistance expected again close to 1.2474.

Short strategy altered to a sell limit order at the top of the hourly range.

EUR/CHF continues to trade in a tight range, failing to meet the 1.2500 level

thus far. However, a fresh attempt appears to have been initiated to re-testthe 1.2400/2500 region. This return to the upper end of the recent trading

range has been assisted somewhat by the six bank dollar swap rate

coordination. An eventual return to rising yields is anticipated and with this

downside pressure should return to EUR/CHF.

The short-term structure that is forming is also suggestive of exhaustion,

with scope for a final push to re-test the old high at 1.2474. However, we

would anticipate a degree of resistance near this level and would then

favour a return to range bound trade.

The chance of collusion of central banks has made the current environment

difficult to trade from a technical perspective as free market movement is

one of the main assumptions of this analytic technique.

The failure of this pair to break over the 50 week moving average over

recent weeks is also an initial warning that the prior downtrend may not be

over. The large cluster of stops that is likely to be placed around the 1.2000

level is also anticipated to aid any short positioning, questioning the ability of

the SNB to hold back the possible flow of funds into Swiss Francs.

S-T TREND L-T TREND

Sell limit 3 at 1.2480, Objs: 1.2380/1.2226/1.1973, Stop: 1.2580.

EUR/CHF weekly chart, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP








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Remains negative beneath $1800.

Short-term price activity remains negative beneath resistance at $1800,

despite the recent push higher. Only a close above here would develop a

more sustained recovery into $1845.

Meanwhile, there is still heightened risk for a much larger decline if we

confirm a weekly close beneath $1600/04 and $1530 (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.

Speculative (net long) flows also support this view having recently breached

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

positions. This will trigger a temporary, but dramatic setback that would

ultimately 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

Bloomberg Countdown CNBC Squawk Box MIG Bank Gold Webinar video(BLOOMBERG & CNBC REPORTS)


Awaiting new sell trade setup.

GOLD

Gold weekly and daily charts, Bloomberg Finance LP


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.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

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






13


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Key support at $30.0000.

Silver is holding around key support at 30.0000. Only a sustained close

below here would trigger a test of the previous swing low at 26.0700.

Macro price structure continues to focus on the downside risks, following the

major sell-off in September. 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 70%, suggesting further risk aversion over the next few weeks.

This also helps explain recent divergences between gold and silver.


SHORT 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 34.1300

SILVER

Spot Silver daily and weekly charts, Bloomberg Finance LP








14


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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.

LEGALTERMS



15


www.migbank.comRon WilliamTechnical [email protected]

MIG [email protected]

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

Bjioy KarTechnical [email protected]

CONTACT

Howard FriendChief Market [email protected]



http://www.migbank.com/





http://www.migbank.com/



2011 12 07 migbank daily technical analysis report

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