2011 12 09 Migbank Daily Technical Analysis Report

8/3/2019 2011 12 09 Migbank Daily Technical Analysis Report

http://slidepdf.com/reader/full/2011-12-09-migbank-daily-technical-analysis-report 1/15

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

MA

S-TERMMULTI-DAY

L-TERMMULTI-WEEK

STRATEGY/POSITION

ENTRYLEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD Sell Stop 3 1.3280 1.3140/1.2990/1.2870 1.3460

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 Sell Stop 3 1.0050 0.9950/0.9660/0.9380 1.0210

GBP/JPY Sell limit 3 123.00 122.00/121.00/120.00 124.00

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 1.2380/1.2226/1.1973 1.2580

GOLD Sell Stop 3 1705 1605/1530/1300 1750

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 REPORT9 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 9 December, 2011

www.migbank.com

Bears push lower into 1.3212 after EU Summit.

EUR/USD bears have pushed lower, as expected, following the EU Summit

and in price terms, still target support at 1.3212 (25th

Nov low) and 1.3146

(Oct swing low).

We have opened a sell trade setup favouring extended downside scope.

Our cycle analysis suggests increased volatility over the next two weeks

across “risk” proxies, including the equity and commodity markets.

A sustained close beneath 1.3146 will re-establish the larger downtrend

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

low).

Meanwhile, resistance can be found at 1.3550 (02 Dec high), then 1.3610

and 1.3730. Any rebound into these levels is likely to be short-lived.

Inversely, the USD Index is maintaining its recovery higher and still targets

its 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

Sell stop 3: 1.3280, Obj: 1.3140/1.2990/1.2870, Stop: 1.3460

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 and COT Liquidity, Bloomberg Finance LP

200-DMA (1.4077)

BERMUDATRIANGLE FAILED

BREAKOUTS

UPTREND2 YEARS

EUR/USD (Daily)

BREAKOUTZONE

(1.4000)

1.3000 (PSYCHOLOGICAL) 1.2870 (2011 MAJOR LOW)

+

-

USD INDEX(4 YEARS)

DEMARK™

BUY SIGNAL

+27% +19%

TRIGGER(15000)

COT LIQUIDITY

+10%SO FAR

EXTREME NETUS $ SHORTPOSITIONS

9 KEY SUPPORT (73.50-73.00)

13

USD INDEX

200-DMA(75.81)

DEMARK™ BUY SIGNALS

BREAKOUT ZONE

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

9 MONTHHIGH

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]










3


www.migbank.com

Sequence of false breaks adds to uncertainty.

GBP/USD has witnessed two failed breaks over recent sessions, which are

best viewed in the hourly timeframe. The initial fall under 1.5577 was

quickly reversed which led to a push over 1.5726. This failed to gainmomentum, seeing a return to the hourly range for the week.

As expected, 10 year Italian sovereign yields have found interim support

close to 5.750% and are now trading back above 6.000%. If this

deterioration continues then we can expect to see Sterling being adopted as

a safe haven again. This may help to explain why we have not broken out

of the week’s range yet, whereas, at the time of writing, most other

currencies are lower versus the USD from a weekly perspective.

We remain alert to the fact that we are nearing the base of the year longrange which, given the short-term relief seen in the Euro-Zone, may offer

opportunities to enter long positions.

Taking this approach will need to see levels closer to 1.5400 for a well

placed 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







4


www.migbank.com

Weakening beneath 78.24 (DeMark™ Level).

USD/JPY is still weak beneath 78.24 (DeMark™ Level). There is an ever

growing probability of unfolding a third price retracement back to pre-

intervention levels (PIR III) and potentially even a new post world war recordlow 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 above 80.00.


USD/JPY

USD/JPY daily, weekly chart, Bloomberg Finance LP

82.00

83.30

USD/JPY

QUAKESHOCK!

POST INTERVENTIONRETRACEMENT (PIR I)

POSTG7

MOVE (I)HIGH

PIR II

80.24

POSTBOJ

MOVE (II)HIGH

DEMARK™ BUY SIGNAL AHEADOF NEW POST WWII LOW 75.35

POSTBOJ

MOVE (III)HIGH

PIR III

MONTHLYDEMARK™

USD/JPY Weekly(2007 – 2011)

ENDINGDIAGONAL

PATTERNANTICIPATES

BREAKOUT(85-79)

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



5


www.migbank.com

Further downswing favoured to complete a larger correction.

USD/CHF has a short-term structure that is suggestive of a complete leg

higher from the 0.8568 low. This now acts to emphasise the 0.9331 high as

being pivotal to further gains. If a break above this level can be achieved,this will warn of a larger swing, to potentially target 0.9776.

However, given events elsewhere, the fall from 0.9331 to 0.9066 is likely the

first leg lower in a larger corrective phase which may be affected by a return

to rising yields in the core bond markets of the Euro-Zone.

With this in mind, we note that the respite that was offered to 10 year Italian

government bond yields following the USD based swap rate cut has likely

reached completion. The region near 5.750% has thus far acted as strong

support, warning of a return to 7.00% over coming weeks. If upsidepressure can be maintained in 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 sized

pullback during the last week, currently trading at 5.865% and 6.572%

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

(These same yields were trading at 5.405% and 5.924% respectively at the

same time yesterday.)


Await fresh signal.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP







6


www.migbank.com

Bulls rebound above 1.0200.

USD/CAD has triggered a sharp bullish rebound above 1.0200. We are

watching for further sustained price activity to open a buy trade setup.

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 1.0080 and parity unlocks bearish setbacks

into the long-term 200-day MA at 0.9864 and 0.9726 (31st

Aug low).

EUR/CAD is unwinding mildly ahead of the base of an important multi-

month distribution pattern. A break beneath 1.3393-79 (19th

Sept low/61.8%

Fib), signals an important breakdown into 1.3140 and would providesubstantial correlation pressure onto EUR/USD.

CHF/CAD, which serves as a proxy for “risk appetite”, remains weak

beneath its 200-day MA (which had provided support for most of the uptrend

since mid-2010). Key support now holds at 1.0893 (61.% Fib retrace). A

break here would extend the sharp decline into 1.0332 (01st

March low) and

help confirm further unwinding of global risk appetite.


Awaiting New Buy Trade Setup.


USD/CAD

USD/CAD daily, weekly charts, Bloomberg Finance LP

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

USD/CAD (Daily)

200-DMA0.9865

USD/CAD (Weekly)

CONFIRMATIONABOVE 1.0680

OPENSLARGER

RECOVERY

DEMARK™ BUY SIGNAL

MAJOR RESISTANCE

50% (1.3570)

61.8% (1.3379)

EUR/CAD (Daily)

200-DMA(1.3877)

REVERSALPATTERN

CHF/CAD (Daily)

50% (1.1488)

61.8% (1.0893)







7


www.migbank.com

Sharp setbacks beneath 200-day MA at 1.0405.

AUD/USD has triggered has triggered sharp setbacks beneath its 200-day

MA which is currently holding at 1.0405. This key level is likely to encourage

further downside scope over the multi-day-week horizon.

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/week horizon.

The Aussie dollar pairing back its mild recovery against the Japanese yen,

while holding 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 global risk appetite.


Sell stop 3: 1.0050, Obj: 0.9950/0.9660/0.9380, Stop: 1.0210.

AUD/USD


AUD/USD daily, weekly charts, Bloomberg Finance LP

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

KEYZONE

AUD/USD(1 YEAR)

DEMARK™ SELL SIGNALS

200-DMA1.0405

AUD/USD (Weekly)

38.2% (0.9144)

50% (0.8546)

61.8% (0.7947)

3 YEARUPTRENDIS UNDER

PRESSURE

STRUCTURALLEVEL

REVERSINGINTO

200-DMA

AUD/NZD(Daily)

KEY SUPPORT1.2319 / 1.2100

200-DMA

(82.47)

13

38.2% (76.70)

61.8% (68.47)

50% (72.58)

AUD/JPY(Daily)

DEMARK™ SELL SIGNAL

RESUMPTION OFBREAKDOWN

ADDS TORISK AVERSION







8


www.migbank.com

Rangebound trade continues.

GBP/JPY has a structure in the hourly timeframe similar to GBP/USD. Our

medium-term bias remains for a strong recovery given the longer-term

structure. However, the rise seen since 116.84 is deemed corrective in

nature suggesting scope for a return to 119.38 and then 116.84 in the near-

term.

As noted in prior reports, should this pair reach the 123.00 level a degree of

resistance would be anticipated. In the meantime, we remain wary of the

short-term range bound environment but are re-instating the sell strategy at

123.00.

If the recent range bound trade is resolved to the downside, then the 120.00

level should provide a degree of support, from where a further leg higher

would be favoured to develop.


Sell limit 3 at 123.00, Objs: 122.00/121.00/120.00, Stop: 124.00

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP







9


www.migbank.com

Minor short-term down-trend develops.

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 to maintain the stability of the Euro as a currency.

This acts as a manipulation of the market, making technical analytics

harder.

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, which has been followed by a short-term downswing in the hourly

timeframe that has been contained within the confines of a falling channel.

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.


Await fresh signal.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY







10


www.migbank.com

Above 0.8486 is suggestive of a larger corrective phase.

EUR/GBP saw a re-test of the 0.8486 level yesterday. While above 0.8486,

the entire structure seen since this same level is viewed as being corrective

in nature, with scope for a further recovery leg higher back to 0.8665 and

then potentially on to 0.8700, our favoured target zone. An earlier break

under 0.8486 may finally signal a breakdown of the prior long-term rising

trend, which is shown on the Daily chart to the left. However, we are wary

of breaks lower in any timeframe in EUR/GBP as they have proved hard to

sustain in recent weeks and months.

The message that we take away from the recent six party central bank

coordination is that there is a demand for US Dollars amongst European

banks. This fact is a warning sign and a clear weakness, suggesting scope

for a credit contractionary phase. 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.

Our bias remains mildly bearish and is supported by trade continuing under

both the 200 day and 50 week moving averages. As mentioned in prior

reports the 1.3146 level in EUR/USD remains key. A push under this level

will likely lead to weakness in all EUR crosses, as it will mark a breakdown

in confidence in the EUR and also end the rising trend that has been

witnessed since the 1.1876 low seen in the middle of 2010.


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








11


www.migbank.com

Fails again close to 1.2500 .

EUR/CHF has formed a sequence of lower highs close to the ceiling at

1.2500. We will maintain our sell limit strategy at 1.2480 for now as this

represents a decent trade location during thin Christmas markets. However,

we look to see if a break under 1.2226 can be achieved.

By using 1.2226 as a filter we will swap our current sell limit strategy to a

sell stop strategy at 1.2130, with objectives at 1.2030/1.1526/1.1002 and a

stop at 1.2230.

A rising sovereign yield environment may now be returning within the Euro-

Zone, as discussed in other parts of this report. We look to see if Italian 10

year sovereign yields can return to the 7.000% handle. It is these kinds of

pressures that may assist a return to and break of 1.2123/31. This

represents the real goal of a lasting breakdown in the recent range bound

structure.

The repeated 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








12


www.migbank.com

Remains negative beneath $1800.

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

Bears have also just recently marked a new lower high near our level at

$1760. Only a close above $1800 would help develop temporary recovery.

Near-term support can be found at $1667 (21 Nov low). Moreover, 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)


Sell Stop 3: 1705, Obj: 1605, 1530, 1300, Stop: 1750

GOLD

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


TRENDCHANNEL (12 YEARS)

I

RISK ZONE III

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

26%

34%

20%SO FAR

25%

II

COT NET LONGSPECULATORPOSITIONS

OVER 2 YEARS OFSIZEABLE LONG

GOLD POSITIONSUNDER THREAT

IF KEY LEVEL BREAKS

200-DMANOT BROKENIN 3 YEARS!

DEMARK™ SIGNAL WARNED OF GOLD’S OVERBOUGHTCONDITIONS

BREAKOUT

$1800

$1600

DOWNSIDE: $1600 / $1530

UPSIDE: 1760 / 1800

GOLD KEY TRIGGER LEVELS

$1532

DOUBLETOP

$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.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


www.migbank.com

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


BULLMARKET

FROM1999

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

13 YEAR LEVEL

UNWINDING 70% FROM

OVERSOLD TERRITORY

Gold/Silver "Mint" Ratio

KEYSUPPORT(26.0700)

DEMARK™ SELL SIGNALS

Silver (Daily)

200 DMA(36.9638)







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.

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/



Documents

2011 12 09 Migbank Daily Technical Analysis Report