2011 12 22 Migbank Daily Technical Analysis Report

8/3/2019 2011 12 22 Migbank Daily Technical Analysis Report

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MIG BANK / Forex Broker 14, rte des Gouttes dOr CH-2008 Neuchtel 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 Looking to sell.USD/CAD Awaiting new buy trade setup.AUD/USD Exited at 1.0050.GBP/JPY Await fresh signal.EUR/JPY Await new setup.EUR/GBP Sell limit 3 0.8425 0.8325/0.8142/0.8050 0.8525EUR/CHF Sell Stop 3 1.2130 1.2030/1.1526/1.1002 1.2230GOLD SHORT 2 1705 1530/1300 (Entered 12/12/2011) 1705SILVER SHORT 2 34.1300 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 REPORT22 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.


2/15

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Short-covering around the key 1.3000 level.

EUR/USD is unwinding mildly from oversold conditions, driven by short-

covering as the market adjusts to a new bearish paradigm, following the

break beneath that all-important psychological level at 1.3000.

Our cycle analysis successfully signalled increased volatility within the

first two weeks of December across risk proxies, including the equity

and commodity markets. Expect some respite ahead of the holiday

period.

Watch for a sustained close beneath 1.3000 (psychological level) to

resume EUR/USDs multi-month downtrend into 1.2870 (2011 major low).

Near-term resistance can be found at 1.3215 and potentially even 1.3550

(02 Dec high). Any rebound into these levels is likely to be short-lived.

Inversely, the USD Index has extended its recovery higher to new 11-

month highs, (a move worth over 10% from the summer 2010 lows).

Speculative (net long) liquidity flows are strengthening once again and will

continue to help resume the USDs 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 daily 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.pdfhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.youtube.com/watch?v=8JxLscMBUHY&feature=player_embeddedhttp://www.youtube.com/watch?v=8JxLscMBUHY&feature=player_embeddedhttp://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54http://www.bloomberg.com/video/75644864/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.bloomberg.com/video/75644864/http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54http://www.youtube.com/watch?v=8JxLscMBUHY&feature=player_embeddedhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdf


3/15

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Initial resistance seen close to 1.5770/80.

GBP/USD has tested the 1.5770/80 double top and met initial

resistance. This may highlight the price action seen since 1.5423 as

being corrective in nature, with a return to 1.5409 possible in the near-term.

Support for GBP/USD is anticipated given the negative structure that we

are also seeing in EUR/GBP. Thus a continuation to the downside in

EUR/GBP may be associated with the years range being maintained in

GBP/USD.

We continue to expect an eventual return to 7.000% in 10 year Italian

sovereign yields, which should support the arguements that we have

detailed above.

Failure to remain above 1.5423 will see an immediate target at 1.5272

and then potentially trend-line support at 1.5110.


Range bound trade likely t o persist near-term.

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
mailto:[email protected]:[email protected]:[email protected]:[email protected]


4/15

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Weakening beneath 78.24 (DeMark Level) .

USD/JPY is still weak beneath 78.24 (DeMark Level), as pricecontinues to hold within a multi-day trading range (see hourly chartbelow).

Confirmation beneath 77.25 (pivot level) would help trigger a third price

retracement back to pre-intervention levels and potentially even a new

post world war record low beneath 75.35.

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, within the end of this multi-year

contracting pattern (see top chart insert).

This may first 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 over the next few weeks, 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 VIDEO

Webinar: USD/JPYs Long-Term Structural Change

Media Reports: CNBC /Squawk Box &Bloomberg


Awaiting Renewed Buy Trade Setup above 80.00.


USD/JPY

USD/JPY hourly chart, Bloomberg Finance LP

USD/JPY daily chart, Bloomberg Finance LP
http://www.youtube.com/watch?v=rDHE6uEqm6whttp://www.youtube.com/watch?v=rDHE6uEqm6whttp://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21http://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21http://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21http://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21http://www.cnbc.com/id/45301945http://www.cnbc.com/id/45301945http://www.cnbc.com/id/45301945http://65.55.53.237/id/15840232?video=3000062126&play=1http://65.55.53.237/id/15840232?video=3000062126&play=1http://65.55.53.237/id/15840232?video=3000062126&play=1http://www.bloomberg.com/news/2011-11-24/dollar-may-rise-20-to-94-yen-on-elliot-wave-rebound-technical-analysis.htmlhttp://www.bloomberg.com/news/2011-11-24/dollar-may-rise-20-to-94-yen-on-elliot-wave-rebound-technical-analysis.htmlhttp://www.bloomberg.com/news/2011-11-24/dollar-may-rise-20-to-94-yen-on-elliot-wave-rebound-technical-analysis.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]://www.bloomberg.com/news/2011-11-24/dollar-may-rise-20-to-94-yen-on-elliot-wave-rebound-technical-analysis.htmlhttp://65.55.53.237/id/15840232?video=3000062126&play=1http://www.cnbc.com/id/45301945http://www.fxstreet.com/webinars/sessions/session.aspx?id=d77a35a0-4a11-44fa-a883-c95e01661d21http://www.youtube.com/watch?v=rDHE6uEqm6w


5/15

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A return to the 200 day moving average now favoured.

USD/CHF has weakened substantially after meeting resistance close to

0.9550. This initial bout of weakness may now mark the end of the

rising phase from 0.8568. A return back towards the 200 day movingaverage is possible from current levels.

The fate of USD/CHF is deemed to be tied to the direction of selected

core Euro-Zone yields and in particular the yield on Italian sovereign

debt. The yields on paper maturing in 6 years+ are all trading above

6%, with 5 year bonds just under 6.000%. It is anticipated that funding

pressure will return in the early part of next year. This is likely to exert

downside pressure on USD/CHF.

10 year yields in Spain and Italy are currently trading at 5.328% and

6.760% versus 6.478% and 7.355%, before the US Dollar based swap

agreement. Thus Spanish debt is experiencing a stronger positive

effect, in contrast to the Italian market. These yields were trading at

5.041% and 6.560% respectively yesterday.


Looking to sell.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP


6/15

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Unwinding from intraday resistance at 1.0425.

USD/CAD is unwinding sharply from intraday resistance at 1.0425, which

coincided with a short-term DeMark exhaustion signal.

We prefer to wait for a strong directional confirmation higher before

initiating a buy trade setup.

Until then, keep a watchful eye on support 1.0220. A sustained break

here would trigger further downside into 1.0000.

Meanwhile, the bulls need to push back above 1.0425 and 1.0524 (25

Nov swing high), in order to trigger a larger breakout from the rates multi-

month triangle pattern.

In terms of the big picture, a directional confirmation above 1.0680 is still

needed to unlock the recovery into 1.0850 plus. This would extend the

upside breakout from the rates ending triangle pattern, which was part of

a major Elliott wave cycle (see top chart insert).

EUR/CAD has breached the base of an important multi-month distribution

pattern. A sustained break beneath 1.3393-79 (19th

Sept low/61.8% Fib),

signals an important breakdown into 1.3140 and would provide

substantial correlation pressure onto EUR/USD.


Awaiting New Buy Trade Setup above 1.0425.Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

USD/CAD

USD/CAD daily chart, Bloomberg Finance LP

USD/CAD hourly chart, Bloomberg Finance LP


7/15

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Strong unwinding from oversold conditions.

AUD/USD is unwinding strongly from oversold conditions, which also

coincided with an intraday DeMark buy signal (see lower chart).

Although this recovery sharp, it is likely to be short-lived as signaled by

the DeMark signal. The bears must sustain below 1.0000 to further

compound downside pressure on the rates multi-year uptrend and push

back towards 0.9611.

Elsewhere, the Aussie continues to weaken sharply, against the New

Zealand dollar. Near-term price activity is mean reverting back into the

200-day MA and we watch for further setbacks over the multi-day/week

horizon.

The Aussie dollar is also 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.


Exited at 1.0050.

AUD/USD


AUD/USD daily chart, Bloomberg Finance LP

AUD/USD hourly chart, Bloomberg Finance LP


8/15

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Sustained over 122.23 suggests a fresh recovery leg higher.

GBP/JPY has broken over the resistance of a falling hourly channel.

Coupled with this we have seen a push over the 122.23 lower high. If

this rise can be sustained then a fresh leg higher will be favoured to

form for a swing all the way back to 127.32.

A break back over 122.98 will add to a more medium-term bullish

stance. A failure to do so will suggest that the recovery seen from the

116.84 low is corrective in nature. This suggests scope for a return to

119.38 and then potentially 116.84.

We do however note that for the majority of December a 120.33 -

122.64 range has been traded. A break out of this range is sought

ahead of strategy formulation.


Await fresh signal.

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP


9/15

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Continues to find support close to the 101.00 region.

EUR/JPY continues to meet support close to the 101.00 region after

basing at 101.05 recently.

The negative effects of the breakdown in EUR/USD remain a potentiallarge negative factor for this pair going forward, which warns of a re-test

of 100.76 and then possibly lower.

However, from a structural perspctive, the medium-term recovery that

we have already witnessed from 100.76 to 111.60 is viewed as the initial

leg higher in a larger recovery structure and thus, while trade is

maintained above 101.05, a further leg higher is favoured.

This clash between structure and event risk in the Euro-Zone keeps us

on the sidelines for now.

Sustained under 100.76 will warn of a much larger continuation to the

downside.


Await fresh signal.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY


10/15

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Finds initial support on bear channel support.

Sell level adjusted lower, with the appropriate changes made to the

objectives and stop.

EUR/GBP has found initial support after bouncing from daily channelsupport near the 0.8300 region. Scope is seen for a minor continuation

of the recovery higher. However, hourly structure remains bearish with

a lower high sought versus 0.8613 for a fresh swing to re-test 0.8303.

If a sustained break under 0.8303 can be realized then an extension

back to the 0.8068 0.8142 region would become viable. This view is

assisted by the recent push under 1.3146 in EUR/USD, which may act

to make EUR cross shorts easier to maintain.

Rising yields in the core Euro-Zone sovereign bond markets is a

continued concern and one that may destabilise the FX markets going

forward. Within this environment Sterling may well be judged the best of

a bad bunch and to a degree be seen as a short-term safe haven,

further adding to the potential for downside pressure ahead.


Sell limit 3 at 0.8425, Objs: 0.8325/0.8142/0.8050, Stop: 0.8525

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP daily chart, Bloomberg Finance LP

EUR/GBP



11/15

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Hourly structure warns of an extension lower.

EUR/CHF is developing a structure in the hourly timeframe which is

currently suggestive of a sizeable extension lower. If a break can be

realised under 1.2170 then stops under 1.2123/30 will become

vulnerable. If these are triggered, there may be sufficient momentum to

target the large cluster of stops that are expected under the 1.2000

region.

Despite some reasonable auctions in Spanish governments bonds, the

Italian 10 year sovereign yield remains elevated, with a re-test of the

7.000% level anticipated. A large tranche of rollover funding is expected

in the new year and growth is also likely to contract in Italy. Thus, there

is plenty of scope for the Swiss Franc to be sought once again as a safe

haven. The low yield available on Swiss Franc deposits is unlikely to

act as an impediment to it being sought as a safe haven.

As mentioned above, an initial breakout from the recent range has the

potential to trigger clustered stops which may add to downside

momentum. A failure to hold over the 1.2000 level will almost certainly

see a return to the larger downtrend.

S-T TREND L-T TREND

Sell stop 3 at 1.2130, Objs: 1.2030/1.1526/1.1002, Stop: 1.2230.

EUR/CHF daily and weekly charts, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP



12/15

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Gold re-testing its 200-day average.

Gold is temporarily re-testing its 200-day average, which was recently

broken for the first time in 3 years. The move was triggered by a multi-month

triangle pattern breakout (see both daily and intraday charts). Downside pressure remains heavy from inter-market weakness across

related risk proxies such as EUR/USD and equity markets. Moreover, there

is still heightened risk for a much larger decline if we confirm a weekly close

beneath $1600 and $1530 (swing low).

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 (12-year channelfloor/see

top chart insert).

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 into summer 2012.

Please select links for in-depth Gold coverage:

Special ReportGolds mountainous peak at riskbeneath $1600 VIDEO

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


SHORT 2: 1705, Objs: 1530, 1300, Stop: 1705

GOLD

Gold daily and weekly charts, Bloomberg Finance LP


Gold hourly chart, Bloomberg Finance LP
http://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdfhttp://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdfhttp://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdfhttp://www.youtube.com/watch?v=haKdlGKWyjQ&feature=player_embedded&list=PL953E96C7BE48D2FAhttp://www.youtube.com/watch?v=haKdlGKWyjQ&feature=player_embedded&list=PL953E96C7BE48D2FAhttp://www.bloomberg.com/video/78409176/http://www.bloomberg.com/video/78409176/http://video.cnbc.com/gallery/?video=3000042202http://www.fxstreet.com/webinars/sessions/session.aspx?id=8f81a2e3-e29b-4031-b370-a85149271145http://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.htmlhttp://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.htmlhttp://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.htmlhttp://www.cnbc.com/id/44310840http://www.cnbc.com/id/44310840http://www.cnbc.com/id/44310840mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.cnbc.com/id/44310840http://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.htmlhttp://www.fxstreet.com/webinars/sessions/session.aspx?id=8f81a2e3-e29b-4031-b370-a85149271145http://video.cnbc.com/gallery/?video=3000042202http://www.bloomberg.com/video/78409176/http://www.youtube.com/watch?v=haKdlGKWyjQ&feature=player_embedded&list=PL953E96C7BE48D2FAhttp://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdf


13/15

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Weak bounce retesting $30.0000.

Silvers weak recovery from oversold conditions is retesting 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

silvers long-term uptrend and help offer a potential buying opportunity for

the eventual resumption higher.

Continue to watch the gold-silver mint ratio (see top chart insert) 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 2: 34.1300, Objs: 26.0700/23.3400, Stop: 34.1300

SILVER

Spot Silver hourly chart, Bloomberg Finance LP


Spot Silver daily chart, Bloomberg Finance LP


14/15

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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.

DISCLAIMERNo 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


15/15

15


www.migbank.comRon WilliamTechnical [email protected]

MIG [email protected]

14, rte des Gouttes dOrCH-2008 NeuchtelTel.+41 32 722 81 00

Bjioy KarTechnical [email protected]

CONTACT

Howard FriendChief Market [email protected]
mailto:[email protected]:[email protected]://www.migbank.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.migbank.com/mailto:[email protected]:[email protected]

2011 12 22 Migbank Daily Technical Analysis Report

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Transcript of 2011 12 22 Migbank Daily Technical Analysis Report