2011 10-26 migbank-daily technical-analysis-report

DAILY TECHNICAL REPORT
26 October, 2011

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

S-TERM L-TERM STRATEGY/ ENTRY OBJECTIVES/COMMENTS STOP
MA MULTI-DAY MULTI-WEEK POSITION LEVEL

EUR/USD  
RK
GBP/USD  
Awaiting New Sell Trade Setup.

Await fresh signal.

ET
USD/JPY   Awaiting New Buy Trade Setup.

USD/CHF   Buy limit 3 0.8600 0.9000/0.9200/0.9316 0.8500

Ron William, CMT, MSTA USD/CAD   Buy Stop 3 1.0275 1.0660/1.0850/1.1110 1.0150

AUD/USD   Sell Stop 3 1.0330 0.9930/0.9620/0.9380 1.0510

GBP/JPY   Sell limit 3 123.15 121.60/118.50/116.50 124.40

EUR/JPY   Sell limit 3 107.90 106.90/104.00/100.00 109.00

EUR/GBP   Sell limit 3 0.8870 0.8750/0.8580/0.8400 0.8970
Bijoy Kar, CFA
EUR/CHF   Await fresh signal.

GOLD   Exited Final Unit of 1805 SHORT at 1704.

SILVER   Exited at 33.0550.
WINNER BEST SPECIALIST RESEARCH

DISCLAIMER &
DISCLOSURES
Please read the disclaimer and the
disclosures which can be found at 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
the end of this report 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 Broker14, rte des Gouttes d’Or CH-2008 Neuchâtel Switzerland
Tel +41 32 722 81 00 Fax +41 32 722 81 01 info@migbank.com www.migbank.com

EUR/USD DAILY TECHNICAL REPORT
EUR/USD 26 October, 2011

EUR/USD (Daily) BERMUDA TRIANGLE

FAILED
Resistance at 1.3937 is holding pressure.
BREAKOUTS

 EUR/USD’s short-term recovery (worth almost 6%) remains under pressure
below resistance at 1.3937 (which has not been breached on a close basis).
th th
 Bears need to break 1.3653 (18 Oct swing low) and 1.3550 (50% Fib-04
BIG LEVEL Oct swing), to challenge that all-important psychological level at 1.3000 and
(1.4000)
unlock further scope into 1.2860 (near 2011 low).
th
 Key resistance remains at 1.3937 (15 Sept high), which is near the
previous breakout zone at 1.4000 and the long-term 200-day MA at 1.4095.
200-DMA Only a confirmation above here will neutralise the status quo.
(1.4095) IMPULSIVE (WAVE 3)
TREND
2 YEARS
DECLINE TARGETS  Inversely, the USD Index is continuing to retrace (from its recent 6-month
(1.4030) 1.3000 & 1.2870
highs) and we expect support to hold at 75.80-55 for the next leg higher.
EUR/USD daily chart, Bloomberg Finance LP
 Speculative (net long) liquidity flows are temporarily unwinding from their
USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9% USD INDEX
CAD 9.1%, SEK 4.2%, CHF 3.6% (4 YEARS) recent spike highs (3 standard deviations from the yearly average). This will
remain strong and help resume the USD’s bull-run from its historic oversold
extremes (momentum, sentiment and liquidity).

+10%
+27% +19% SO FAR 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.”
BREAKOUT ZONE
DEMARK™
BUY SIGNAL
MIG Bank US Dollar Interview on Bloomberg

3 STD ABOVE
200-DMA ONE YEAR
(75.93) AVERAGE

TRIGGER
(15000)
+
13 KEY SUPPORT
DEMARK™ 9 (73.50-73.00)
EXTREME NET
COT LIQUIDITY US $ SHORT
BUY SIGNALS
- POSITIONS
S-T TREND L-T TREND STRATEGY
USD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP   Awaiting New Sell Trade Setup.

www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

2

GBP/USD 26 October, 2011

Under 1.5632 would turn bias bearish.

 GBP/USD is settling above the 38.2% retrace of the 1.6747-1.5272 fall. A
sustained break under 1.5632 is now required to increase the probability of
a lasting lower high near this key retrace.

200-day MA  Strategy is still hampered by a lack of reliable structure, largely due to the
range bound nature of the market in the medium-term time frame. Should
this continue then a larger recovery phase, back towards the 200 day
moving average would come back into focus. Remaining neutral is deemed
best for now.

 GBP/USD has already experienced a large devaluation versus the US
Dollar, therefore any further strengthening in the US Dollar may not see the
full participation of GBP/USD. Instead GBP/USD is favoured to remain
GBP/USD daily chart, Bloomberg Finance LP
stronger then most.

GBP/USD hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY
  Await signal.

www.migbank.com Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424

3

USD/JPY 26 October, 2011

USD/JPY
(Daily POST INTERVENTION
1 YEAR) RETRACEMENT (PIR I) USD/JPY still basing around its NEW all-time low.

 USD/JPY maintains a confluence of DeMark™ exhaustion bullish signals,
after yet another new post WWII record low which was carved out at 75.82.
QUAKE
SHOCK!
 These reversal signals are also following the second post intervention
83.30

POST
retracement in 2011, which is holding around a multi-week base pattern. It is
G7
MOVE also worth noting that our volatility measures remain very low and continue
HIGH
to favour a major breakout over the short-term horizon.
82.00
 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
POST
BOJ
MOVE of the preferred new structural bull-cycle into the all-important psychological
HIGH
level at 80.00, near 80.24 (post BOJ intervention II high).
80.24
 Keep in mind that such a scenario would help reactivate the longer-term
technical bias, including prior monthly DeMark™ exhaustion signals, within
USD/JPY Weekly ENDING PIR II the ending diagonal pattern, which was part of a major Elliott Wave cycle.
(2007 – 2011) DIAGONAL
Only a sustained weekly close below 76.25 will lead to a reassessment of
PATTERN
BREAKOUT DEMARK™ BUY SIGNAL the view and extend temporary weakness into 74.55.
AFTER NEW POST
TARGET WWII LOW (75.82)
(88-85) 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.
MONTHLY DEMARK
BUY SIGNAL

USD/JPY daily, weekly chart, Bloomberg Finance LP
  Awaiting New Buy Trade Setup.


4

USD/CHF 26 October, 2011

Lower high in place at 0.9083.

 USD/CHF appears to have printed a lower high at 0.9083 following the
recent break under 0.8881. While under 0.9123 a continuation of this
200-day MA
weakness is favoured.

 It is also noted that the current trading region is close to the location of the
50 week moving average, at 0.8949. Thus, a continuation of weakness
would also warn of a breakdown of the recent recovery structure. However,
back under 0.7712 is required to change the long-term bullish bias.

 The recent break lower also opens up the potential for a further extension
towards 0.8600, where a return to a bullish bias would become attractive
again.

USD/CHF daily chart, Bloomberg Finance LP

USD/CHF hourly chart, Bloomberg Finance LP
  Buy limit 3 at 0.8600, Objs: 0.9000/0.9200/0.9316, Stop: 0.8500


5

USD/CAD 26 October, 2011
USD/CAD (Daily) USD/CAD (Weekly)

August High Bullish reversal above psychological 1.0000 level.
(1.0673)

 USD/CAD has triggered a bullish reversal above the all-important 1.0000
level (psychological level and prior trading range).

 Positive momentum needs to push above 1.0264 and 1.0400 to extend the
200-DMA
CONFIRMATION recovery higher above the old resistance level at 1.0673 (August high &
(0.9811) ABOVE 1.0680
OPENS LARGER Congestion zone).
RECOVERY
 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.
DEMARK™
BUY SIGNAL  Meanwhile, only a sustained close beneath 1.0000 will extend bearish
setbacks into next the support level at 0.9750.
USD/CAD daily, weekly chart, Bloomberg Finance LP
MAJOR RESISTANCE
 Elsewhere, EUR/CAD is extending above its 200-day MA, within a large
CHF/CAD (Daily)
REVERSAL multi-month trading range. Key resistance continues to hold at 1.4379 (June
PATTERN
swing high), which has for some time marked a strong distribution pattern.

 CHF/CAD is retesting its support nearby the 200-day MA at 1.1248,
following the dramatic price slide lower (triggered by the SNB intervention).
The cross-rate has now retraced more than half of its 2011 gains.
50%
(1.3570)

61.8% 50%
(1.3379) 200-DMA (1.1488)
(1.3826)

61.8%
(1.0893)
200-DMA
(1.1261)

EUR/CAD (Daily) S-T TREND L-T TREND STRATEGY

EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP   Buy Stop 3: 1.0275, Objs:1.0660/1.0850/1.1110, Stop: 1.0150


6

AUD/USD 26 October, 2011
AUD/USD TD RISK AUD/USD
(1 YEAR) DEMARK™
(1.1102) (Weekly)
SELL SIGNALS
(1.0935)
Bearish reversal below its 200-day MA at 1.0371.

 AUD/USD has triggered a bearish reversal pattern back into the long-term
STRUCTURAL
LEVEL 200-day MA which is currently holding at 1.0371. Expect momentum to
38.2% unwind further into the rate’s psychological level at 1.0000.
(0.9144)
3 YEAR
UPTREND
50%  In terms of the big picture, AUD/USD’s multi-year uptrend remains under
(0.8546) IS UNDER
PRESSURE pressure since the previous breakdown. The bears need to confirm beneath
200-DMA
(1.0371) 61.8%
th
(0.7947) 0.9388 (04 Oct low & structural level) to unlock a much larger decline into
KEY
ZONE 0.9220 and 0.9144 (38.2% Fib-2008 uptrend).

 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.

AUD/USD daily, weekly chart, Bloomberg Finance LP  The Aussie dollar has stabilised against the Japanese yen, after failing into
AUD/JPY DEMARK™
AUD/NZD
(Daily) SELL SIGNAL
13 resistance at 79.92. Watch for a resumption of the major downtrend from
(Daily)
spring 2011. Strong downside scope will signal further unwinding of global
risk appetite.
200-DMA
CAPS
BEAR
MKT

38.2%
(76.70) 200-
DMA
50% (83.15)
(72.58)

61.8%
(68.47) BREAKDOWN
ADDS TO
RISK
AVERSION

KEY SUPPORT
1.2319 / 1.2100 S-T TREND L-T TREND STRATEGY

AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP   Sell Stop 3: 1.0330, Objs: 0.9930/0.9620/0.9380, Stop: 1.0510


7

GBP/JPY 26 October, 2011

Range bound short-term, favouring a return to 122.65.

 GBP/JPY saw a minor break under 120.34 which failed to hold, reaching
200-day MA 120.00. This is suggestive of the potential for a further recovery leg higher
to test the region near 123.00.

 The structure present since 116.84 is deemed corrective, with scope for a
final swing higher to complete this corrective phase. However, a sustained
push under the recent low at 120.00 will warn of resumption of weakness
back towards the floor near 117.00. However, an eventual return to
116.84/98 is expected, below which would open up an extension towards
115.00 immediately.

 A sustained break over 123.31 is required to change the current bearish
GBP/JPY daily chart, Bloomberg Finance LP
bias. Should this take place a larger corrective phase higher would then be
anticipated.

GBP/JPY hourly chart, Bloomberg Finance LP
  Sell limit 3 at 123.15, Objs: 121.60/118.50/116.50, Stop: 124.40


8

EUR/JPY 26 October, 2011

Consolidates above the 104.96/104.99 floor.

 EUR/JPY continues to range just above the 104.96/99 floor, following initial
support over the last few sessions. Provided this floor is not breached,
200-day MA scope is seen for a fresh swing higher to re-test the 107.68 level. However,
the larger structure present since 114.18 favours the formation of a lower
high close to 108.03, for a return to re-test 100.76.

 Failure to hold under 108.03 will warn of a larger recovery structure,
negating our medium-term bearish bias. Also, if a push over 108.03 can be
sustained this will bring into focus a potential false break lower out of a
falling channel in the daily timeframe.

 A move under the annual low would open up an extension to 97.50, ahead
of 92.80, levels not seen since 2000.
EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY hourly chart, Bloomberg Finance LP
  Sell limit 3 at 107.90, Objs: 106.90/104.00/100.00, Stop: 109.00


9

EUR/GBP 26 October, 2011

Further swing higher anticipated towards 0.8886/85.

 EUR/GBP continues to trade close to the 200 day moving average over
recent sessions. However, the bigger picture is dominated by the recent
failure to hold over the key high at 0.8672. Thus the rise from 0.8530 is
200-day MA viewed as being a corrective structure with scope for a lower high to form
closer to the old 0.8886/85 double top. So, although further short-term
strength may follow, supply is favoured to manifest near 0.8885.

 Should this move be realised, it would also take us close to the upper end of
the recent trading range. 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
EUR/GBP daily chart, Bloomberg Finance LP shown).

 A move back over 0.8960 is required to neutralise our mild bearish bias, in a
generally rangebound environment.

EUR/GBP hourly chart, Bloomberg Finance LP
  Sell limit 3 at 0.8870, Objs: 0.8750/0.8580/0.8400, Stop: 0.8970


10

EUR/CHF 26 October, 2011

Fails to garner momentum close to channel resistance.

200-day MA  EUR/CHF failed to garner momentum after meeting supply close to the
resistance of an hourly rising channel. The subsequent weakness is
currently testing the support of this same structure. A failure to find support
here would warn of a larger fall back down to the 1.2000 level.

 Although bullish for the time being, it is expected that the 1.2500-1.3000
zone may limit the current recovery phase from 1.0075. It is anticipated that
the market’s willingness to trade with the bias of the SNB may exhaust
should this trading region be met, as further gains in this cross are likely to
become more dependent on economic releases.

 A sustained move under 1.2024 will alter our near-term bullish bias.
EUR/CHF daily chart, Bloomberg Finance LP

S-T TREND L-T TREND
EUR/CHF hourly chart, Bloomberg Finance LP
  Await fresh trading signal.


11

GOLD 26 October, 2011
GOLD KEY TRIGGER LEVELS
DOWNSIDE: $1600 / $1530 UPSIDE: $1704 / $1844 RISK ZONE III
DOUBLE
Risk of a larger decline beneath $1530.
DEMARK™ SIGNAL
TOP
20%
WARNED OF GOLD’S
OVERBOUGHT SO FAR  Exited Final Unit of 1805 SHORT at 1704. Gold remains bearish after its
CONDITIONS
dramatic 20% price fall, which helped confirm the extreme overbought
conditions (marked by DeMark™ indicators). This also timed a key cycle
$1704
peak, ahead of that all-important $2000 glass-ceiling.

 Most concerning is that speculative (net long) flows have recently breached
$1600
34% a key downside level which may threaten over 2 years of sizeable long gold
$1532 positions.
200-DMA
BREAKOUT NOT BROKEN
IN 3 YEARS!
 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
26% long-term bull market in 1999.
CONFIRMATION BELOW $1530
UNLOCKS LARGER DECLINE  There is heightened risk of a much larger decline if we confirm a weekly
INTO $1300 & $1040-1000 close beneath $1600 and $1554-30 (200-day MA/swing low), which has not
TREND
CHANNEL been breached in 3 years!
(12 YEARS)
 A number of “bargain hunting” trend-followers will be watching this
COT NET LONG benchmark “line in the sand” for repeat support or a potential big squeeze
SPECULATOR
POSITIONS lower into $1300 and perhaps even $1040-1000. Remember, this would still
offer a unique buying opportunity in the near future.
I
25% Please select links for in-depth Gold coverage:
OVER 2 YEARS OF
Special Report “Gold’s mountainous peak at risk…beneath $1600” VIDEO
SIZEABLE LONG
GOLD POSITIONS MIG Bank Gold Interview on CNBC Squawk Box MIG Bank Gold Webinar video
UNDER THREAT (CNBC & BLOOMBERG REPORTS)
IF KEY LEVEL BREAKS
II
Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP
  SHORT 1: 1805, Obj: 1300. Stop: 1704

www.migbank.com
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
12

SILVER 26 October, 2011

Silver HITS 1980 Spike High! DEMARK™
SELL SIGNAL 13 Key support at $26.0700.
I  Exited at 33.0550. Silver’s latest price capitulation is a painful reminder to
Silver
DEMARK™
(Daily) SELL SIGNAL 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
II
200 DMA
(36.5125)
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.

KEY  Such a dramatic move traditionally produces volatile trading ranges. This
SUPPORT 38.2%
(26.0700) (32.3135) allows the market to have enough time to recover and accumulate renewed
buying interest.

Gold/Silver "Mint" Ratio 50%  Expect a large trading range to hold between $37.0000-26.0700 over the
(26.9150)
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-
61.8%
(21.5165)
term uptrend and help offer a potential buying opportunity for the eventual
resumption higher.
13 YEAR LEVEL
 Continue to watch the gold-silver “mint” ratio which has now accelerated
UNWINDING 67% FROM
OVERSOLD TERRITORY
higher by 67%, suggesting further risk aversion over the next few weeks.

OVER 30 YEAR BASE PATTERN
BULL
MARKET
FROM
1999
Silver Monthly (since 1980)
Spot Silver daily, weekly chart and Gold/Silver “mint” ratio, Bloomberg Finance LP
  Exited at 33.0550.


13

LEGAL DAILY TECHNICAL REPORT
TERMS 26 October, 2011

Limitation of liability

DISCLAIMER MIG BANK disclaims, without limitation, all liability for any loss or damage of any kind,
including any direct, indirect or consequential damages.

Material Interests
No information published constitutes a solicitation or offer, or recommendation, or advice, to MIG BANK and/or its board of directors, executive management and employees may have or
buy or sell any investment instrument, to effect any transactions, or to conclude any legal act have had interests or positions on, relevant securities.
of any kind whatsoever.

The information published and opinions expressed are provided by MIG BANK for personal
Copyright
use and for informational purposes only and are subject to change without notice. MIG BANK All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or
makes no representations (either expressed or implied) that the information and opinions distributed without the express permission of MIG BANK.
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 Notes: Entries are in 3 units and objectives are at 3 separate levels where 1
made solely based on the content. You should obtain advice from a qualified expert before unit will be exited. When the first objective (PT 1) has been hit the stop will be
making any investment decision. moved to the entry point for a near risk-free trade. When the second objective

All opinion is based upon sources that MIG BANK believes to be reliable but they have no (PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All
guarantees that this is the case. Therefore, whilst every effort is made to ensure that the orders are valid until the next report is published, or a trading strategy alert is
content is accurate and complete, MIG BANK makes no such claim. sent between reports.

www.migbank.com

14

CONTACT 26 October, 2011

Howard Friend Ron William MIG BANK 14, rte des Gouttes d’Or
www.migbank.com Bjioy Kar
Chief Market Strategist Technical Strategist info@migbank.com CH-2008 Neuchâtel
Technical Strategist
r.william@migbank.com www.migbank.com Tel.+41 32 722 81 00
h.friend@migbank.com b.kar@migbank.com 15

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2011 10-26 migbank-daily technical-analysis-report