2011 11-02 migbank-daily technical-analysis-report

DAILY TECHNICAL REPORT
02 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 1 1.3950 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 LONG 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
Ron William, CMT, MSTA
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.
Bijoy Kar, CFA
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
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 Broker 14, 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 02 November, 2011

EUR/USD (Daily) BERMUDA
TRIANGLE FAILED
BREAKOUTS Sharp reversal targets 1.3000.

EUR/USD has extended its sharp reversal from key overhead resistance
(primarily an important 2 year trend-line). The dramatic move has
BREAKOUT
ZONE confirmed the emotionally charged bull-trap that we had anticipated,
(1.4000)
which had been driven by recent positive EU News.
Key support is now holding at 1.3653 (18th Oct low). A sustained
200-DMA
(1.4102) SHARP REVERSAL confirmation beneath here will unlock further downside scope into 1.3146
AT KEY RESISTANCE (Oct swing low) and that all-important psychological level at 1.3000.
TARGETS 1.3000 & 1.2870
Further pressure is also weighing from broad risk-related proxies. The euro
UPTREND
(2 YEARS)
currently shares a high correlation of 0.85% with the S&P500 which is now
falling sharply from its recent multi-week highs.

EUR/USD daily chart, Bloomberg Finance LP Inversely, USD Index has turned back higher above its long-term 200-day
USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9% USD INDEX
CAD 9.1%, SEK 4.2%, CHF 3.6% (4 YEARS) MA. The bulls are likely to recapture the recent 6-month highs near 80.
200-DMA
(75.74)
Speculative (net long) liquidity flows are holding steady around their recent
spike highs (3 standard deviations from the yearly average). This will likely
+10% remain strong and help resume the USD’s major bull-run from its historic
+27% +19% SO FAR
oversold extremes (momentum, sentiment and liquidity).

BREAKOUT ZONE
DEMARK™
BUY SIGNAL
Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410. VIDEO
3 STD ABOVE
MIG Bank Webinar: “Why the US dollar is likely to gain up to 30% in 6‐12 months.”
ONE YEAR
AVERAGE MIG Bank US Dollar Interview on Bloomberg
TRIGGER
(15000)
+
DEMARK™ 13 9 KEY SUPPORT EXTREME NET
(73.50-73.00) 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 SHORT 1: 1.3950, Obj: 1.3470, Stop: 1.3840

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

2

GBP/USD 02 November, 2011

Higher low sought for a return to 1.6167.

A break back over the 1.6167 high would lead us to remove the strategy
below from the report.

GBP/USD has found initial support at 1.5890 following the bout of
weakness seen from the 200 day moving average. While contained within
the 1.5890-1.6167 range a further swing lower remains feasible, towards
our target zone near 1.5840, where a higher low is favoured to form.

We remain wary of the general range bound nature of this market in the
medium-term and note that short-term structure is suggestive of further
gains, back towards 1.6167.

While above 1.5632 a further leg higher is favoured. However, if this
GBP/USD daily chart, Bloomberg Finance LP 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.

GBP/USD hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY
Buy limit 3 at 1.5840, Objs: 1.5940/1.6153/1.6400, Stop: 1.5740.

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

3

USD/JPY 02 November, 2011

USD/JPY POST INTERVENTION
(Daily
RETRACEMENT (PIR I) USD/JPY intervention favours test of 80.00.
1 YEAR)

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
QUAKE
SHOCK! officially intervene on the rate this year, after it carved out yet another new
83.30 post WWII record low at 75.35.
POST
G7
MOVE (I) Multiple DeMark buy signals were also triggered within the multi-week
HIGH
base pattern which has now broken higher (as had been expected by our
82.00
low volatility measures).

POST The medium/long-term view is more bullish, favouring a sustained move
BOJ
MOVE (II)
HIGH above our initial upside trigger level at 80.00, near 80.24 (post BOJ

80.24
intervention II high).

POST Keep in mind that such a scenario would help reactivate the longer-term
BOJ
MOVE (III) technical bias, including prior monthly DeMark™ exhaustion signals, within
USD/JPY Weekly ENDING PIR II
HIGH
(2007 – 2011) DIAGONAL the ending diagonal pattern, which was part of a major Elliott Wave cycle.
PATTERN Only a sustained weekly close below 76.25 will lead to a reassessment of
BREAKOUT
TARGET the view and extend temporary weakness into 74.55.
(85-79)
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.
MONTHLY DEMARK™ ‐ High‐Probability Trading Strategies.
BUY SIGNAL DEMARK™ BUY SIGNAL AFTER
NEW POST WWII LOW (75.35)

USD/JPY daily, weekly chart, Bloomberg Finance LP
LONG at 78.20, Obj: 80.05/82.00/83.30, Stop: 76.50


4

USD/CHF 02 November, 2011

Meets initial resistance at 0.8960.

USD/CHF saw a further squeeze higher to test the region close to 0.9000,
reaching 0.8960 so far. Scope is seen for a further rise to test the 0.9000
level, however a degree of resistance would be expected there, which may
then signal the resumption of a fresh swing to the downside.

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 above 1.2000. 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
USD/CHF daily chart, Bloomberg Finance LP recent high at 0.9316.

USD/CHF hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY

Long 3 at 0.8600, Objs: All three to 0.9000, Stop: 0.8800


5

USD/CAD 02 November, 2011

USD/CAD (Daily) USD/CAD (Weekly)
Bulls reverse higher from psychological 1.0000 level.
August High
(1.0673)
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
200-DMA CONFIRMATION
potential major upside reversal higher above the old resistance level at
(0.9815) ABOVE 1.0680 1.0673 (August high & Congestion zone).
OPENS LARGER
RECOVERY
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
DEMARK™
BUY SIGNAL 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.
USD/CAD daily, weekly chart, Bloomberg Finance LP
CHF/CAD (Daily) EUR/CAD is extending above its 200-day MA, within a large multi-month
REVERSAL
PATTERN 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

50%
intervention). The cross-rate has now retraced more than half of its 2011
(1.3570)
gains.
61.8% 50%
(1.3379) 200-DMA (1.1488)
(1.3833)

61.8%
(1.0893)
200-DMA
(1.1875)

EUR/CAD (Daily)

EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP LONG 3: 1.0050, Objs:1.0270/1.0660/1.0850, Stop: 0.9890


6

AUD/USD 02 November, 2011

AUD/USD AUD/USD
DEMARK™
(1 YEAR)
SELL SIGNALS (Weekly) Sharp setbacks weigh.
AUD/USD’s sharp setbacks continue to weigh. The move was triggered
from key resistance at 1.0765 (01st Sept high) and is now holding beneath
STRUCTURAL
LEVEL the 200-day MA (1.0407).
38.2%
(0.9144) A sustained move below here is likely to mount downside pressure on the
3 YEAR
50% UPTREND rate’s multi-year uptrend.
(0.8546) IS UNDER
200-DMA PRESSURE
(1.0407) 61.8% The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18th
(0.7947)
KEY Oct low). A break here will unlock sharp setbacks into 1.0000.
ZONE

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
AUD/JPY
AUD/NZD
(Daily)
DEMARK™
SELL SIGNAL
13 The Aussie dollar has reversed gains against the Japanese yen and is now
(Daily)
trading back below the long-term 200-day MA which is currently at 83.11.

200-DMA
Near-term support continues to hold at 77.63 (18th Oct low). A break here
CAPS
BEAR will resume downside scope into 76.70 and signal further unwinding of risk
MKT
38.2% appetite.
(76.70)
200-
DMA
50% (83.12)
(72.58)

61.8% RESUMPTION OF
(68.47)
BREAKDOWN
ADDS TO
RISK AVERSION

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

SHORT 3: 1.0570, Obj: 1.0230/1.0010/0.9710, Stop: 1.0750
AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP

7

GBP/JPY 02 November, 2011

Short-term a return towards 122.65 is favoured.

GBP/JPY has entered into a period of consolidation following the
intervention by the BOJ in USD/JPY at the start of the week. This has led
to a breach above the key 123.31 level, which now warns of a much larger
corrective phase higher. However, given the nature of the upside surge, a
return to the 122.65 region is favoured ahead of further strength.

Bigger picture a further rise towards 129.00/130.00 is 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, near the 200 day moving average
GBP/JPY daily chart, Bloomberg Finance LP which is currently at 128.89. 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, with a short-term
swing back into the 129.00-130.00 region in mind.

GBP/JPY hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY

Buy limit 3 at 122.70, Objs: 124.10/126.00/127.32, Stop: 121.30


8

EUR/JPY 02 November, 2011

Possible symmetric correction complete at 111.60.

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. However, we
also note that the rise to 111.60 may eqaute to the completion of a
symmetric correction from 100.76, thus warning of a return to weakness.

Further price action needs to be monitored to try to determine a near-term
bias, with the current stance being neutral.

Should the region near 112.50 be met a lower high would be favoured to
form in that region, close to the 200 day moving average, currently at
112.62.

A sustained hold over the 200 day moving average will turn the outlook
EUR/JPY daily chart, Bloomberg Finance LP bullish. In the meantime a mild bearish bias remains in place.

EUR/JPY hourly chart, Bloomberg Finance LP
Await fresh signal.


9

EUR/GBP 02 November, 2011

Poor trade loaction keeps us on the sidelines.

EUR/GBP saw a push back under 0.8670 in recent trade which now likely
leaves a lower high at 0.8831, very close to the region in which we
expected weakness to manifest, near the old double top at 0.8886/85.

The bias remains mildly bearish, although trade location remains poor with
a return back towards 0.8831 offering better opportunities. Alternatively,
we await a clear break under the 0.8530/31 double bottom to realize a
breakout from the 0.8530-0.8886 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 shown).
EUR/GBP daily chart, Bloomberg Finance LP 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
Look to sell higher.


10

EUR/CHF 02 November, 2011

Tight range holds under 1.2200.

EUR/CHF has entered into a tight consolidation range just under the
1.2200 level, testing the resolve of the SNB to defend levels higher than
1.2000. Failure to hold within the confines of the earlier hourly rising
channel also warns of a return towards 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 brings back into focus the 1.2500 – 1.3000 zone where resistance was
always anticipated. Also noted is the failure to maintain trade above the

EUR/CHF daily chart, Bloomberg Finance LP 200 day moving average.

Given the sustained push over 6% in 10 year Italian government bond
yields, the question arises as to whether or not the SNB will be able to
hold back the possible flow of funds into Swiss Francs that may occur if
further stresses lead to yet higher yields in Italian government bonds.

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


11

GOLD 02 November, 2011
GOLD KEY TRIGGER LEVELS
DOWNSIDE: $1600 / $1530 UPSIDE: $1760 / $1844 RISK ZONE III
DOUBLE
Risk of a larger decline beneath $1530.
DEMARK™ SIGNAL
TOP
20%
WARNED OF GOLD’S
OVERBOUGHT SO FAR Gold remains bearish after its dramatic 20% price fall, which helped
CONDITIONS
confirm the extreme overbought conditions (marked by DeMark™
$1760
indicators). This also timed a key cycle peak, ahead of that all-important
$1704
$2000 glass-ceiling.

$1600
Most concerning is that speculative (net long) flows have recently breached
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
TREND close beneath $1600 and $1554-30 (200-day MA/swing low), which has not
CHANNEL been breached in 3 years!
(12 YEARS)

A number of “bargain hunting” trend-followers will be watching this
COT NET LONG
SPECULATOR
benchmark “line in the sand” for repeat support or a potential big squeeze
POSITIONS
lower into $1300 and perhaps even $1040-1000. Remember, this would
still offer a unique buying opportunity in the near future.
I
25%
OVER 2 YEARS OF Please select links for in-depth Gold coverage:
SIZEABLE LONG
Special Report “Gold’s mountainous peak at risk…beneath $1600” VIDEO
GOLD POSITIONS
UNDER THREAT MIG Bank Gold Interview on CNBC Squawk Box MIG Bank Gold Webinar video
IF KEY LEVEL BREAKS (CNBC & BLOOMBERG REPORTS)
II
Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP
SHORT 3: 1710, Obj: 1600/1530/1300, Stop: 1760

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

SILVER 02 November, 2011

Silver HITS 1980 Spike High! DEMARK™
SELL SIGNAL 13 Key support at $26.0700.
Silver (Daily) I
DEMARK™ Silver’s latest price capitulation is a painful reminder to the investment
SELL SIGNALS
community that lightning can strike twice. Note, this marks the second
time silver has crashed, following its 30% fall last April.

200 DMA
The move was triggered following a DeMark™ exhaustion sell signal and
(36.5125) II
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
SUPPORT Such a dramatic move traditionally produces volatile trading ranges. This
(26.0700) 38.2%
(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

UNWINDING 67% FROM Continue to watch the gold-silver “mint” ratio which has now accelerated
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
SHORT 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 35.6880


13

LEGAL DAILY TECHNICAL REPORT
02 November, 2011
TERMS
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, MIG BANK and/or its board of directors, executive management and employees may have
to buy or sell any investment instrument, to effect any transactions, or to conclude any legal or have had interests or positions on, relevant securities.
act of any kind whatsoever.
Copyright
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 All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or
BANK makes no representations (either expressed or implied) that the information and distributed without the express permission of MIG BANK.
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 Notes: Entries are in 3 units and objectives are at 3 separate levels where 1
decisions be made solely based on the content. You should obtain advice from a qualified unit will be exited. When the first objective (PT 1) has been hit the stop will be
expert before 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 02 November, 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
h.friend@migbank.com r.william@migbank.com www.migbank.com Tel.+41 32 722 81 00
b.kar@migbank.com 15

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2011 11-02 migbank-daily technical-analysis-report