2011 10-31 migbank-daily technical-analysis-report

DAILY TECHNICAL REPORT
31 October, 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 Sell Stop 3 1.3950 1.3840/1.3650/1.3470 1.4110

GBP/USD Buy limit 3 1.5840 1.5940/1.6153/1.6400 1.5740

USD/JPY Buy Stop 3 78.20 80.05/82.00/83.30 76.50

USD/CHF LONG 3 0.8600 0.9000/0.9200/0.9316 (Entered 28/10/2011) 0.8600

Ron William, CMT, MSTA USD/CAD Buy Stop 3 1.0050 1.0270/1.0660/1.0850 0.9890

AUD/USD Sell Stop 3 1.0570 1.0230/1.0010/0.9710 1.0750

GBP/JPY Await fresh signal.

EUR/JPY Await fresh signal.

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

GOLD Sell Stop 3 1710 1600/1530/1300 1760

SILVER Sell Stop 3 34.1300 29.9700/26.0700/23.3400 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 31 October, 2011

EUR/USD (Daily) BERMUDA FAILED
TRIANGLE BREAKOUTS Sharp reversal from key resistance.

EUR/USD has reversed sharply from key overhead resistance (including an
important 2 year trend-line) and pushed back into the 200-day MA
BREAKOUT
ZONE (1.4102).
(1.4000)

A close beneath the 200-day MA will warn of an emotionally charged bull-
trap and ultimately a further downside momentum through 1.3799 (26th
200-DMA
(1.4102) SHARP REVERSAL Oct low) and 1.3653 (18th Oct low), with scope into 1.3146 (Oct swing low).
FROM KEY
RESISTANCE Further pressure may weigh from broad risk-related proxies such as the
developed equity markets. The euro currently shares a high correlation of
UPTREND
(2 YEARS) 0.85% with the S&P500 which is now unwinding from new multi-week
highs.
EUR/USD daily chart, Bloomberg Finance LP
USD INDEX
Inversely, the USD Index has turned higher ahead support at 74.10 and
USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9%
CAD 9.1%, SEK 4.2%, CHF 3.6% (4 YEARS)
200-DMA 73.40. The bulls are likely to recapture the recent 6 month highs near 80.
(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)
KEY SUPPORT
+
DEMARK™ 13 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 Sell Stop 3: 1.3950, Obj: 1.3840/1.3650/1.3470, Stop: 1.4110

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

2

GBP/USD 31 October, 2011

Meets initial resistance close to the 200 day moving average.

GBP/USD has seen a return to test the 200 day moving average ahead of
the latest set back. However, structure from 1.5272 is suggestive of a
potential higher low versus 1.5632, for a return to 1.6153 and then higher
still.

We remain wary of the general range bound nature of this market in the
medium-term time frame.

While above 1.5632 a further leg higher is favoured. However, if this
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
GBP/USD daily chart, Bloomberg Finance LP 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 31 October, 2011

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

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
post WWII record low at 75.35.
G7
MOVE (I)
HIGH Multiple DeMark buy signals were also triggered within the multi-week
base pattern which has now broken higher (as had been expected by our
82.00
low volatility measures).
POST
BOJ The medium/long-term view is more bullish, favouring a sustained move
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
HIGH
USD/JPY Weekly ENDING PIR II
(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 DEMARK™ BUY SIGNAL AFTER ‐ High‐Probability Trading Strategies.
BUY SIGNAL NEW POST WWII LOW (75.35)

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


4

USD/CHF 31 October, 2011

Further recovery anticipated while above 0.8600.

Stop raised to entry.

USD/CHF continues to trade close to the 200 day moving average. Given
the structure of the fall from the recent high at 0.9316, a larger recovery is
now anticipated towards 0.9000 initially. However, failure to hold above
the entry level of the strategy below, at 0.8600, will warn of a larger fall to
the 0.8000 region.

In any case a further recovery leg higher is anticipated eventually.
Movement in USD/CHF is likely to be affected by the SNB attempting to
maintain EUR/CHF around 1.2200. However, back under 0.7712 is
required to change the long-term bullish bias.
USD/CHF daily chart, Bloomberg Finance LP A push back over 0.9083 is required to open up a return towards the
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: 0.9000/0.9200/0.9316, Stop: 0.8600


5

USD/CAD 31 October, 2011

USD/CAD (Daily) USD/CAD (Weekly)

Bears push back under the psychological 1.0000 level.
August High
(1.0673)

USD/CAD’s short-term price activity remains negative, as the bears push
back under the all-important psychological 1.0000 level (prior trading
range).

200-DMA
CONFIRMATION Only a sustained close beneath here will extend bearish setbacks into the
(0.9813)
ABOVE 1.0680
OPENS LARGER
long-term 200-day MA at 0.9813 and 0.9726 (31st Aug low). Only a close
RECOVERY beneath here will change the long-term positive view and encourage a sell
trade setup in our model portfolio.

Meanwhile, positive momentum needs to push above 1.0264 and 1.0400
DEMARK™ to rebuild the potential major upside reversal higher above the old
BUY SIGNAL
resistance level at 1.0673 (August high & Congestion zone).
USD/CAD daily, weekly chart, Bloomberg Finance LP
A strong directional confirmation above here will open a much larger
MAJOR RESISTANCE CHF/CAD (Daily)
REVERSAL recovery into 1.0850 plus. This would extend the upside breakout from the
PATTERN
rate’s ending triangle pattern, which was part of a major Elliott Wave cycle.

EUR/CAD is extending above its 200-day MA, within a large multi-month
trading range. Key resistance continues to hold at 1.4379 (June swing
high), which has for some time marked a strong distribution pattern.
50%
(1.3570) CHF/CAD is retesting its support nearby the 200-day MA at 1.1265,
61.8%
(1.3379) 200-DMA
50% following the dramatic price slide lower (triggered by the SNB
(1.1488)
(1.3833)
intervention). The cross-rate has now retraced more than half of its 2011
61.8%
(1.0893) gains.
200-DMA
(1.1275)

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

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


6

AUD/USD 31 October, 2011

AUD/USD AUD/USD
(1 YEAR) DEMARK™
SELL SIGNALS (Weekly) Resistance at 1.0765 caps explosive recovery.

AUD/USD’s explosive rally is currently unwinding from overbought
STRUCTURAL conditions, ahead key resistance at 1.0765 (01st Sept high).
LEVEL

38.2% This level is likely to cap gains back into the 200-day MA (1.0405) and
(0.9144)
3 YEAR
50%
UPTREND potentially resume downside pressure on the rate’s multi-year uptrend.
(0.8546) IS UNDER
PRESSURE
200-DMA The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18th
(1.0405) 61.8%
(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/NZD AUD/JPY DEMARK™
The Aussie dollar is also gaining further against the Japanese yen, after
13
(Daily) (Daily) SELL SIGNAL
spiking above the long-term 200-day MA which is currently at 83.12. Near-
term support continues to hold at 77.63 (18th Oct low). A break here will
200-DMA
CAPS resume downside scope into 76.70.
BEAR
MKT
38.2%
(76.70) 200-
DMA
50% (83.12)
(72.58)

61.8%
(68.47)

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

Sell Stop 3: 1.0550, Obj: 1.0230/1.0010/0.9710, Stop: 1.0750
AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP

7

GBP/JPY 31 October, 2011

Clear break over 123.31 suggests scope for a larger recovery.

Short exited.

GBP/JPY has been affected by the intervention last night of the BOJ in
USD/JPY. This has led to a breach above the key 123.31 level, which now
warns of a much larger corrective phase higher.

In fact a return towards 129.00/130.00 is now 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. Thus the region between 129.00
and 130.00 would be attractive for renewed short positioning.
GBP/JPY daily chart, Bloomberg Finance LP

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

Await fresh signal. Possibly looking to sell higher.


8

EUR/JPY 31 October, 2011

Breaks out of a falling channel.

Short exited.

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. Potential now
exists for a higher low to form versus 100.76 for a further recovery leg
higher.

This is further bolstered by the failure to remain below 108.03, which
opens up a return towards the 200 day moving average, currently at
112.67.

Should the region near 112.67 be met a lower high would be favoured to
form in that region. In the meantime, scope is seen for a higher low versus
EUR/JPY daily chart, Bloomberg Finance LP 104.75. Failure to maintain a foot hold over this level will negate
expectations of a return towards the 200 day moving average.

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


9

EUR/GBP 31 October, 2011

Returns to test the 200 day moving average.

EUR/GBP has returned to test the 200-day moving average, which is
currently at 0.8739.

As mentioned in prior reports the rise seen since 0.8530/0.8531 is viewed
as corrective, with a push back under 0.8670 required to negate the
possibility of a further squeeze higher to test the 0.8886/85 region.

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 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
Sell limit 3 at 0.8870, Objs: 0.8750/0.8580/0.8400, Stop: 0.8970


10

EUR/CHF 31 October, 2011

Breaks under the support of an hourly channel.

EUR/CHF failed to garner momentum after meeting supply close to the
resistance of an hourly rising channel and has subsequently fallen under
the support of this same structure. This now warns of a return to 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 taking place, this would warn of the end of the recovery seen since
1.0075, increasing the probability of a return to this level.

This also brings back into focus the 1.2500 – 1.3000 zone where resistance
was always anticipated.

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 31 October, 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.

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
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
Sell Stop 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 31 October, 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%
(26.9150)
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-
61.8%
(21.5165) term uptrend and help offer a potential buying opportunity for the

13 YEAR LEVEL eventual resumption higher.

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
Sell Stop 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 35.6880


13

LEGAL DAILY TECHNICAL REPORT
31 October, 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 31 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
h.friend@migbank.com r.william@migbank.com www.migbank.com Tel.+41 32 722 81 00
b.kar@migbank.com 15

2011 10-31 migbank-daily technical-analysis-report

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