DAILY TECHNICAL REPORT 11 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 Awaiting New Sell Trade Setup.
GBP/USD Await fresh signal.
USD/JPY LONG 3 77.20 80.20/81.50/83.30 (Entered 25/08/2011) 75.90
USD/CHF LONG 2 0.8905 0.9110/0.9600 (Entered 21/09/2011) 0.8995
USD/CAD LONG 3 1.0390 1.0670/1.0880/1.1130 (Entered 30/09/2011) 1.0210
AUD/USD Sell Stop 3 0.9905 0.9380/0.9000/0.8770 1.0100
GBP/JPY Possibly looking to sell higher.
EUR/JPY SHORT 3 104.50 103.90/100.70/97.50 105.10
EUR/GBP Await fresh signal.
EUR/CHF Buy limit 3 1.2180 1.2260/1.2344/1.2500 1.2100
GOLD SHORT 1 1805 Lowered Objective 1300 (Entered 12/09/2011) 1704
SILVER Await New Sell Trade Setup
Ron William, CMT, MSTA
Bijoy Kar, CFA
WINNER BEST SPECIALIST RESEARCH
DISCLAIMER & DISCLOSURES Please read the disclaimer and the disclosures which can be found at the end of this report
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.
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
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DAILY TECHNICAL REPORT 11 October, 2011
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Resistance caps bounce at 1.3690.
EUR/USD’s bearish (wave 3) impulsive slide has retraced over half of its
uptrend (taken from June 2010). Short-term price activity is unwinding
from oversold conditions and has recently broken above the multi-week
channel.
Key resistance is likely to cap any potential oversold bounces around
1.3690 (28th Sept high) and 1.3797 (22nd Sept high), then 1.3937 (15th Sept
high), which is near the previous breakout zone at 1.4000.
The bears still need to confirm a meaningful breakout beneath that all-
important psychological level at 1.3000 to unlock further scope into 1.2860
and much lower.
Inversely, the US dollar remains strong (as most other popular “risk”
markets weaken from overcrowded uptrends). Having said that, short price
activity is unwinding sharply ahead of the key level at 80.00.
Speculative (net long) liquidity flows have also spiked above our trigger
level of 15000 contracts (which is 3 standard deviations from the yearly
average). This will help sustain the bull-run from 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.”
S-T TREND L-T TREND STRATEGY
Awaiting New Sell Trade Setup.
EUR/USD
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
EUR/USD
EUR/USD daily chart, Bloomberg Finance LP
US Dollar Index daily & weekly chart, with COT liquidity, Bloomberg Finance LP
IMPULSIVE (WAVE 3)DECLINE TARGETS
1.3000 & 1.2870 TREND2 YEARS (1.3960)
200-DMA (1.4056)
EUR/USD (Daily)
BIG LEVEL
(1.4000)
BERMUDA TRIANGLE
BREAKOUTS FAILED
+
-
US$ INDEX (4 YEARS)
DEMARK™BUY SIGNAL
+27% +19%
TRIGGER (15000)
COT LIQUIDITY9 KEY 13 SUPPORT (73.50-73.00)
US DOLLAR INDEX (Daily – 2 years)
200-DMA (76.00)
DEMARK™ BUY SIGNALS
RECOVERY TARGETS
80.00
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DAILY TECHNICAL REPORT 11 October, 2011
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Flat correction possibly reaching completion.
GBP/USD has recovered well after meeting 1.5272 last week, in what is
potentially a flat corrective phase that originated at 1.5328. Scope is now
seen for a lower high to form for a resumption of weakness.
However, if a sustained push over 1.5716 can be realised, this will renew
scope of a further push higher towards the 200 day moving average,
currently near 1.6130.
It is anticipated that any further strengthening in the US Dollar may not see
the full participation of GBP/USD. Instead GBP/USD is favoured to remain
stronger then most, as displayed in crosses like GBP/AUD, which appears
to be exhibiting signs of a longer-term bullish reversal. (See our GBP/AUD
special focus here).
S-T TREND L-T TREND STRATEGY
Await 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
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DAILY TECHNICAL REPORT 11 October, 2011
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Basing around the all-time low.
USD/JPY is maintaining a confluence of DeMark™ exhaustion bullish
signals, after the new post WWII record low which was carved out at 75.95.
The reversal signals are also taking place following the second post
intervention retracement in 2011, which is holding around a multi-day base
pattern support, near 76.30-25.
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 of the preferred new structural bull-cycle into the all-important
psychological level at 80.00, near 80.24 (post BOJ intervention II high).
Keep in mind that such a scenario would help reactivate the longer-term
technical bias, including prior monthly DeMark™ exhaustion signals, within
the ending diagonal pattern, which was part of a major Elliott Wave cycle.
Only a sustained weekly close below here and 76.25 will lead to a
reassessment of the view and extend temporary weakness into 74.55.
S-T TREND L-T TREND STRATEGY
Long 3 at 77.20, Obj: 80.20/81.50/83.30, Stop: 75.90
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 426
USD/JPY
USD/JPY daily and weekly charts, Bloomberg Finance LP
WAVE 5
83.30
USD/JPY (Daily 1 YEAR)
QUAKE SHOCK!
POST INTERVENTION RETRACEMENT (PIR I)
POST G7
MOVE HIGH
82.00
PIR II
80.24
POST BOJ
MOVE HIGH
DEMARK™ BUY SIGNAL AFTER NEW POST WWII LOW (75.95)
MONTHLY DEMARK BUY SIGNAL
USD/JPY Weekly (2007 – 2011)
ENDING DIAGONAL
PATTERN
(88-85
BREAKOUT TARGET
)
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DAILY TECHNICAL REPORT 11 October, 2011
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Finds initial support at the base of an hourly rising channel.
Stop raised to 0.8995. First target adjusted to 0.9110.
USD/CHF saw a substantial corrective phase lower yesterday, testing the
base of an hourly channel formation, where a degree of support is
currently evident. We would view a break under 0.9003 as bearish with an
increased probability of a further extension lower.
The 50 week moving average, currently at 0.8966, remains key, with a
failure to hold above this measure warning of renewed weakness.
Longer-term a return towards parity is anticipated and potentially higher.
Back under 0.7712 is required to change this long-term bullish bias.
S-T TREND L-T TREND STRATEGY
Long 2 at 0.8905, Objs: 0.9110/0.9600, Stop: 0.8995.
USD/CHF hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
USD/CHF
USD/CHF daily chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 11 October, 2011
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Sharp correction holding within previous range.
USD/CAD’s latest sharp correction is pushing lower within last Friday’s
trading range. Our long position in the model portfolio continues to favour
a resumption higher above the resistance level at 1.0673 and 1.0880.
Meanwhile, only a sustained close beneath 1.0200 will extend setbacks
into 1.0000 (psychological level and prior trading range).
Elsewhere, 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.
CHF/CAD is retesting its support nearby the 200-day MA at 1.0932,
following the dramatic price slide lower (triggered by the SNB
intervention). The cross-rate has now retraced more than half of its 2011
gains.
S-T TREND L-T TREND STRATEGY
LONG 3: 1.0390, Objs: 1.0670/1.0880/1.1130, Stop: 1.0210
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
USD/CAD
USD/CAD daily chart, Bloomberg Finance LP
EURCAD and CHFCAD daily charts, Bloomberg Finance LP
USD/CAD (Weekly)
BULLISHRECOVERY
TARGETS1.0850
DEMARK™ BUY SIGNAL
USD/CAD (Daily)
MAJOR LOW
(0.9446)
200-DMA(0.9784)
August High (1.0673)
MAJOR RESISTANCE
200-DMA (1.3769)
EUR/CAD (Daily)
50% (1.3570)
61.8% (1.3379)
REVERSAL PATTERN
CHF/CAD (Daily)
200-DMA (1.0932)
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DAILY TECHNICAL REPORT 11 October, 2011
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Key resistance zone caps bounce at 1.0000.
AUD/USD’s key resistance zone has capped the recent oversold bounce
around 1.0000. Meanwhile, the medium-term downtrend remains bearish
and favours a resumption back into 0.9388 (04th Oct low) and 0.9220.
Only a sustained break above 1.0000 (psychological-pivot level) will extend
the rate’s short-term recovery higher into next resistance at 1.0200.
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.
The Aussie dollar also continues to weaken against the Japanese yen,
resuming the pattern breakout and now targets 72.58 (50% Fib-bull market
from 2008). The move reinforces current risk aversion in the global financial
community.
S-T TREND L-T TREND STRATEGY
Sell Stop 3: 0.9905, Obj: 0.9380, 0.9000, 0.8770, Stop: 1.0100
AUD/USD
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
AUD/NZD and AUD/JPY daily charts, Bloomberg Finance LP
AUD/USD daily chart, Bloomberg Finance LP
200-DMA CAPS BEAR MKT
AUD/NZD (Daily)
KEY SUPPORT 1.2319 / 1.2100
13
38.2% (76.70)
50% (72.58)
D/JPY (Daily)
DEMARK™
61.8% (68.47)
AUSELL SIGNAL
BREAKDOWN
200-DMA
(83.56)
ADDS TORISK
AVERSION
AUD/USD (1 YEAR)
TD RISK(1.0935)
TD RISK(1.1102) DEMARK™
SIGNALS SELL
200-DMA (1.0391) KEY ZONE
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DAILY TECHNICAL REPORT 11 October, 2011
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Lower high sought for a return to 116.98.
GBP/JPY appears to be in the process of completing a corrective phase
from 116.84 after finding support last week at 116.98. However, it is
anticipated that gains will be limited to the region between 120.85 and
123.31, where a lower high would be favoured to form.
A failure to hold above 116.84/98 will suggest the end to recovery
potential, with a resumption towards 115.00 then favoured.
A push under 119.09 in the hourly timeframe will begin to break down the
bullish structure seen from 116.98, increasing the probability that a fresh
downswing has begun.
S-T TREND L-T TREND STRATEGY
Possibly looking to sell higher.
GBP/JPY
GBP/JPY daily chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
GBP/JPY hourly chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 11 October, 2011
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Lower high sought for a fresh downswing.
First objective raised to 103.90, Stop adjusted to 105.10.
EUR/JPY saw a minor break out a rising hourly channel yesterday. If this
break fails to hold a fresh swing to the downside will become more likely
over coming sessions.
With this in mind, a lower high is sought for a return towards 100.76
initially. Under the annual low would then open up an extension to 97.50,
ahead of 92.80, levels not seen since 2000.
In order to negate the medium-term bearish bias, we require a sustained
push back over 108.03.
S-T TREND L-T TREND STRATEGY
Short 3 at 104.50, Objs: 103.90/100.70/97.50, Stop: 105.10.
EUR/JPY hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
EUR/JPY daily chart, Bloomberg Finance LP
EUR/JPY
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DAILY TECHNICAL REPORT 11 October, 2011
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Returns to trade close to the 200 day moving average.
EUR/GBP has returned to trade close to the 200 day moving average, after
failing to close under daily trend-line support in recent sessions. The
inclination remains to look for a return to weakness given the break down
in longer-term structure. In particular, we note the push under 0.8672
which has met 0.8530 so far.
With the above in mind, an eventual break under 0.8530 is favoured and is
currently viewed as the best trigger for strategy formulation.
As noted in prior reports a return to range bound trade is possible, similar
to the period between 2003 and 2007 (not shown).
S-T TREND L-T TREND STRATEGY
Short stopped. Await fresh signal.
EUR/GBP hourly chart, Bloomberg Finance LP
EUR/GBP daily chart, Bloomberg Finance LP
EUR/GBP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 11 October, 2011
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Weakness follows re-test of channel resistance.
Long strategy entry raised to 1.2180 and first objective to 1.2260.
EUR/CHF continues to be contained by an hourly rising channel, with the
latest phase lower following a second failed attempt at breaking over
hourly channel resistance. This structure is also currently managing to
keep trade above the 200 day moving average.
An eventual test of the 50 week moving average (currently at 1.2475) is
anticipated.
It is also noted that price is approaching the 1.2500-1.3000 zone which is
likely reaching the limit of the markets willingness to trade with the bias of
the SNB. Should these levels be met, it is expected that further gains in
this cross will become more dependent on Swiss economic releases.
A sustained move under 1.2024 will alter our near-term bullish bias.
S-T TREND L-T TREND
Buy limit 3 at 1.2180, Objs: 1.2260/1.2344/1.2500, Stop: 1.2100.
EUR/CHF daily chart, Bloomberg Finance LP
EUR/CHF
EUR/CHF hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 11 October, 2011
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RISK of a larger decline beneath $1600.
Lowered final objective to 1300. Gold remains bearish after its dramatic
20% price fall, which helped confirm the extreme overbought conditions
(marked by DeMark™ indicators), that timed with a key cycle peak, ahead
of that all-important $2000 glass-ceiling.
The “perfect storm” of bearish technical signals is also being pressured by
the CME’s recent 55% hike in margin requirements, which is helping to
squash the largest of gold-bug positions. Most concerning is that
speculative (net long) flows have recently breached a key downside level
which may threaten over 2 years of sizeable long gold positions. 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 long-
term bull market in 1999.
There is heightened risk of a much larger decline if we confirm a weekly
close beneath $1600 and $1534 (200-day MA), 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.
Please select links for in-depth Gold coverage: Special Report “Gold’s mountainous peak at risk…beneath $1600” MIG Bank Gold Interview on CNBC Squawk Box (CNBC & BLOOMBERG REPORTS) MIG Bank Gold Webinar video
S-T TREND L-T TREND STRATEGY
SHORT 1: 1805, Objs: Lowered to 1300. Stop: 1704
GOLD
Gold, weekly, daily chart and COT Liquidity measures, Bloomberg Finance LP
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
TREND CHANNEL (12 YEARS)
I
RISK ZONE III
BIGGEST DRAWDOWNS 34% (2008) 26% (2006) 25% (1999) AVERAGE = 28%
25%
26%
34%
20% SO FAR
COT NET LONG SPECULATOR POSITIONS
OVER 2 YEARS OFSIZEABLE LONG
GOLD POSITIONSUNDER THREAT
IF KEY LEVEL BREAKS
200-DMANOT TESTED IN 3 YEARS!
RISK (1935)
DEMARK™ SIGNAL WARNED OF GOLD’S OVERBOUGHT CONDITIONS WHICH LED TO A $200 DROP IN 3 DAYS!
BREAKOUT
$1704
DOWNSIDE:
$1600
$1600 / $1530 UPSIDE: $1935 / $2000GOLD KEY TRIGGER LEVELS
$1532
II
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KEY support at $26.0700.
Exited at 32.5200. Silver’s latest price capitulation is a painful reminder to
the investment community that lightning can strike twice. Note, this marks
the second time silver has crashed, following its 30% fall from April this
year.
Exited at 32.5200. Silver’s latest price capitulation is a painful reminder to
the investment community that lightning can strike twice. Note, this marks
the second time silver has crashed, following its 30% fall from April this
year.
The move was triggered following a DeMark™ exhaustion sell signal and
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.
The move was triggered following a DeMark™ exhaustion sell signal and
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.
Such dramatic moves traditionally produces volatile trading ranges. This
allows the market to have enough time to recover and accumulate
renewed buying interest.
Such dramatic moves 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.
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 67%, suggesting further risk aversion over the next few weeks.
Continue to watch the gold-silver “mint” ratio which has now accelerated
higher by 67%, suggesting further risk aversion over the next few weeks.
S-T TREND S-T TREND L-T TREND L-T TREND STRATEGY STRATEGY
Awaiting New Sell Trade Setup.
SILVER
Spot Silver daily, monthly chart and gold-silver ratio, Bloomberg Finance LP
Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454
OVER 30 YEAR BASE BULL
MARKET FROM
1999
Silver Monthly (since 1980)
13
61.8% (21.5165)
38.2% (32.3135)
50% (26.9150)
Silver HITS 1980 Spike High! DEMARK™ SIGNALSELL
I
II
UNWINDING 67% FROM OVERSOLD TERRITORY
Gold/Silver Ratio
67%13 YEAR LEVEL
Silver (Daily) 13
200 DMA(32.8700)
SELL DEMARK™
SIGNALS
KEY SUPPORT
13
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DAILY TECHNICAL REPORT 11 October, 2011
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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.
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
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whilst every effort is made to ensure that the content is accurate and
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LEGAL TERMS
DIS
CLA
IME
R
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DAILY TECHNICAL REPORT 11 October, 2011
www.migbank.com Chief Market Strategist [email protected]
Howard Friend
[email protected] Technical Strategist Bjioy Kar
CH-2008 Neuchâtel Tel.+41 32 722 81 00
14, rte des Gouttes d’Or
www.migbank.com
MIG BANK [email protected] Technical Strategist
Ron William
CONTACT