DAILY TECHNICAL REPORT - FXStreetmediaserver.fxstreet.com/Reports/c5f2b8a7-68e7-4fdd-8f2c-ba3c... · USD/CHF daily chart, Bloomberg Finance LP . 6 DAILY TECHNICAL REPORT 16 December,
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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
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
MAS-TERM MULTI-DAY
L-TERM MULTI-WEEK
STRATEGY/ POSITION
ENTRY LEVEL
OBJECTIVES/COMMENTS STOP
EUR/USD ê ê SHORT 1 1.3280 1.2870 (Entered 12/12/2011) 1.3140
GBP/USD è è Await fresh signal.
USD/JPY è è Awaiting New Buy Trade Setup Above 80.00.
USD/CHF é é Possible sell higher.
USD/CAD é é Awaiting New Buy Trade Setup.
AUD/USD è ê SHORT 2 1.0050 0.9660/0.9380 (Entered 13/12/2011) 1.0050
GBP/JPY è ê Await fresh signal.
EUR/JPY è ê Buy limit 3 101.05 102.05/105.00/107.68 100.05
EUR/GBP ê ê Sell limit 3 0.8510 0.8395/0.8300/0.8142 0.8615
EUR/CHF è ê Sell Stop 3 1.2130 1.2030/1.1526/1.1002 1.2230
GOLD ê è SHORT 2 1705 1530/1300 (Entered 12/12/2011) 1705
SILVER ê è SHORT 2 34.1300 26.0700/23.3400 (Entered 01/11/2011) 34.1300
DISCLAIMER & DISCLOSURES Please read the disclaimer and the disclosures which can be found at the end of this report
DAILY TECHNICAL REPORT 16 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.
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DAILY TECHNICAL REPORT 16 December, 2011
www.migbank.com
Short-covering around the key 1.3000 level.
Ë 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.
Ë 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.
Ë Watch for a sustained close beneath 1.3000 (psychological level) to resume
EUR/USD’s multi-month downtrend into 1.2870 (2011 major low).
Ë 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.
Ë Inversely, the USD Index has extended its recovery higher to new 11-month
highs, (a move worth over 10% from the summer 2010 lows).
Ë Speculative (net long) liquidity flows is strengthening once again and will
continue to help resume the USD’s 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
ê ê SHORT 1: 1.3280, Objs: 1.2870, Stop: 1.3280
EUR/USD
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
EUR/USDEUR/USD
EUR/USD daily chart, Bloomberg Finance LP
Ro
USD Index daily chart, Bloomberg Finance LP
UPTREND (2 YEARS)
200-DMA (1.4060)
BERMUDA TRIANGLE FAILED
BREAKOUTS
EUR/USD (Daily)
BREAKOUT ZONE
(1.4000)
1.3000 (PSYCHOLOGICAL) 1.2870 (2011 MAJOR LOW)
9 KEY SUPPORT (73.50-73.00)
13
USD INDEX
200-DMA (75.88)
DEMARK™ BUY SIGNALS
BREAKOUT ZONE
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%
11 MONTH HIGH
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DAILY TECHNICAL REPORT 16 December, 2011
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Break over trend-line off 1.5770 sought before attempting longs.
Ë GBP/USD has managed to break out of its prior sequence of lower lows and
higher highs, forming an hourly falling channel. This may mark the final
phase of short-term weakness from the 1.5780 lower high. However, a
break over the hourly channel resistance is sought before attempting longs.
Ë Demand for sterling is likely to be affected by the movement in selected core
Euro-Zone sovereign markets. In particular we note that Italian 10 year
yields are shying away from 7.000%. Daily structure is also suggestive of a
return to test 7.000% and higher. A continuation of higher yields may see
Sterling being adopted as a safe haven again. This reasoning would likely
help to keep cable within its year long range.
Ë Failure to remain above 1.5423 will see an immediate target at 1.5272 and
then potentially trend-line support at 1.5110.
S-T TREND L-T TREND STRATEGY
è è Await fresh signal.
GBP/USD
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, 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 16 December, 2011
www.migbank.com
Weakening beneath 78.24 (DeMark™ Level).
Ë USD/JPY is still weak beneath 78.24 (DeMark™ Level), as price continues
to hold within a multi-day trading range (see hourly chart below).
Ë Confirmation beneath 77.25 (pivot level) would help trigger a third price
retracement back to pre-intervention levels (PIR III) and potentially even a
new post world war record low beneath 75.35 (PINL).
Ë 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).
Ë 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.
Ë 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
Webinar: USD/JPY’s Long-Term Structural Change
Media Reports: CNBC / Squawk Box & Bloomberg
S-T TREND L-T TREND STRATEGY
è è Awaiting Renewed Buy Trade Setup above 80.00.
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426
USD/JPY
USD/JPY hourly chart, Bloomberg Finance LP
QUAKE SHOCK!
POST INTERVENTION RETRACEMENT (PIR I)
G7 MOVE HIGH
PIR II
POST BOJ
MOVE (II) HIGH
DEMARK™ BUY SIGNAL AHEAD OF
NEW POST WWII LOW (75.35)
POST BOJ
MOVE (III) PIR III
MULTI-YEAR PATTERN
ANTICIPATES BREAKOUT (85-80)
POST BOJ MOVE (III)
KEY PIVOT LEVEL (77.25) TRIGGERS
POST INTERVENTION RETRACEMENT
DEMARK™ SELL SIGNAL
USD/JPY (60 MIN)
USD/JPY daily chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 16 December, 2011
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Encounters resistance close to our first target at 0.9555.
Ë Look to sell higher.
Ë USD/CHF has met resistance close to our initial target in our previous long
strategy into the rise from 0.9176. We view the push under 0.9430 as
potentially breaking down the short-term bullish structure. However, while
above 0.9342, there remains scope for a further rise back towards 0.9548
initially.
Ë Given that the region of the initial target has been tested and with yields
continuing to rise in some core Euro-Zone sovereign markets, the trade
location is deemed as poor. It is anticipated that a return to 7.000% in Italian
10 year yields is imminent. This may once again pressure USD/CHF to the
downside. There is thus potentially a greater opportunity to sell at higher
levels.
Ë Referencing Spanish and Italian government bonds back to their respective
levels prior to the six party central bank agreement, we note that most of the
positive after effects have worn off, with yields trading at 5.698% and
6.824% versus 6.374% and 7.355%, before the agreement. (These yields
were trading at 5.699% and 6.685% respectively at the same time
yesterday.)
S-T TREND L-T TREND STRATEGY
é é Possibly looking to sell higher.
USD/CHF hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
USD/CHF
USD/CHF daily chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 16 December, 2011
www.migbank.com
Unwinding from intraday resistance at 1.0425.
Ë USD/CAD is unwinding from intraday resistance at 1.0425, which coincided
with a short-term DeMark™ exhaustion signal. The move has temporarily
breached a multi-day bull-channel (see lower chart) and we prefer to wait for
a resumption higher to open a buy trade setup.
Ë The bulls need to push back above 1.0425 and 1.0524 (25 Nov swing high),
in order to trigger a breakout from the rate’s major triangle pattern.
Ë 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 rate’s ending triangle pattern, which was part of a
major Elliott wave cycle (see top chart insert).
Ë Only a sustained close beneath 1.0200 and 1.0080, then parity unlocks
bearish setbacks into the long-term 200-day MA at 0.9879 and 0.9726 (31st
Aug low).
Ë EUR/CAD is unwinding mildly ahead of the base of an important multi-
month distribution pattern. A 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.
S-T TREND L-T TREND STRATEGY
é é Awaiting New Buy Trade Setup above 1.0425.
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
USD/CAD
USD/CAD daily chart, Bloomberg Finance LP
USD/CAD hourly chart, Bloomberg Finance LP
USD/CAD (Daily)
200-DMA (0.9879)
CONFIRMATION ABOVE 1.0680
OPENS LARGER RECOVERY
DEMARK™ BUY SIGNAL
USD/CAD (60 MIN)
KEY RESISTANCE (1.0425)
BULL CHANNEL
DEMARK™ SIGNAL
DEMARK™ SELL SIGNAL
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DAILY TECHNICAL REPORT 16 December, 2011
www.migbank.com
Strong unwinding from oversold conditions.
Ë AUD/USD is unwinding strongly from oversold conditions, which also
coincided with an intraday DeMark™ buy signal (see lower chart).
Ë Even so, we expect this recovery to be short-lived and continue to hold our
stop level at 1.0050 for the active model portfolio short position, which is still
maintaining a risk-free bias.
Ë The bears must sustain below 1.0000 to further compound downside
pressure on the rate’s multi-year uptrend and push back towards 0.9611.
Ë Elsewhere, the Aussie has weakened sharply, as expected, 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.
Ë 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.
S-T TREND L-T TREND STRATEGY
è ê SHORT 2: 1.0050, Obj: 0.9660/0.9380, Stop: 1.0050.
AUD/USD
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
AUD/USD daily chart, Bloomberg Finance LP
AUD/USD hourly chart, Bloomberg Finance LP
KEY
ZONE
AUD/USD (1 YEAR)
DEMARK™ SELL SIGNALS
200-DMA (1.0405)
AUD/USD (60 MIN)
DEMARK™ BUY SIGNAL
RANGE BREAKOUT
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