2011 11 16 Migbank Daily Technical Analysis Report

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MIG BANK / Forex Broker14, rte des Gouttes dOr CH-2008 Neuchtel Switzerland

Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] 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

MA

S-TERMMULTI-DAY

L-TERMMULTI-WEEK

STRATEGY/POSITION

ENTRYLEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD SHORT 3 1.3480 1.3140/1.3000/1.2860 (Entered 16/11/2011) 1.3650GBP/USD Await fresh signal.USD/JPY Await New Buy Trade Setup.USD/CHF Await fresh signal.USD/CAD LONG 3 1.0250 1.0360/1.0480/1.0670 (Entered on 10/11/2011) 1.0050AUD/USD SHORT 2 1.0570 1.0010/0.9710 (Entered 01/11/2011) 1.0470GBP/JPY Await fresh signal.EUR/JPY Look to see how 104.00 fares.EUR/GBP SHORT 3 0.8555 0.8455/0.8285/0.8068 (Entered 11/11/2011) 0.8655EUR/CHF Sell stop 3 1.2130 1.2030/1.1526/1.1002 1.2230GOLD Awaiting New Sell Trade Setup.SILVER SHORT 3 34.1300 29.9700/26.0700/23.3400 (Entered 01/11/2011) 35.6880

DISCLAIMER &DISCLOSURESPlease read the disclaimer and thedisclosures which can be found atthe end of this report

DAILY TECHNICAL REPORT16 November, 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 h it 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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Resuming sharp reversal into 1.3140.

EUR/USD is resuming its sharp reversal from key overhead resistance

(primarily an important 2 year trend-line and 200-day average).

The bearish move is now being further anchored down by heightened

European soverign debt risk after Italian Govt. yields launched above 7%.

Expect downside scope into 1.3146 (Oct swing low) and psychological level

at 1.3000, then 1.2870 (2011 major low).

Further pressure may also weigh from broad risk-related proxies. The euro

continues to share a high correlation with the S&P500 and AUD/USD.

Inversely, the USD Index has turned back higher above its long-term 200-

day MA. The bulls are likely to recapture the recent 9-month highs near 80.

Speculative (net long) liquidity flows are holding steady around their recentspike highs (3 standard deviations from the yearly average). This will likely

remain strong and help resume the USDs 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

SHORT 3: 1.3480, Objs:1.3140/1.3000/1.2860, Stop: 1.3650

EUR/USD

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

EUR/USD

EUR/USD daily chart, Bloomberg Finance LP

USD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP

200-DMA(1.4104)

BERMUDATRIANGLE FAILED

BREAKOUTS

UPTREND(2 YEARS)

EUR/USD (Daily)

BREAKOUT

ZONE(1.4000)

SHARP REVERSALAT KEY RESISTANCE

TARGETS 1.3000 & 1.2870

+

-

USD INDEX(4 YEARS)

DEMARKBUY SIGNAL

+27% +19%

TRIGGER(15000)

COT LIQUIDITY

+10%SO FAR

3 STD ABOVEONE YEARAVERAGE

EXTREME NETUS $ SHORTPOSITIONS

KEY SUPPORT(73.50-73.00)9

13

USD INDEX

200-DMA(75.72)

DEMARKBUY SIGNALS

BREAKOUT ZONE

EUR 57.6%, JPY 13.6%, GBP 11.9%CAD 9.1%, SEK 4.2%, CHF 3.6%

9 MONTHHIGH

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Break back over 1.6127 fails to materialise.

GBP/USD saw a clear break under the 1.5871-77 floor that had been

containing weakness off the recent 1.6167 high. Mondays failure to realise

a return to 1.6200, to complete the rising phase off 1.5272, is another

warning sign of a messy sideways market, with impulsive moves failing to

materialise where expected.

We now look to see if the 1.5632 region can contain the current push lower.

Failure to hold above this level will warn that strength from 1.5272 is

complete.

The falling wedge that appears to be forming in the hourly timeframe is

suggestive of an exhaustion of the recent down phase.

Sterling is expected to stay stronger then most, should the US Dollar enterinto a strengthening phase.

S-T TREND L-T TREND STRATEGY

Await fresh 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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Probability now favours retracement to pre-intervention levels.

USD/JPY is continuing to edge lower, with the growing probability of another

price retracement back to pre-intervention levels (PIR) and potentially even

a new post world war record low beneath 75.35 (PINL).

Furthermore, sentiment in the option markets continues to suggest that

USD/JPY buying pressure remains overcrowded as everyone in the market

continues to try and be the first to call the market bottom.

This may 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.

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 into November-December this year, offering a sustained

move above our upside trigger level at 80.00/60, then 82.00 and 83.30.

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, launching a powerful recovery into 91.00.

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/JPYs Long-Term Structural Change CNBC Report

S-T TREND L-T TREND STRATEGY

Awaiting Renewed Buy Trade Setup.

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 426

USD/JPY

USD/JPY daily, weekly chart, Bloomberg Finance LP

83.30

USD/JPY(Daily1 YEAR)

QUAKE

SHOCK!

POST INTERVENTIONRETRACEMENT (PIR I)

POSTG7

MOVE (I)HIGH

82.00

PIR II

80.24

POSTBOJ

MOVE (II)HIGH

DEMARK BUY SIGNAL AHEADOF NEW POST WWII LOW (75.35)

POSTBOJ

MOVE (III)HIGH

MONTHLY DEMARKBUYSIGNAL

USD/JPY Weekly(2007 2011)

ENDINGDIAGONAL

PATTERNBREAKOUT

TARGET(85-79)

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Below 0.9316 suggests a corrective phase is more likely.

Strategy to buy at 0.9110 removed.

USD/CHF remains bound within the confines of the hourly channel which we

highlighted yesterday. It has been decided to remove the strategy to buy at0.9110, as a fall back down to this level, after pushing over 0.9200, would

lead to a break down in positive structure, giving the long trade a weaker

probability of success.

In fact while below 0.9316 a return to the region close to 0.8242 remains

possible. However, if a break above 0.9316 can be achieved without

breaking under 0.8568, a structural change will occur, increasing the

probability of further gains ahead.

Focus still remains on Italian and Spanish sovereign yields. Also of interestis that French government bonds are widening across the whole curve

versus their German counterparts, when compared to the spread just one

month ago. This is a further warning sign, as shown in the chart to the left.

S-T TREND L-T TREND STRATEGY

Await fresh signal.

French vs German bond yields, 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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Bulls hold gains above psychological 1.0000 level.

USD/CADs short-term price activity remains positive, following the sharp

bullish reversal from the psychological 1.0000 level (prior trading range).

Positive momentum needs to confirm a daily close above 1.0264, then

1.0400 to rebuild the potential major upside reversal higher above the old

resistance level at 1.0673 (August high & Congestion zone).

A strong directional confirmation above here will open a much larger

recovery into 1.0850 plus. This would extend the upside breakout from the

rates ending triangle pattern, which was part of a major Elliott Wave cycle.

Only a sustained close beneath parity will unlock bearish setbacks into the

long-term 200-day MA at 0.9827 and 0.9726 (31st Aug low).

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 has broken through support nearby the 200-day MA at 1.1326,

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: 1.0250, Objs:1.0360/1.0480/1.0670, Stop: 1.0050Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

USD/CAD

USD/CAD daily, weekly chart, Bloomberg Finance LP

EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP

USD/CAD (Weekly)

CONFIRMATIONABOVE 1.0680

OPENSLARGER

DEMARKBUY SIGNAL

USD/CAD (Daily)

August High(1.0673)

200-DMA(0.9827)

200-DMA(1.3852)

MAJOR RESISTANCE

50%(1.3570)

61.8%(1.3379)

EUR/CAD (Daily)

REVERSALPATTERN

CHF/CAD (Daily)

200-DMA1.1326

50%(1.1488)

61.8%(1.0893)

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Sharp setbacks weigh.

AUD/USDs sharp setbacks continue to weigh. The move was triggered

from key resistance at 1.0765 (01st Sept high) and is now holding beneath

the 200-day MA (1.0418).

A sustained move below here is likely to mount downside pressure on the

rates multi-year uptrend and puh back under parity, toward 0.9611.

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 has reversed gains against the Japanese yen and is now

trading back below the long-term 200-day MA which is currently at 82.95.

Near-term support continues to hold at 77.63 (18th Oct low). A break here

will resume downside scope into 76.70 and signal further unwinding of risk

appetite.

S-T TREND L-T TREND STRATEGY

SHORT 2: 1.0570, Obj: 1.0010/0.9710, Stop: 1.0470

AUD/USD

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

AUD/USD daily, weekly chart, Bloomberg Finance LP

AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP

200-DMACAPSBEARMKT

AUD/NZD(Daily)

KEY SUPPORT1.2319 / 1.2100

200-DMA

(82.95)

13

38.2%(76.70)

61.8%

(68.47)

50%(72.58)

AUD/JPY(Daily)

DEMARKSELL SIGNAL

RESUMPTION OF

BREAKDOWNADDS TO

RISK AVERSION

AUD/USD(Weekly)

38.2%(0.9144)

50%(0.8546)

61.8%(0.7947)

3 YEARUPTRENDISUNDER

PRESSURE

STRUCTURALLEVEL

KEYZONE

AUD/USD(1 YEAR)

DEMARKSELLSIGNALS

200-DMA(1.0418)

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Hourly falling wedge warns of downside exhaustion.

Long stopped. Await fresh signal.

GBP/JPY has broken clearly under the 122.38/65 platform over the last two

sessions. This now warns of a breakdown in positive structure. However,the hourly timeframe is currently exhibiting a falling wedge formation which

is suggestive of a degree of downside exhaustion. We will thus await a

bounce higher ahead of the possible formulation of a short strategy.

Strictly speaking a break under 120.85 needs to be witnessed, to completely

break down the positive structure seen since 116.84.

If a push below this key level can be realised then a return back down to

116.84 would become favoured.

S-T TREND L-T TREND STRATEGY

Long stopped. Await fresh signal.

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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Initial signs of support seen close to 104.00.

EUR/JPY is currently testing the region close to 104.00. A degree of

support was anticipated here. Failure to hold above 103.41 will lead to a

complete breakdown in positive structure, with a return to 100.76 then

favoured.

Back over 106.74 is required to neutralise the outlook in the short-term.

A sustained hold over the 200 day moving average will turn the medium-

term outlook more bullish.

We will now monitor the price action close to 104.00 to try and determine if a

short-term buying opportunity will present itself.

S-T TREND L-T TREND STRATEGY

Look to see how the 104.00 region fares.

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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Return to 0.8486 and then lower now favoured.

EUR/GBP has failed to hold back over old trend line support in recent

sessions. This now warns of a return to 0.8486 and then potentially lower.

Weakness is still being contained by an hourly falling channel, with the

support of this structure currently near 0.8450. A sustained break under

0.8486 will open up a return to the January 2011 low at 0.8285.

If a large move to the downside were to materialise in this environment, it is

likely to be associated with Sterling being perceived as a safe haven. In this

respect we need to monitor the yields on Italian, French and Spanish

government bonds, noting that the ten year yield in both Italian and Spanish

sovereigns are trading above 6.00%.

In the near-term, a break back over 0.8652 is required to neutralise the

outlook once again

Failure to hold under the old double bottom and trend-line will warn of a

false break lower, with a danger that trade returns back into the old range.

S-T TREND L-T TREND STRATEGY

Short 3 at 0.8555, Objs: 0.8455/0.8285/0.8068, Stop: 0.8655

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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Approaches the 1.2500 region once again.

EUR/CHF is maintaining its tight trading range just under the 1.2500 level.

It is anticipated that this zone may see a degree of resistance, particularly in

light of the movement in periphery yield spreads versus bunds. Over time,

this may lead to a renewed desire for a safe haven, with downside pressure

returning to EUR/CHF.

We would prefer to trade this from a momentum perspective, awaiting a

return to the 1.2000 region. 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.

It remains to be seen if 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

Sell stop 3 at 1.2130, Objs: 1.2030/1.1526/1.1002, Stop: 1.2230.

EUR/CHF weekly 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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Positive for the short-term.

Gold remains fragile after its dramatic 20% price fall, which helped confirm

the extreme overbought conditions (marked by DeMark indicators). This

also timed a key cycle peak, ahead of that all-important $2000 glass-ceiling.

However, short-term price activity is building constructively higher around

key level at 1760. A sustained move above here would open moves into

1844.

Speculative (net long) flows remain a concern having recently breached a

key downside level which may threaten over 2 years of sizeable long gold

positions.

There is heightened risk of a much larger decline if we confirm a weekly

close beneath $1600 and $1554-30 (200-day MA/swing low), 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 into $1300 and perhaps even $1040-1000. Remember, this would still

offer a unique buying opportunity in the near future.

Please select links for in-depth Gold coverage:

Special ReportGoldsmountainous peak at riskbeneath $1600 VIDEO

Bloomberg Countdown CNBC Squawk Box MIG Bank Gold Webinar video(BLOOMBERG&CNBCREPORTS)

S-T TREND L-T TREND STRATEGY

Awaiting New Sell Trade Setup.

GOLD

Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

TRENDCHANNEL(12 YEARS)

I

RISK ZONE III

CONFIRMATION BELOW $1530UNLOCKS LARGER DECLINEINTO $1300 & $1040-1000

26%

34%

20%SO FAR

25%

II

COT NET LONGSPECULATORPOSITIONS

OVER 2 YEARS OFSIZEABLE LONG

GOLD POSITIONSUNDER THREAT

IF KEY LEVEL BREAKS

200-DMANOT BROKENIN 3 YEARS!

DEMARK SIGNALWARNED OF GOLDSOVERBOUGHTCONDITIONS

BREAKOUT

$1704

$1600

DOWNSIDE: $1600 / $1530 UPSIDE: $1760 / $1844

GOLD KEY TRIGGER LEVELS

$1532

DOUBLETOP

$1760

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Key support at $26.0700.

Silver has developed a short-term recovery from its previous swing low at

26.0700. However, macro price structure continues to focus on the

downside risks, following the major sell-off in September.

Such a dramatic move 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 silvers 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.

S-T TREND L-T TREND STRATEGY

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

SILVER

Spot Silver daily, weekly chart and Gold/Silver mint ratio, Bloomberg Finance LP

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

BULLMARKET

FROM1999

Silver Monthly (since 1980)

13

38.2%(32.3135)

50%(26.9150)

61.8%

(21.5165)

I

II

OVER 30YEAR BASE PATTERN

Silver HITS 1980 Spike High! DEMARKSELL SIGNAL

13 YEAR LEVEL

UNWINDING 67%FROMOVERSOLD TERRITORY

Gold/Silver "Mint" Ratio

KEYSUPPORT(26.0700)

DEMARKSELL SIGNALS

Silver (Daily)

200 DMA(36.5125)

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Limitation of liability

MIG BANK disclaims, without limitation, all liability for any loss or damage of any kind,

including any direct, indirect or consequential damages.

Material InterestsMIG BANK and/or its board of directors, executive management and employees may have or

have had interests or positions on, relevant securities.

Copyright

All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or

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 bemoved 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.

DISCLAIMERNo 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 solely based on the content. You should obtain advice from a qualified expert before

making any investment decision.

All opinion is based upon sources that MIG BANK believes to be reliable but they have no

guarantees that this is the case. Therefore, whilst every effort is made to ensure that the

content is accurate and complete, MIG BANK makes no such claim.

LEGALTERMS

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www.migbank.comRon WilliamTechnical [email protected]

MIG [email protected]

14, rte des Gouttes dOrCH-2008 NeuchtelTel.+41 32 722 81 00

Bjioy KarTechnical [email protected]

CONTACT

Howard FriendChief Market [email protected]