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,

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

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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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: [email protected], 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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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.


è è 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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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


è è Awaiting Renewed Buy Trade Setup above 80.00.


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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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.)


é é Possibly looking to sell higher.

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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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.


é é Awaiting New Buy Trade Setup above 1.0425.


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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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.


è ê SHORT 2: 1.0050, Obj: 0.9660/0.9380, Stop: 1.0050.

AUD/USD


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

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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