DAILY TECHNICAL REPORT

26 October, 2011
Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

MA RK ET
EUR/USD GBP/USD USD/JPY USD/CHF
Ron William, CMT, MSTA

S-TERM
MULTI-DAY

L-TERM
MULTI-WEEK

STRATEGY/ POSITION

ENTRY LEVEL

OBJECTIVES/COMMENTS

STOP

Buy limit 3 Buy Stop 3 Sell Stop 3 Sell limit 3 Sell limit 3 Sell limit 3 0.8600 1.0275 1.0330 123.15 107.90 0.8870

Awaiting New Sell Trade Setup. Await fresh signal. Awaiting New Buy Trade Setup. 0.9000/0.9200/0.9316 1.0660/1.0850/1.1110 0.9930/0.9620/0.9380 121.60/118.50/116.50 106.90/104.00/100.00 0.8750/0.8580/0.8400 Await fresh signal. Exited Final Unit of 1805 SHORT at 1704. Exited at 33.0550. 0.8500 1.0150 1.0510 124.40 109.00 0.8970

USD/CAD AUD/USD GBP/JPY EUR/JPY EUR/GBP

Bijoy Kar, CFA

EUR/CHF GOLD SILVER

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. CH-2008 Neuchtel Switzerland [email protected] www.migbank.com

MIG BANK / Forex Broker14, rte des Gouttes dOr Tel +41 32 722 81 00 Fax +41 32 722 81 01

EUR/USD EUR/USD
EUR/USD (Daily)
BERMUDA TRIANGLE FAILED
BREAKOUTS

DAILY TECHNICAL REPORT

26 October, 2011

Resistance at 1.3937 is holding pressure.

EUR/USDs short-term recovery (worth almost 6%) remains under pressure below resistance at 1.3937 (which has not been breached on a close basis). Bears need to break 1.3653 (18 Oct swing low) and 1.3550 (50% Fib-04
th th

BIG LEVEL (1.4000)

Oct swing), to challenge that all-important psychological level at 1.3000 and unlock further scope into 1.2860 (near 2011 low). Key resistance remains at 1.3937 (15
th

Sept high), which is near the

previous breakout zone at 1.4000 and the long-term 200-day MA at 1.4095.

200-DMA (1.4095) TREND 2 YEARS (1.4030)

IMPULSIVE (WAVE 3) DECLINE TARGETS 1.3000 & 1.2870

Only a confirmation above here will neutralise the status quo. Inversely, the USD Index is continuing to retrace (from its recent 6-month highs) and we expect support to hold at 75.80-55 for the next leg higher. Speculative (net long) liquidity flows are temporarily unwinding from their recent spike highs (3 standard deviations from the yearly average). This will remain strong and help resume the USDs bull-run from its historic oversold extremes (momentum, sentiment and liquidity).

EUR/USD daily chart, Bloomberg Finance LP

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

USD INDEX (4 YEARS)

+27%

+19%

+10%
SO FAR

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.
BREAKOUT ZONE
DEMARK BUY SIGNAL

MIG Bank US Dollar Interview on Bloomberg

200-DMA (75.93)

3 STD ABOVE ONE YEAR AVERAGE

TRIGGER (15000)
DEMARK BUY SIGNALS

13

KEY SUPPORT (73.50-73.00)

COT LIQUIDITY

EXTREME NET US $ SHORT POSITIONS

S-T TREND

L-T TREND

STRATEGY
Awaiting New Sell Trade Setup.

USD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP
www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 2

GBP/USD

DAILY TECHNICAL REPORT

26 October, 2011

Under 1.5632 would turn bias bearish.

GBP/USD is settling above the 38.2% retrace of the 1.6747-1.5272 fall. A sustained break under 1.5632 is now required to increase the probability of a lasting lower high near this key retrace.
200-day MA

Strategy is still hampered by a lack of reliable structure, largely due to the range bound nature of the market in the medium-term time frame. Should this continue then a larger recovery phase, back towards the 200 day moving average would come back into focus. Remaining neutral is deemed best for now. GBP/USD has already experienced a large devaluation versus the US Dollar, therefore any further strengthening in the US Dollar may not see the

GBP/USD daily chart, Bloomberg Finance LP

full participation of GBP/USD. stronger then most.

Instead GBP/USD is favoured to remain

GBP/USD hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await signal.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 3

USD/JPY
USD/JPY (Daily 1 YEAR)

DAILY TECHNICAL REPORT

26 October, 2011
POST INTERVENTION RETRACEMENT (PIR I)

USD/JPY still basing around its NEW all-time low.

USD/JPY maintains a confluence of DeMark exhaustion bullish signals, after yet another new post WWII record low which was carved out at 75.82.

QUAKE SHOCK! 83.30

POST G7 MOVE HIGH

These reversal signals are also following the second post intervention retracement in 2011, which is holding around a multi-week base pattern. It is also worth noting that our volatility measures remain very low and continue to favour a major breakout over the short-term horizon.
82.00

The medium/long-term view remains bullish, watching for a sustained move

POST BOJ MOVE HIGH

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).
80.24

Keep in mind that such a scenario would help reactivate the longer-term technical bias, including prior monthly DeMark exhaustion signals, within
USD/JPY Weekly (2007 2011)

ENDING DIAGONAL PATTERN BREAKOUT TARGET (88-85)

PIR II

the ending diagonal pattern, which was part of a major Elliott Wave cycle. Only a sustained weekly close below 76.25 will lead to a reassessment of
DEMARK BUY SIGNAL AFTER NEW POST WWII LOW (75.82)

the view and extend temporary weakness into 74.55.

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/JPYs 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. - High-Probability Trading Strategies.

MONTHLY DEMARK BUY SIGNAL

S-T TREND

L-T TREND

STRATEGY
Awaiting New Buy Trade Setup.

USD/JPY daily, weekly chart, Bloomberg Finance LP

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 426 4

USD/CHF
Lower high in place at 0.9083.

DAILY TECHNICAL REPORT

26 October, 2011

USD/CHF appears to have printed a lower high at 0.9083 following the recent break under 0.8881.
200-day MA

While under 0.9123 a continuation of this

weakness is favoured. It is also noted that the current trading region is close to the location of the 50 week moving average, at 0.8949. Thus, a continuation of weakness would also warn of a breakdown of the recent recovery structure. However, back under 0.7712 is required to change the long-term bullish bias. The recent break lower also opens up the potential for a further extension towards 0.8600, where a return to a bullish bias would become attractive again.

USD/CHF daily chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Buy limit 3 at 0.8600, Objs: 0.9000/0.9200/0.9316, Stop: 0.8500

USD/CHF hourly chart, Bloomberg Finance LP

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 5

USD/CAD
USD/CAD (Daily)
August High (1.0673)

DAILY TECHNICAL REPORT

26 October, 2011
USD/CAD (Weekly)

Bullish reversal above psychological 1.0000 level.

USD/CAD has triggered a bullish reversal above the all-important 1.0000 level (psychological level and prior trading range). Positive momentum needs to push above 1.0264 and 1.0400 to extend the

200-DMA (0.9811)

CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY

recovery 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.

DEMARK BUY SIGNAL

Meanwhile, only a sustained close beneath 1.0000 will extend bearish setbacks into next the support level at 0.9750.

USD/CAD daily, weekly chart, Bloomberg Finance LP

MAJOR RESISTANCE CHF/CAD (Daily) REVERSAL PATTERN

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 1.1248, following the dramatic price slide lower (triggered by the SNB intervention). The cross-rate has now retraced more than half of its 2011 gains.

50%

(1.3570)
61.8% 50% 200-DMA (1.3826)

(1.3379)

(1.1488)
61.8%

(1.0893)
200-DMA (1.1261)

EUR/CAD (Daily)

S-T TREND

L-T TREND

STRATEGY
Buy Stop 3: 1.0275, Objs:1.0660/1.0850/1.1110, Stop: 1.0150

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

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 6

AUD/USD
AUD/USD
(1 YEAR) DEMARK SELL SIGNALS TD RISK (1.1102) (1.0935)

DAILY TECHNICAL REPORT

26 October, 2011
AUD/USD
(Weekly)

Bearish reversal below its 200-day MA at 1.0371.

AUD/USD has triggered a bearish reversal pattern back into the long-term
STRUCTURAL LEVEL

200-day MA which is currently holding at 1.0371. Expect momentum to unwind further into the rates psychological level at 1.0000.
3 YEAR UPTREND IS UNDER PRESSURE

38.2%

(0.9144)
50%

In terms of the big picture, AUD/USDs multi-year uptrend remains under pressure since the previous breakdown. The bears need to confirm beneath 0.9388 (04 Oct low & structural level) to unlock a much larger decline into 0.9220 and 0.9144 (38.2% Fib-2008 uptrend). 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.
th

(0.8546)
200-DMA (1.0371)

61.8%

(0.7947) KEY ZONE

AUD/USD daily, weekly chart, Bloomberg Finance LP

AUD/NZD (Daily) AUD/JPY (Daily)
DEMARK SELL SIGNAL

The Aussie dollar has stabilised against the Japanese yen, after failing into
13

resistance at 79.92. Watch for a resumption of the major downtrend from spring 2011. Strong downside scope will signal further unwinding of global

200-DMA CAPS BEAR MKT 38.2%

risk appetite.

(76.70)
50%

200DMA (83.15)

(72.58)
61.8%

(68.47)

BREAKDOWN ADDS TO RISK AVERSION

S-T TREND L-T TREND STRATEGY
Sell Stop 3: 1.0330, Objs: 0.9930/0.9620/0.9380, Stop: 1.0510

KEY SUPPORT 1.2319 / 1.2100

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

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 7

GBP/JPY

DAILY TECHNICAL REPORT

26 October, 2011

Range bound short-term, favouring a return to 122.65.

GBP/JPY saw a minor break under 120.34 which failed to hold, reaching
200-day MA

120.00. This is suggestive of the potential for a further recovery leg higher to test the region near 123.00. The structure present since 116.84 is deemed corrective, with scope for a final swing higher to complete this corrective phase. However, a sustained push under the recent low at 120.00 will warn of resumption of weakness back towards the floor near 117.00. However, an eventual return to

116.84/98 is expected, below which would open up an extension towards 115.00 immediately. A sustained break over 123.31 is required to change the current bearish GBP/JPY daily chart, Bloomberg Finance LP bias. Should this take place a larger corrective phase higher would then be anticipated.

GBP/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 123.15, Objs: 121.60/118.50/116.50, Stop: 124.40

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 8

EUR/JPY

DAILY TECHNICAL REPORT

26 October, 2011

Consolidates above the 104.96/104.99 floor.

EUR/JPY continues to range just above the 104.96/99 floor, following initial support over the last few sessions. Provided this floor is not breached,
200-day MA

scope is seen for a fresh swing higher to re-test the 107.68 level. However, the larger structure present since 114.18 favours the formation of a lower high close to 108.03, for a return to re-test 100.76. Failure to hold under 108.03 will warn of a larger recovery structure, negating our medium-term bearish bias. Also, if a push over 108.03 can be sustained this will bring into focus a potential false break lower out of a falling channel in the daily timeframe. A move under the annual low would open up an extension to 97.50, ahead

EUR/JPY daily chart, Bloomberg Finance LP

of 92.80, levels not seen since 2000.

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 107.90, Objs: 106.90/104.00/100.00, Stop: 109.00

EUR/JPY hourly chart, Bloomberg Finance LP

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 9

EUR/GBP

DAILY TECHNICAL REPORT

26 October, 2011

Further swing higher anticipated towards 0.8886/85.

EUR/GBP continues to trade close to the 200 day moving average over recent sessions. However, the bigger picture is dominated by the recent failure to hold over the key high at 0.8672. Thus the rise from 0.8530 is
200-day MA

viewed as being a corrective structure with scope for a lower high to form closer to the old 0.8886/85 double top. So, although further short-term

strength may follow, supply is favoured to manifest near 0.8885. 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 EUR/GBP daily chart, Bloomberg Finance LP shown). 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

S-T TREND

L-T TREND

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

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 10

EUR/CHF

DAILY TECHNICAL REPORT

26 October, 2011

Fails to garner momentum close to channel resistance.

200-day MA

EUR/CHF failed to garner momentum after meeting supply close to the resistance of an hourly rising channel. The subsequent weakness is

currently testing the support of this same structure. A failure to find support here would warn of a larger fall back down to the 1.2000 level. Although bullish for the time being, it is expected that the 1.2500-1.3000 zone may limit the current recovery phase from 1.0075. It is anticipated that the markets willingness to trade with the bias of the SNB may exhaust should this trading region be met, as further gains in this cross are likely to become more dependent on economic releases. A sustained move under 1.2024 will alter our near-term bullish bias. EUR/CHF daily chart, Bloomberg Finance LP

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

Await fresh trading signal.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 11

GOLD
GOLD KEY TRIGGER LEVELS
DOWNSIDE: $1600 / $1530 UPSIDE: $1704 / $1844

DAILY TECHNICAL REPORT

26 October, 2011

RISK ZONE III

DOUBLE TOP

Risk of a larger decline beneath $1530.

Exited Final Unit of 1805 SHORT at 1704. Gold remains bearish after its dramatic 20% price fall, which helped confirm the extreme overbought

DEMARK SIGNAL WARNED OF GOLDS OVERBOUGHT CONDITIONS

20% SO FAR

$1704

conditions (marked by DeMark indicators). This also timed a key cycle peak, ahead of that all-important $2000 glass-ceiling. Most concerning is that speculative (net long) flows have recently breached

$1600

34%
$1532 BREAKOUT
200-DMA NOT BROKEN IN 3 YEARS!

a key downside level which may threaten over 2 years of sizeable long gold positions. In price terms, Golds latest 20% bearish slide is still worth less than the largest average drawdown measured since the start of the yellow metals

26%
CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE INTO $1300 & $1040-1000 TREND CHANNEL
(12 YEARS)

long-term bull market in 1999. 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

COT NET LONG SPECULATOR POSITIONS

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.

I
25%
OVER 2 YEARS OF SIZEABLE LONG GOLD POSITIONS UNDER THREAT IF KEY LEVEL BREAKS Please select links for in-depth Gold coverage: Special Report Golds mountainous peak at riskbeneath $1600 MIG Bank Gold Interview on CNBC Squawk Box
(CNBC & BLOOMBERG REPORTS)

VIDEO

MIG Bank Gold Webinar video

II

S-T TREND

L-T TREND

STRATEGY
SHORT 1: 1805, Obj: 1300. Stop: 1704

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

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 12

SILVER
Silver HITS 1980 Spike High!
DEMARK SELL SIGNAL

DAILY TECHNICAL REPORT

26 October, 2011

13

Key support at $26.0700.

Exited at 33.0550. Silvers 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 last April. The move was triggered following a DeMark exhaustion sell signal and

Silver (Daily)

I
DEMARK SELL SIGNAL

200 DMA (36.5125)

II

has now wiped out almost 50% of silvers prior gains (taken from Silvers alltime high at 49.7900) which was last seen in 1980.

KEY SUPPORT (26.0700)

Such a dramatic move traditionally produces volatile trading ranges. This

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 silvers long-

61.8%

(21.5165)

term uptrend and help offer a potential buying opportunity for the eventual resumption higher.

13 YEAR LEVEL
UNWINDING 67% FROM OVERSOLD TERRITORY

Continue to watch the gold-silver mint ratio which has now accelerated 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)

S-T TREND L-T TREND STRATEGY
Exited at 33.0550.

Spot Silver daily, weekly chart and Gold/Silver mint ratio, Bloomberg Finance LP
www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 13

LEGAL TERMS

DAILY TECHNICAL REPORT

26 October, 2011

DISCLAIMER
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 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.

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 Interests
MIG 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 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.

www.migbank.com

14

CONTACT

DAILY TECHNICAL REPORT

26 October, 2011

Howard Friend www.migbank.com Chief Market Strategist [email protected]

Ron William Technical Strategist [email protected]

Bjioy Kar Technical Strategist [email protected]

MIG BANK [email protected] www.migbank.com

14, rte des Gouttes dOr CH-2008 Neuchtel Tel.+41 32 722 81 00 15