DAILY TECHNICAL REPORT
28 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
Sell limit 3 SHORT 3 Sell limit 3 123.15 107.90 0.8870 LONG 3 Buy Stop 3 0.8600 1.0275
Awaiting Directional Confirmation. Await fresh signal. Awaiting New Buy Trade Setup. 0.9000/0.9200/0.9316 (Entered 28/10/2011) 1.0660/1.0850/1.1110 Awaiting New Sell Trade Setup. 121.60/118.50/116.50 106.90/104.00/100.00 (Entered 28/10/2011) 0.8750/0.8580/0.8400 Await fresh signal. Awaiting New Sell Trade Setup. Awaiting New Sell Trade Setup. 124.40 109.00 0.8970 0.8500 1.0150
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
28 October, 2011
Bullish recovery holds above 200-day MA (1.4101).
EUR/USDs short-term bullish recovery is holding steady above the longterm 200-day MA at 1.4101, following the recent positive EU news. The move has temporarily neutralised the larger bearish downtrend from April.
BREAKOUT ZONE (1.4000)
Failure to hold above the 200-day MA will warn of an emotionally charged bull-trap and ultimately a sharp downside reversal through 1.3799 (26th Oct low) and 1.3653 (18 Oct low), with scope into 1.3146 (Oct swing low). Watch intermarket relationships across broad risk-related proxies such as
th
200-DMA (1.4101) TREND 2 YEARS
the developed equity markets. The euro currently shares a high correlation of 0.85% with the S&P500 which has just climbed to an 8-week high. Inversely, the USD Index is continuing to retrace (from its recent 6-month
EUR/USD daily chart, Bloomberg Finance LP
USD INDEX
200-DMA (75.75)
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%
highs) and is likely to find support at 74.10 and 73.40. Speculative (net long) liquidity flows are also temporarily unwinding from their recent spike highs (3 standard deviations from the yearly average). This will remain strong and help resume the USDs major bull-run from its historic oversold extremes (momentum, sentiment and liquidity).
+27% +19%
+10%
SO FAR
USD INDEX (4 YEARS)
Special Report: EUR/USD A Fall From Grace ? Decline Targets 1.3770/1.3410.
BREAKOUT ZONE
DEMARK BUY SIGNAL
VIDEO
MIG Bank Webinar: Why the US dollar is likely to gain up to 30% in 6-12 months. MIG Bank US Dollar Interview on Bloomberg
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 Directional Confirmation.
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
28 October, 2011
Larger recovery back into 200-day MA (1.6137).
GBP/USD is continuing a larger recovery phase back towards the 200-day MA which is currently at 1.6137. However, the 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.
200-day MA
A sustained break under 1.5632 is now required to increase the probability of a lasting lower high. GBP/USD has already experienced a large devaluation versus the US Dollar, therefore 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. GBP/USD daily chart, Bloomberg Finance LP
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
28 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 above our initial upside trigger level at 77.68. This would offer a resumption
POST BOJ MOVE HIGH
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
DAILY TECHNICAL REPORT
28 October, 2011
Breaking below its long-term 200 day MA (0.8735).
USD/CHF has now broken below its 200-day moving average which is currently at 0.8735, having recently printed a lower high at 0.9083, following
200-day MA
the recent break under 0.8881. 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 0.8927. 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
USD/CHF daily chart, Bloomberg Finance LP
again.
S-T TREND
L-T TREND
STRATEGY
LONG 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
28 October, 2011
USD/CAD (Weekly)
Bears push back under the psychological 1.0000 level.
USD/CADs short-term price activity remains negative, as the bears push back under the all-important psychological 1.0000 level (prior trading range). Only a sustained close beneath here will extend bearish setbacks into the
200-DMA (0.9811)
CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY
long-term 200-day MA at 0.9813 and 0.9726 (31 Aug low). Only a close beneath here will change the long-term positive view and encourage a sell trade setup in our model portfolio. Meanwhile, positive momentum needs to push above 1.0264 and 1.0400 to rebuild the potential major upside reversal higher above the old resistance
st
DEMARK BUY SIGNAL
level at 1.0673 (August high & Congestion zone). A strong directional confirmation above here will open a much larger
USD/CAD daily, weekly chart, Bloomberg Finance LP
MAJOR RESISTANCE CHF/CAD (Daily) REVERSAL PATTERN
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. 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 1.1265,
50%
(1.3570)
61.8% 50%
following the dramatic price slide lower (triggered by the SNB intervention). The cross-rate has now retraced more than half of its 2011 gains.
200-DMA (1.3826)
(1.3379)
(1.1488)
61.8%
(1.0893)
200-DMA (1.1265)
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
DAILY TECHNICAL REPORT
28 October, 2011
AUD/USD
(Weekly)
Resistance at 1.0765 is likely to cap.
AUD/USDs explosive rally is currently unwinding from overbought
STRUCTURAL LEVEL
conditions, ahead key resistance at 1.0765 (01st Sept high). This level is likely to cap gains back into the 200-day MA (1.0402) and
3 YEAR UPTREND IS UNDER PRESSURE
38.2%
(0.9144)
50%
potentially resume downside pressure on the rates multi-year uptrend. The bears need to confirm beneath 1.0322 (26 Oct low) and 1.0188 (18 Oct low). A break here will unlock sharp setbacks into 1.0000. 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 is also gaining against the Japanese yen, after pushing
th th
(0.8546)
200-DMA (1.0402)
61.8%
(0.7947) KEY ZONE
AUD/USD daily, weekly chart, Bloomberg Finance LP
AUD/NZD (Daily) AUD/JPY (Daily)
DEMARK SELL SIGNAL
back above resistance at 80.00. Near-term support continues to hold at
13
77.63 (18 Oct low). A break here will resume downside scope into 76.70.
th
200-DMA CAPS BEAR MKT 38.2%
(76.70)
50%
200DMA (83.15)
(72.58)
61.8%
(68.47)
BREAKDOWN ADDS TO RISK AVERSION
KEY SUPPORT 1.2319 / 1.2100
S-T TREND
L-T TREND
STRATEGY
Awaiting New Sell Trade setup.
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
28 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 120.00. This is suggestive of the potential for a further recovery leg higher
200-day MA
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
Testing the 107.68 level.
DAILY TECHNICAL REPORT
28 October, 2011
EUR/JPY is currently tested the 107.68 (17 Oct high) level after pushing higher from its range just above the 104.75/99 floor. Provided this floor is
200-day MA
th
not breached, scope is seen for a fresh swing higher. 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
SHORT 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
28 October, 2011
Further swing higher anticipated towards 0.8886/85.
EUR/GBP is still holding above its 200-day moving average, which is currently at 0.8727.
200-day MA
The rise from 0.8530 is 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
28 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: $1760 / $1844
DAILY TECHNICAL REPORT
28 October, 2011
RISK ZONE III
DOUBLE TOP
Risk of a larger decline beneath $1530.
Gold remains bearish after its dramatic 20% price fall, which helped confirm the extreme overbought conditions (marked by DeMark indicators). This
DEMARK SIGNAL WARNED OF GOLDS OVERBOUGHT CONDITIONS
20% SO FAR
$1760 $1704
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 a key downside level which may threaten over 2 years of sizeable long gold
$1600
34%
$1532
BREAKOUT 200-DMA NOT BROKEN IN 3 YEARS!
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 long-term bull market in 1999.
26%
CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE INTO $1300 & $1040-1000 TREND CHANNEL
(12 YEARS)
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
COT NET LONG SPECULATOR POSITIONS
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:
I
25%
OVER 2 YEARS OF SIZEABLE LONG GOLD POSITIONS UNDER THREAT IF KEY LEVEL BREAKS
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
Awaiting New Sell Trade Setup.
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! Silver (Daily)
DEMARK SELL SIGNALS DEMARK SELL SIGNAL
DAILY TECHNICAL REPORT
28 October, 2011
13
Key support at $26.0700.
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.
200 DMA (36.5125)
II
The move was triggered following a DeMark exhaustion sell signal and 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)
38.2%
Such a dramatic move traditionally produces volatile trading ranges. This allows the market to have enough time to recover and accumulate renewed buying interest.
(32.3135)
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) 13 YEAR LEVEL
UNWINDING 67% FROM OVERSOLD TERRITORY
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.
OVER
30 YEAR BASE PATTERN
BULL MARKET FROM 1999
Silver Monthly (since 1980)
S-T TREND L-T TREND STRATEGY
Awaiting New Sell Trade Setup.
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
28 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
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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
28 October, 2011
Howard Friend www.migbank.com Chief Market Strategist [email protected]
14, rte des Gouttes dOr CH-2008 Neuchtel Tel.+41 32 722 81 00 15
