DAILY TECHNICAL REPORT

07 November, 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 Sell Stop 3 Buy limit 3 LONG 3 SHORT 3 Buy Stop 3 SHORT 2 Buy limit 3 Sell stop 3

ENTRY LEVEL 1.3655 1.5840 78.20 0.9015 1.0250 1.0570 122.70 106.45

OBJECTIVES/COMMENTS

STOP

1.3520/1.3140/1.2860 1.5940/1.6153/1.6400 80.05/82.00/83.30 (Entered 01/11/2011) 0.8900/0.8550/0.8250 (Entered 07/11/2011) 1.0360/1.0480/1.0670 1.0010/0.9710 (Entered 01/11/2011) 124.10/126.00/127.32 105.45/104.00/100.76 Look to sell.

1.3840 1.5740 77.70 0.9130 1.0050 1.0470 121.30 107.50

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

Bijoy Kar, CFA

EUR/CHF GOLD SILVER

WINNER BEST SPECIALIST RESEARCH

Sell stop 3

1.2130

1.2030/1.1526/1.1002 Awaiting New Sell Trade Setup.

1.2230

SHORT 3

34.1300

29.9700/26.0700/23.3400 (Entered 01/11/2011)

35.6880

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 info@migbank.com 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

07 November, 2011

Resuming sharp reversal into 1.3140.

EUR/USD is resuming its sharp reversal from key overhead resistance (primarily an important 2 year trend-line). The dramatic move has confirmed

BREAKOUT ZONE (1.4000)

the emotionally charged bull-trap that we had anticipated, which has been driven by recent positive EU News. Key support is now holding at 1.3653 (18
th

Oct low). A sustained

200-DMA (1.4104)

SHARP REVERSAL AT KEY RESISTANCE TARGETS 1.3000 & 1.2870

confirmation beneath here will unlock further downside scope into 1.3146 (Oct swing low) and that all-important psychological level at 1.3000. Further pressure is also weighing from broad risk-related proxies. The euro

UPTREND (2 YEARS)

currently shares a high correlation of 0.85% with the S&P500 which is now falling sharply from its recent multi-week highs.

EUR/USD daily chart, Bloomberg Finance LP

USD INDEX
200-DMA (75.72)
6 MONTH HIGH
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%

Inversely, USD Index has turned back higher above its long-term 200-day MA. The bulls are likely to recapture the recent 6-month highs near 80. Speculative (net long) liquidity flows are holding steady around their recent spike highs (3 standard deviations from the yearly average). This will likely remain strong and help resume the USDs major bull-run from its historic
+27% +19%
+10%
SO FAR

USD INDEX (4 YEARS)

oversold extremes (momentum, sentiment and liquidity).

Special Report: EUR/USD A Fall From Grace ? Decline Targets 1.3770/1.3410.

BREAKOUT ZONE

VIDEO

DEMARK BUY SIGNAL

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
Sell Stop 3: 1.3655, Objs:1.3520/1.3140/1.2860, Stop: 1.3840

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

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 2

GBP/USD
Support expected close to 1.5853.

DAILY TECHNICAL REPORT

07 November, 2011

A break back over the 1.6167 high would lead us to remove the strategy below from the report. GBP/USD continues to consolidate in what is currently viewed as a larger corrective phase with scope for further swing lower to test the 1.5853 region, where a higher low is favoured to form for a fresh swing back towards 1.6167. We remain wary of the general range bound nature of this market in the medium-term but note that short-term structure is suggestive of further gains, back towards 1.6167. While above 1.5632 further strength is favoured. However, if this region GBP/USD daily chart, Bloomberg Finance LP fails to contain the current corrective phase, then the bias will turn negative again. The view still remains that the large devaluation of GBP versus the USD has already taken place, thus GBP/USD is unlikley to participate fully in any further USD strengthening that may take place. Instead GBP/USD is favoured to remain stronger than most.

GBP/USD hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Buy limit 3 at 1.5840, Objs: 1.5940/1.6153/1.6400, Stop: 1.5740.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 3

USD/JPY
USD/JPY (Daily 1 YEAR)

DAILY TECHNICAL REPORT

07 November, 2011

POST INTERVENTION RETRACEMENT (PIR I)

USD/JPY intervention favours test of 80.00.

Raised stop to 77.70. USD/JPYs latest intervention by the BOJ favours a test of that all-important psychological level at 80.00. This marks the BOJs

QUAKE SHOCK! 83.30

POST G7 MOVE (I) HIGH

third time to officially intervene in the rate this year, after it carved out yet another new post WWII record low at 75.35. Multiple DeMark buy signals were also triggered within the multi-week base pattern which has now broken higher (as had been expected by our low
82.00

volatility measures). The medium/long-term view is more bullish, favouring a sustained move above our initial upside trigger level at 80.00, near 80.24 (post BOJ intervention II high).

POST BOJ MOVE (II) HIGH

80.24

Keep in mind that such a scenario would help reactivate the longer-term
USD/JPY Weekly (2007 2011)

ENDING DIAGONAL PATTERN BREAKOUT TARGET (85-79)

PIR II

POST BOJ MOVE (III) HIGH

technical bias, including prior monthly DeMark exhaustion signals, within 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 the view and extend temporary weakness into 74.55.
Please select the link below to review our MIG Bank webinar on USD/JPY. This is a featured update to our previous Special Report USD/JPYs Long-Term Structural Change - 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

DEMARK BUY SIGNAL AHEAD OF POST WWII LOW (75.35)

S-T TREND

L-T TREND

STRATEGY
LONG 3 at 78.20, Objs: 80.05/82.00/83.30, Stop: 77.70

USD/JPY daily, weekly chart, Bloomberg Finance LP

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426 4

USD/CHF

DAILY TECHNICAL REPORT

07 November, 2011

Continues higher for a re-test of the 61.8% retrace.

USD/CHF has broken back over the prior 0.8960 high, seen in the daily timeframe. This now increases the probability of a re-test of the 61.8% retrace of the 0.9316-0.8568 fall near 0.9000. A lower high would still be expected to form in this region. Medium-term structure is suggestive of a re-test of the zone close to 0.8242 ahead of a possible return to 0.9316. However, should EUR/CHF reach the 1.2000 level again, then movement in USD/CHF may be effected by the efforts of the SNB to maintain the floor in EUR/CHF. Back under 0.7712 is required to change the medium-term bullish bias. A sustained push back over 0.9083 will immediately open up a return USD/CHF daily chart, Bloomberg Finance LP towards the recent high at 0.9316. Safe haven flows may yet intensify into the Swiss Franc as Italian government bond yields push higher despite last weeks ECB rate cut. See our EUR/CHF page for more on this.

USD/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Short 3 at 0.9015, Objs: 0.8900/0.8550/0.8250, Stop: 0.9130.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 5

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

DAILY TECHNICAL REPORT

07 November, 2011
USD/CAD (Weekly)

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 push above 1.0264 and 1.0400 to rebuild the potential major upside reversal higher above the old resistance level at

200-DMA (0.9817)

CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY

1.0673 (August high & Congestion zone). Only a sustained close beneath here will unlock bearish setbacks into the long-term 200-day MA at 0.9817 and 0.9726 (31 Aug low). A strong directional confirmation above here will open a much larger
st

DEMARK BUY SIGNAL

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. EUR/CAD is extending above its 200-day MA, within a large multi-month

USD/CAD daily, weekly chart, Bloomberg Finance LP

MAJOR RESISTANCE

CHF/CAD (Daily)
REVERSAL PATTERN

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 1.1314, 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 (1.3841)

(1.3379)

(1.1488)

61.8%

(1.0893)
200-DMA (1.1314)

EUR/CAD (Daily)

S-T TREND

L-T TREND

STRATEGY
Buy Stop 3: 1.0250, Objs:1.0360/1.0480/1.0670, Stop: 1.0050

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

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 6

AUD/USD
AUD/USD
(1 YEAR)
DEMARK SELL SIGNALS

DAILY TECHNICAL REPORT

07 November, 2011
AUD/USD
(Weekly)

Sharp setbacks weigh.

Lowered stop to 1.0470. AUD/USDs sharp setbacks continue to weigh. The move was triggered from key resistance at 1.0765 (01st Sept high) and is
STRUCTURAL LEVEL

now holding beneath the 200-day MA (1.0415).

3 YEAR UPTREND IS UNDER PRESSURE

38.2%

(0.9144)
50%

A sustained move below here is likely to mount 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.
th th

(0.8546)
200-DMA (1.0415)

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 reversed gains against the Japanese yen and is now
13

trading back below the long-term 200-day MA which is currently at 83.11. Near-term support continues to hold at 77.63 (18 Oct low). A break here will resume downside scope into 76.70 and signal further unwinding of risk appetite.
th

200-DMA CAPS BEAR MKT 38.2%

(76.70)
50%

200DMA (83.12)

(72.58)
61.8%

(68.47)

RESUMPTION OF BREAKDOWN ADDS TO RISK AVERSION

KEY SUPPORT 1.2319 / 1.2100

S-T TREND

L-T TREND

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

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

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 7

GBP/JPY

DAILY TECHNICAL REPORT

07 November, 2011

Consolidates within a flag structure.

GBP/JPY continues to consolidate within the confines of a falling hourly channel, potentially forming a flag structure. Given the nature of the rise last week, which was triggered by a series of clustered stops, there remains an expectation of a return to the 122.38/65 region, ahead of further strength. Bigger picture a rise towards 129.00/130.00 is possible, given the daily structure present since 116.84. A push back under 121.39 is needed to negate this positive structure. Assuming that further short-term strength can be realised, a lower high would be anticipated close to 129.00, near the 200 day moving average which is currently at 128.79. Thus the region between 129.00 and 130.00 GBP/JPY daily chart, Bloomberg Finance LP would be attractive for renewed short positioning. In the meantime, a higher low may form close to the old 122.38/65 ceiling, with a short-term swing back into the 129.00-130.00 region in mind.

GBP/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Buy limit 3 at 122.70, Objs: 124.10/126.00/127.32, Stop: 121.30

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 8

EUR/JPY

DAILY TECHNICAL REPORT

07 November, 2011

Break under 106.50 opens up a return towards 104.75.

A push back over 108.25 will lead us to remove the strategy below from the Daily Technical Report. EUR/JPY appears to be forming a corrective structure in the hourly timeframe, with scope now for a return to and break under 106.50. This would then open up a return to 104.75 and potentially lower. If a push under 106.50 can be realised, this would warn of a larger corrective structure off the recent 111.60 high. An earlier push back over 108.25 will however be suggestive of a larger recovery higher from 104.75, with a return to 111.60 then possible. Should the region near 112.50 be met a lower high would be favoured to EUR/JPY daily chart, Bloomberg Finance LP form in that region, close to the 200 day moving average, currently at 112.54. A sustained hold over the 200 day moving average will turn the outlook bullish.

EUR/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell stop 3 at 106.45, Objs: 105.45/104.00/100.76, Stop: 107.50

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 9

EUR/GBP

DAILY TECHNICAL REPORT

07 November, 2011

A break under 0.8530/31 will weaken longer-term outlook.

EUR/GBP has seen a break lower again today to test long-term trend-line resistance from 0.8068. A push under 0.8548 is expected which will

immediately target the 0.8530/31 double bottom that we have discussed in recent reports. A sustained break under 0.8530 will weaken the longer-term outlook considerably, ending the general range bound trade that we have witnessed thus far. Scope would then be seen for a return back down to 0.8068, over time. In fact, should stresses in the Euro Zone intensify then it is possible that Sterling may gain safe haven status, with scope then for a return to 0.8068 over coming weeks. Failure to break the floor of the medium-term range will warn of a return back towards 0.8831 where short positioning would become attractive EUR/GBP daily chart, Bloomberg Finance LP again. 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
Look to sell if a break under 0.8530 can be realised.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 10

EUR/CHF

DAILY TECHNICAL REPORT

07 November, 2011

Approaches the 1.2500 region where resistance is expected.

EUR/CHF has gained a minor degree of support following the 25 basis point rate cut by the ECB. However, we note today, that Italian 10 year yields are trading above 6.60% for the first time since 1997. If this move can be

maintained over the coming days, the pressures in the Euro zone are likely to intensify considerably, as it will be viewed that the ECB is essentially powerless to contain the upside pressure on Italian government bond yields. This is likely to lead to a renewed desire for a safe haven with downside pressure returning to EUR/CHF. 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. EUR/CHF weekly chart, Bloomberg Finance LP In any case, strong resistance is anticipated should this rate reach the 1.2500 zone. The recent failure to maintain trade above the 50 week

moving average is also noted. Time will tell whether or not 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.

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

www.migbank.com

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

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 11

GOLD
GOLD KEY TRIGGER LEVELS
DOWNSIDE: $1600 / $1530 UPSIDE: $1760 / $1844

DAILY TECHNICAL REPORT

07 November, 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 Bloomberg Countdown CNBC Squawk Box
(BLOOMBERG & CNBC 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: r.william@migbank.com, Phone: +41 32 7228 454 12

SILVER
Silver HITS 1980 Spike High! Silver (Daily)
DEMARK SELL SIGNALS DEMARK SELL SIGNAL

DAILY TECHNICAL REPORT

07 November, 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. The move was triggered following a DeMark exhaustion sell signal and

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%

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-

(26.9150)

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

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

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 13

LEGAL TERMS

DAILY TECHNICAL REPORT

07 November, 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

07 November, 2011

Howard Friend www.migbank.com Chief Market Strategist h.friend@migbank.com

Ron William Technical Strategist r.william@migbank.com

Bjioy Kar Technical Strategist b.kar@migbank.com

MIG BANK info@migbank.com www.migbank.com

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