2011 10-18 migbank-daily technical-analysis-report


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2011 10-18 migbank-daily technical-analysis-report

  1. 1. DAILY TECHNICAL REPORT18 October, 2011 Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer. M S-TERM MULTI-DAY L-TERM MULTI-WEEK STRATEGY/ POSITION ENTRY LEVEL OBJECTIVES/COMMENTS STOP EUR/USD Sell Stop 3 1.3660 1.3340/1.3000/1.2860 1.3910 GBP/USD Await fresh signal. USD/JPY LONG 3 77.20 80.20/81.50/83.30 (Entered 25/08/2011) 75.90 USD/CHF Buy limit 3 0.8600 0.9000/0.9200/0.9316 0.8500 Ron William, CMT, MSTA USD/CAD Buy Stop 3 1.0275 1.0660/1.0850/1.1110 1.0150 AUD/USD Sell Stop 3 1.0090 0.9930/0.9620/0.9380 1.0290 GBP/JPY Sell limit 3 123.15 121.60/118.50/116.50 124.40 EUR/JPY Sell limit 3 107.90 106.90/104.00/100.00 109.00 EUR/GBP Sell limit 3 0.8870 0.8750/0.8580/0.8400 0.8970 Bijoy Kar, CFA EUR/CHF Buy limit 3 1.2205 1.2280/1.2380/1.2500 1.2120 GOLD SHORT 1 1805 1300 (Entered 12/09/2011) 1704 SILVER Sell Stop 3 31.8150 28.4300/26.0700/23.3400 33.0550 WINNER BEST SPECIALIST RESEARCHDISCLAIMER & DISCLOSURESPlease read the disclaimer and thedisclosures which can be found at 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 the end of this report 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.MIG BANK / Forex Broker 14, rte des Gouttes d’Or CH-2008 Neuchâtel SwitzerlandTel +41 32 722 81 00 Fax +41 32 722 81 01 info@migbank.com www.migbank.com
  2. 2. EUR/USD DAILY TECHNICAL REPORTEUR/USD 18 October, 2011 EUR/USD (Daily) BERMUDA TRIANGLE Sharp setbacks below resistance at 1.3937. FAILED BREAKOUTS EUR/USD’s short-term recovery (worth almost 6%) has been capped below resistance at 1.3937. As expected, Euro weakness has been further helped by a broad sell-off across developed equity markets and correlated “risk” proxies. BIG LEVEL (1.4000) The bears still need to confirm a meaningful confirmation beneath that all- important psychological level at 1.3000 to unlock further scope into 1.2860 (near 2011 low) and even further. 200-DMA IMPULSIVE (WAVE 3) Key resistance remains at 1.3937 (15th Sept high), which is near the (1.4078) TREND DECLINE TARGETS previous breakout zone at 1.4000. Confirmation above here will neutralise 2 YEARS (1.4000) 1.3000 & 1.2870 the status quo.EUR/USD daily chart, Bloomberg Finance LP Inversely, the US dollar remains strong as most other popular “risk” USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9%, USD INDEX (4 YEARS) 200-DMA CAD 9.1%, SEK 4.2%, CHF 3.6% markets weaken from overcrowded uptrends. Short-term price activity (75.87) continues is now reversing back higher from the previous breakout zone at 76.40. +19% +10% Speculative (net long) liquidity flows are maintaining their spike above our +27% SO FAR trigger level of 15000 contracts and is holding at 3 standard deviations BREAKOUT ZONE DEMARK™ from the yearly average. This will help sustain the bull-run from historic BUY SIGNAL oversold extremes (momentum, sentiment and liquidity). 3 STD ABOVE ONE YEAR AVERAGE Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410.  VIDEO TRIGGER MIG Bank Webinar:  “Why the US dollar is likely to gain up to 30% in 6‐12 months.”  (15000) + MIG Bank US Dollar Interview on Bloomberg  DEMARK™ 13 9 KEY SUPPORT EXTREME NET COT LIQUIDITY US $ SHORT (73.50-73.00) BUY SIGNALS - POSITIONS S-T TREND L-T TREND STRATEGYUSD Index daily and weekly chart, with COT liquidity, Bloomberg Finance LP Sell Stop 3: 1.3660, Objs: 1.3340/1.3000/1.2860, Stop: 1.3910 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 2
  3. 3. DAILY TECHNICAL REPORTGBP/USD 18 October, 2011 Meets initial resistance close to the 38.2% retrace. GBP/USD has tested the 38.2% retrace of the 1.6747-1.5272 fall over two sessions and failed to close above it. This may signal the beginning of a possible reversal back lower. However, further evidence is required ahead of trade formulation. We look to see if the region near 1.5781 can continue to contain price from breaking yet higher. A stronger reversal pattern or a combination of factors is required to activate a short bias. In particular a break under 1.5716 is required. The longer-term price action has been largely range bound making directional views hard to decipher. A continuation of range bound trade would lead to an expectation of a larger recovery phase, back towards theGBP/USD daily chart, Bloomberg Finance LP 200 day moving average. Structure remains elusive currently, so standing on the sidelines is deemed best for now. It is anticipated that 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, given the large depreciation of Sterling versus the US Dollar that took place in 2008.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: b.kar@migbank.com, Phone: +41 32 7228 424 3
  4. 4. DAILY TECHNICAL REPORTUSD/JPY 18 October, 2011 USD/JPY POST INTERVENTION USD/JPY is still basing around its all-time low. (Daily RETRACEMENT (PIR I)1 YEAR) USD/JPY is maintaining a confluence of DeMark™ exhaustion bullish signals, after the new post WWII record low which was carved out at 75.95.QUAKESHOCK! These reversal signals are also following the second post intervention 83.30 retracement in 2011, which is holding around a multi-week base pattern. It POST is also worth noting that our volatility measures remain very low and G7 MOVE HIGH 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 POST BOJ resumption of the preferred new structural bull-cycle into the all-important MOVE HIGH 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 PIR II the ending diagonal pattern, which was part of a major Elliott Wave cycle. USD/JPY Weekly ENDING (2007 – 2011) DIAGONAL Only a sustained weekly close below 76.25 will lead to a reassessment of PATTERN BREAKOUT DEMARK™ BUY SIGNAL the view and extend temporary weakness into 74.55. TARGET AFTER NEW POST (88-85) WWII LOW (75.95) 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/JPY’s 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.  MONTHLY DEMARK ‐ High‐Probability Trading Strategies.  BUY SIGNALWAVE 5 S-T TREND L-T TREND STRATEGYUSD/JPY daily and weekly charts, Bloomberg Finance LP Long 3 at 77.20, Obj: 80.20/81.50/83.30, Stop: 75.90 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426 4
  5. 5. DAILY TECHNICAL REPORTUSD/CHF 18 October, 2011 Under 0.9039 and 0.9123 warns of further weakness. USD/CHF is consolidating under the old support of an hourly channel. Scope is still seen for a continuation of weakness to potentially target the 0.8600 region where a higher low may form. The expectation of further weakness is also supported by the structure present since 0.9316, which is suggestive of a continuation of weakness. This scenario will be weakened on a push over 0.9039 and then 0.9123. It is also noted that the current trading region is close to the location of the 50 week moving average, currently at 0.8951. Thus, a continuation of weakness would also warn of a breakdown of the recent recovery structure. However, it is noted that back under 0.7712 is required toUSD/CHF daily chart, Bloomberg Finance LP change the long-term bullish bias.USD/CHF hourly 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 www.migbank.com Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 5
  6. 6. DAILY TECHNICAL REPORTUSD/CAD 18 October, 2011 USD/CAD (Daily) USD/CAD (Weekly) Bulls reverse higher from the psychological 1.0000 level. August High (1.0673) USD/CAD bulls are reversing higher from that all-important 1.0000 level (psychological level and prior trading range). Positive momentum needs to push above 1.0400 to extend the recovery 200-DMA CONFIRMATION higher above the old resistance level at 1.0673 (August high & Congestion (0.9807) ABOVE 1.0680 zone). OPENS LARGER RECOVERY A strong directional confirmation above here will open a much larger 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. DEMARK™ BUY SIGNAL Meanwhile, only a sustained close beneath 1.0100 will extend bearish setbacks into next the support level at 0.9750.USD/CAD daily and weekly chart, Bloomberg Finance LPMAJOR RESISTANCE CHF/CAD (Daily) Elsewhere, EUR/CAD is extending above its 200-day MA, within a large REVERSAL PATTERN 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 1.1227, following the dramatic price slide lower (triggered by the SNB 50% (1.3570) intervention). The cross-rate has now retraced more than half of its 2011 61.8% (1.3379) 50% gains. 200-DMA (1.1488) (1.3769) 61.8% (1.0893) 200-DMA (1.1227) EUR/CAD (Daily) S-T TREND L-T TREND STRATEGY Buy Stop 3: 1.0275, Obj:1.0660/1.0850/1.1110, Stop: 1.0150EUR/CAD and CHF/CAD daily charts, Bloomberg Finance LP www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 6
  7. 7. DAILY TECHNICAL REPORTAUD/USD 18 October, 2011AUD/USD DEMARK™ TD RISK(1 YEAR) (1.1102) SELL SIGNALS (1.0935) Sharp reversal beneath 200-day MA at 1.0382. AUD/USD’s bullish recovery has reversed sharply beneath the long-term STRUCTURAL LEVEL 200-day MA which is currently holding at 1.0382. Expect this area to cap 38.2% further into the rate’s psychological level at 1.0000. (0.9144) 3 YEAR 50% UPTREND In terms of the big picture, AUD/USD’s multi-year uptrend remains under (0.8546) IS UNDER 200-DMA PRESSURE pressure since the previous breakdown. The bears need to confirm (1.0381) 61.8% KEY (0.7947) beneath 0.9388 (04th Oct low & structural level) to unlock a much larger ZONE 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 andAUD/USD daily and weekly chart, Bloomberg Finance LP 1.2100.AUD/NZD AUD/JPY DEMARK™ 13 (Daily) (Daily) SELL SIGNAL The Aussie dollar is also weakening against the Japanese yen, after failing into resistance at 79.92. Watch for a resumption of the major downtrend 200-DMA CAPS from spring 2011. Strong downside scope will signal further unwinding of BEAR MKT global risk appetite. 38.2% (76.70) 200- DMA 50% (83.28) (72.58) 61.8% (68.47) BREAKDOWN ADDS TO RISK AVERSION KEY SUPPORT 1.2319 / 1.2100 S-T TREND L-T TREND STRATEGYAUD/NZD and AUD/JPY daily charts, Bloomberg Finance LP Sell Stop 3: 1.0090, Objs: 0.9930/0.9620/0.9380, Stop: 1.0290 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 7
  8. 8. DAILY TECHNICAL REPORTGBP/JPY 18 October, 2011 A further leg higher remains possible while above 120.34. GBP/JPY met initial resistance yesterday close to 123.00. However while above 120.34 a further test of 123.31 remains possible, where a lower high would be favoured to form. Sustained under 120.34 in the hourly timeframe will end hopes of a return towards 123.00. In the meantime, 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 bias. Should this take place a larger corrective phase higher would then be anticipated.GBP/JPY daily chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGYGBP/JPY hourly chart, Bloomberg Finance LP 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: b.kar@migbank.com, Phone: +41 32 7228 424 8
  9. 9. DAILY TECHNICAL REPORTEUR/JPY 18 October, 2011 Further leg higher possible back to 107.68. EUR/JPY met 107.68 yesterday from where a corrective swing lower is currently taking place. Provided price can remain above the 104.96/99 floor there remains an expectation of a further swing higher to re-test the 108.03 key low. Given the structure present since 114.18 it is still favoured that a lower high will form, with potential then 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. Under the annual low would open up an extension to 97.50, ahead of 92.80, levels not seen since 2000.EUR/JPY daily chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGYEUR/JPY hourly chart, Bloomberg Finance LP Sell limit 3 at 107.90, Objs: 106.90/104.00/100.00, Stop: 109.00 www.migbank.com Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 9
  10. 10. DAILY TECHNICAL REPORTEUR/GBP 18 October, 2011 Strength towards 0.8886/85 ahead of potential supply. 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 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. As mentioned in recent reports, 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 periodEUR/GBP daily chart, Bloomberg Finance LP similar to that between 2003 and 2007 (not shown). S-T TREND L-T TREND STRATEGYEUR/GBP hourly chart, Bloomberg Finance LP 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: b.kar@migbank.com, Phone: +41 32 7228 424 10
  11. 11. DAILY TECHNICAL REPORTEUR/CHF 18 October, 2011 Test of hourly channel support remains possible. Long strategy raised to 1.2205. EUR/CHF has once again lapsed into a tight hourly range, with a break-out now sought. An eventual re-test of 1.2435 is expected, however, a test of hourly channel support cannot be ruled out near-term. Medium-term, scope is seen for a test of the region between 1.2500 and 1.3000, given the sustained move over the 200 day moving average. Immediate focus is on the 50 week moving average (currently at 1.2452). 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 exhaustEUR/CHF daily chart, Bloomberg Finance LP 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. S-T TREND L-T TRENDEUR/CHF hourly chart, Bloomberg Finance LP Buy limit 3 at 1.2205, Objs: 1.2280/1.2380/1.2500, Stop: 1.2120. www.migbank.com Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 11
  12. 12. DAILY TECHNICAL REPORTGOLD 18 October, 2011GOLD KEY TRIGGER LEVELS RISK ZONE III RISK (1935)DOWNSIDE: $1600 / $1530 UPSIDE: $1935 / $2000 RISK of a larger decline beneath $1600. DEMARK™ SIGNAL 20% WARNED OF GOLD’S Gold remains bearish after its dramatic 20% price fall, which helped OVERBOUGHT CONDITIONS SO FAR WHICH LED TO A confirm the extreme overbought conditions (marked by DeMark™ $200 DROP IN 3 DAYS! indicators). This also timed a key cycle peak, ahead of that all-important $1704 $2000 glass-ceiling. Most concerning is that speculative (net long) flows have recently breached $1600 34% a key downside level which may threaten over 2 years of sizeable long gold $1532 positions. BREAKOUT 200-DMA NOT BROKEN In price terms, Gold’s latest 20% bearish slide is still worth less than the IN 3 YEARS! largest average drawdown measured since the start of the yellow metal’s 26% long-term bull market in 1999. BIGGEST DRAWDOWNS 34% (2008) There is heightened risk of a much larger decline if we confirm a weekly 26% (2006) close beneath $1600 and $1547 (200-day MA), which has not been TREND 25% (1999) CHANNEL breached in 3 years! AVERAGE = 28% (12 YEARS) A number of “bargain hunting” trend-followers will be watching this COT NET LONG benchmark “line in the sand” for repeat support or a potential big squeeze SPECULATOR POSITIONS lower into $1300 and perhaps even $1040-1000. Remember, this would still offer a unique buying opportunity in the near future. I 25% Please select links for in-depth Gold coverage: OVER 2 YEARS OF SIZEABLE LONG Special Report “Gold’s mountainous peak at risk…beneath $1600” VIDEO GOLD POSITIONS UNDER THREAT MIG Bank Gold Interview on CNBC Squawk Box MIG Bank Gold Webinar video (CNBC & BLOOMBERG REPORTS) IF KEY LEVEL BREAKS II S-T TREND L-T TREND STRATEGYGold, weekly, daily chart and COT Liquidity measures, Bloomberg Finance LP SHORT 1: 1805, Objs: 1300. Stop: 1704 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 12
  13. 13. DAILY TECHNICAL REPORTSILVER 18 October, 2011 Silver HITS 1980 Spike High! DEMARK™ SELL SIGNAL 13 KEY support at $26.0700. I Silver’s latest price capitulation is a painful reminder to the investment Silver DEMARK™ (Daily) SELL SIGNAL community that lightning can strike twice. Note, this marks the second time silver has crashed, following its 30% fall from April this year. The move was triggered following a DeMark™ exhaustion sell signal and II 200 DMA (36.5125) has now wiped out almost 50% of silver’s prior gains (taken from Silver’s all-time high at 49.7900) which was last seen in 1980. KEY Such a dramatic move traditionally produces volatile trading ranges. This SUPPORT 38.2% (26.0700) (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 (26.9150) multi-week/month horizon, with downside macro risk into $21.5165 (61.8% Fib-1999 bull market) and $20.0000. This would still maintain silver’s long- 61.8% (21.5165) term uptrend and help offer a potential buying opportunity for the eventual resumption higher. 13 YEAR LEVEL Continue to watch the gold-silver “mint” ratio which has now accelerated UNWINDING 67% FROM OVERSOLD TERRITORY higher by 67%, suggesting further risk aversion over the next few weeks. OVER 30 YEAR BASE PATTERN BULL MARKET FROM 1999Silver Monthly (since 1980) S-T TREND L-T TREND STRATEGYSpot Silver monthly, daily chart and gold-silver “mint” ratio, Bloomberg Finance LP Sell Stop 3: 31.8150, Obj: 28.4300/26.0700/23.3400, Stop: 33.0550 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 13
  14. 14. LEGAL DAILY TECHNICAL REPORT 18 October, 2011TERMS Limitation of liability DISCLAIMER MIG BANK disclaims, without limitation, all liability for any loss or damage of any kind, including any direct, indirect or consequential damages. Material Interests No information published constitutes a solicitation or offer, or recommendation, or advice, MIG BANK and/or its board of directors, executive management and employees may have to buy or sell any investment instrument, to effect any transactions, or to conclude any legal or have had interests or positions on, relevant securities. act of any kind whatsoever. Copyright 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 All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or BANK makes no representations (either expressed or implied) that the information and distributed without the express permission of MIG BANK. 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 Notes: Entries are in 3 units and objectives are at 3 separate levels where 1 decisions be made solely based on the content. You should obtain advice from a qualified unit will be exited. When the first objective (PT 1) has been hit the stop will be expert before making any investment decision. moved to the entry point for a near risk-free trade. When the second objective All opinion is based upon sources that MIG BANK believes to be reliable but they have no (PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All guarantees that this is the case. Therefore, whilst every effort is made to ensure that the orders are valid until the next report is published, or a trading strategy alert is content is accurate and complete, MIG BANK makes no such claim. sent between reports.     www.migbank.com 14
  15. 15. DAILY TECHNICAL REPORTCONTACT 18 October, 2011   Howard Friend Ron William MIG BANK 14, rte des Gouttes d’Or www.migbank.com Bjioy Kar Chief Market Strategist Technical Strategist info@migbank.com CH-2008 Neuchâtel Technical Strategist h.friend@migbank.com r.william@migbank.com www.migbank.com Tel.+41 32 722 81 00 b.kar@migbank.com 15