2011 10-27 migbank-daily technical-analysis-report

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Forex broker MIG BANK presents the daily forex trading technical report.

Forex broker MIG BANK presents the daily forex trading technical report.

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  • 1. DAILY TECHNICAL REPORT27 October, 2011 Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer. S-TERM L-TERM STRATEGY/ ENTRY OBJECTIVES/COMMENTS STOP MA MULTI-DAY MULTI-WEEK POSITION LEVEL EUR/USD   RK GBP/USD   Awaiting Directional Confirmation. Await fresh signal. ET USD/JPY   Awaiting New Buy Trade Setup. 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   Exited Short at 1.0510. 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   Await fresh signal. GOLD   Awaiting New Sell Trade Setup. SILVER   Awaiting New Sell Trade Setup. 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 entrythe 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 Broker14, 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. EUR/USD DAILY TECHNICAL REPORTEUR/USD 27 October, 2011EUR/USD (Daily) BERMUDA TRIANGLE FAILED Bullish recovery pushes above 1.4000 on positive EU News. BREAKOUTS  EUR/USD’s short-term bullish recovery has pushed above that all-important psychological level at 1.4000 (previous breakout zone). The move was triggered following today’s positive EU news to boost their bailout fund. BIG LEVEL  All-eyes are now watching probes into the long-term 200-day MA at 1.4097. (1.4000) Only a sustained confirmation above here will neutralise the larger bearish downtrend and offer further gains into 1.4220.  Failure to hold above the 200-day MA will warn of an emotionally charged 200-DMA (1.4092) bull-trap and ultimately a sharp downside reversal through 1.3799 (26th Oct TREND th 2 YEARS low) and 1.3653 (18 Oct low), with scope into 1.3146 (Oct swing low).  Watch intermarket relationships across broad risk-related proxies such asEUR/USD daily chart, Bloomberg Finance LP the developed equity markets. The euro currently shares a high correlation USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9% USD INDEX CAD 9.1%, SEK 4.2%, CHF 3.6% (4 YEARS) 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 highs) and is testing initial support at 75.80-55. +19% +10%  Speculative (net long) liquidity flows are temporarily unwinding from their +27% SO FAR recent spike highs (3 standard deviations from the yearly average). This will BREAKOUT ZONE remain strong and help resume the USD’s major bull-run from its historic DEMARK™ BUY SIGNAL oversold extremes (momentum, sentiment and liquidity). 3 STD ABOVE 200-DMA ONE YEAR (75.93) AVERAGE Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410. VIDEO TRIGGER (15000) MIG Bank Webinar: “Why the US dollar is likely to gain up to 30% in 6-12 months.” + 13 KEY SUPPORT MIG Bank US Dollar Interview on Bloomberg DEMARK™ 9 (73.50-73.00) EXTREME NET COT LIQUIDITY US $ SHORTBUY SIGNALS - POSITIONS S-T TREND L-T TREND STRATEGYUSD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP   Awaiting Directional Confirmation. www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 2
  • 3. DAILY TECHNICAL REPORTGBP/USD 27 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.  Strategy is still hampered by a lack of reliable structure, largely due to the 200-day MA 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 theGBP/USD daily chart, Bloomberg Finance LP full participation of GBP/USD. Instead GBP/USD is favoured to remain stronger then most.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. DAILY TECHNICAL REPORTUSD/JPY 27 October, 2011 USD/JPY (Daily POST INTERVENTION1 YEAR) 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.QUAKESHOCK!  These reversal signals are also following the second post intervention 83.30 POST retracement in 2011, which is holding around a multi-week base pattern. It is G7 MOVE also worth noting that our volatility measures remain very low and continue HIGH 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 of the preferred new structural bull-cycle into the all-important psychological HIGH 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 ENDING PIR II the ending diagonal pattern, which was part of a major Elliott Wave cycle. (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. AFTER NEW POST TARGET WWII LOW (75.82) (88-85) 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. - High-Probability Trading Strategies. MONTHLY DEMARK BUY SIGNAL S-T TREND L-T TREND STRATEGYUSD/JPY daily, weekly chart, Bloomberg Finance LP   Awaiting New Buy Trade Setup. www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426 4
  • 5. DAILY TECHNICAL REPORTUSD/CHF 27 October, 2011 Testing its long-term 200 day MA (0.8741).  USD/CHF is now testing its 200-day moving average which is currently at 0.8741, having recently printed a lower high at 0.9083, following the recent 200-day MA 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 again.USD/CHF daily chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGYUSD/CHF hourly chart, Bloomberg Finance LP   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. DAILY TECHNICAL REPORTUSD/CAD 27 October, 2011 USD/CAD (Daily) USD/CAD (Weekly) August High Bears push back into the psychological 1.0000 level. (1.0673)  USD/CAD bears have pushed back into the all-important psychological 1.0000 level (prior trading range).  Only a sustained close beneath here will extend bearish setbacks into the 200-DMA CONFIRMATION long-term 200-day MA at 0.9813. (0.9811) ABOVE 1.0680 OPENS LARGER  Meanwhile, positive momentum needs to push above 1.0264 and 1.0400 to RECOVERY extend the 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 DEMARK™ BUY SIGNAL 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.USD/CAD daily, weekly chart, Bloomberg Finance LPMAJOR RESISTANCE CHF/CAD (Daily)  Elsewhere, EUR/CAD is extending above its 200-day MA, within a large REVERSAL multi-month trading range. Key resistance continues to hold at 1.4379 (June PATTERN 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, 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% (1.3379) 200-DMA (1.1488) (1.3826) 61.8% (1.0893) 200-DMA (1.1265) EUR/CAD (Daily) S-T TREND L-T TREND STRATEGYEUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP   Buy Stop 3: 1.0275, Objs:1.0660/1.0850/1.1110, Stop: 1.0150 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 6
  • 7. DAILY TECHNICAL REPORTAUD/USD 27 October, 2011AUD/USD TD RISK AUD/USD DEMARK™(1 YEAR) SELL SIGNALS (1.1102) (Weekly) Bulls reverse higher above 200-day MA and target 1.0765. (1.0935)  Exited Short at 1.0510. AUD/USD bulls reversed back higher above its 200- STRUCTURAL day MA and is now targeting next resistance at 1.0765 (01st Sept high). LEVEL 38.2%  In terms of the big picture, failure to hold above the 200-day MA will resume (0.9144) 3 YEAR UPTREND downside pressure on the rate’s multi-year uptrend. 50% (0.8546) IS UNDER th th 200-DMA PRESSURE  The bears need to confirm beneath 1.0322 (26 Oct low) and 1.0188 (18 (1.0389) 61.8% (0.7947) Oct low). A break here will unlock sharp setbacks into 1.0000. KEY ZONE  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 AUD/USD daily, weekly chart, Bloomberg Finance LP back above resistance at 80.00. Near-term support continues to hold at AUD/NZD AUD/JPY DEMARK™ 13 (Daily) SELL SIGNAL th (Daily) 77.6350 (18 Oct low). A break here will resume downside scope into 76.7000. 200-DMA CAPS BEAR MKT 38.2% (76.70) 200- DMA 50% (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 AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP   Exited at 1.0510. www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 7
  • 8. DAILY TECHNICAL REPORTGBP/JPY 27 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 bearishGBP/JPY daily chart, Bloomberg Finance LP bias. Should this take place a larger corrective phase higher would then be anticipated. 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. DAILY TECHNICAL REPORTEUR/JPY 27 October, 2011 Consolidates above the 104.75/104.99 floor.  EUR/JPY continues to range just above the 104.75/99 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, aheadEUR/JPY daily chart, Bloomberg Finance LP of 92.80, levels not seen since 2000. 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. DAILY TECHNICAL REPORTEUR/GBP 27 October, 2011 Further swing higher anticipated towards 0.8886/85.  EUR/GBP has broken above its 200-day moving average, which is currently at 0.8727.  The rise from 0.8530 is viewed as being a corrective structure with scope for 200-day MA 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 (notEUR/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. 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. DAILY TECHNICAL REPORTEUR/CHF 27 October, 2011 Fails to garner momentum close to channel resistance.  EUR/CHF failed to garner momentum after meeting supply close to the 200-day MA 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 market’s 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 S-T TREND L-T TRENDEUR/CHF hourly chart, Bloomberg Finance LP   Await fresh trading signal. www.migbank.com Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 11
  • 12. DAILY TECHNICAL REPORTGOLD 27 October, 2011GOLD KEY TRIGGER LEVELSDOWNSIDE: $1600 / $1530 UPSIDE: $1704 / $1844 RISK ZONE III DOUBLE Risk of a larger decline beneath $1530. DEMARK™ SIGNAL TOP 20% WARNED OF GOLD’S  Gold remains bearish after its dramatic 20% price fall, which helped confirm OVERBOUGHT SO FAR CONDITIONS the extreme overbought conditions (marked by DeMark™ indicators). This also timed a key cycle peak, ahead of that all-important $2000 glass-ceiling. $1704  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% positions. $1532  In price terms, Gold’s latest 20% bearish slide is still worth less than the 200-DMA BREAKOUT NOT BROKEN largest average drawdown measured since the start of the yellow metal’s IN 3 YEARS! long-term bull market in 1999. 26%  There is heightened risk of a much larger decline if we confirm a weekly CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE close beneath $1600 and $1554-30 (200-day MA/swing low), which has not INTO $1300 & $1040-1000 been breached in 3 years! TREND CHANNEL  A number of “bargain hunting” trend-followers will be watching this (12 YEARS) benchmark “line in the sand” for repeat support or a potential big squeeze COT NET LONG lower into $1300 and perhaps even $1040-1000. Remember, this would still SPECULATOR POSITIONS offer a unique buying opportunity in the near future. I Please select links for in-depth Gold coverage: 25% Special Report “Gold’s mountainous peak at risk…beneath $1600” VIDEO OVER 2 YEARS OF MIG Bank Gold Interview on CNBC Squawk Box MIG Bank Gold Webinar video SIZEABLE LONG (CNBC & BLOOMBERG REPORTS) GOLD POSITIONS UNDER THREAT IF KEY LEVEL BREAKS II S-T TREND L-T TREND STRATEGYGold weekly, daily chart and COT Liquidity, Bloomberg Finance LP   Awaiting New Sell Trade Setup. www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 12
  • 13. DAILY TECHNICAL REPORTSILVER 27 October, 2011 Silver HITS 1980 Spike High! DEMARK™ SELL SIGNAL 13 Key support at $26.0700. Silver (Daily) I DEMARK™ SELL SIGNALS  Silver’s 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  The move was triggered following a DeMark™ exhaustion sell signal and (36.5125) II 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 SUPPORT  Such a dramatic move traditionally produces volatile trading ranges. This (26.0700) 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 (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 UNWINDING 67% FROM  Continue to watch the gold-silver “mint” ratio which has now accelerated 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 daily, weekly chart and Gold/Silver “mint” ratio, Bloomberg Finance LP   Awaiting New Sell Trade Setup. www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 13
  • 14. LEGAL DAILY TECHNICAL REPORTTERMS 27 October, 2011 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, to MIG BANK and/or its board of directors, executive management and employees may have or buy or sell any investment instrument, to effect any transactions, or to conclude any legal act have had interests or positions on, relevant securities. of any kind whatsoever. The information published and opinions expressed are provided by MIG BANK for personal Copyright use and for informational purposes only and are subject to change without notice. MIG BANK All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or makes no representations (either expressed or implied) that the information and opinions distributed without the express permission of MIG BANK. 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 Notes: Entries are in 3 units and objectives are at 3 separate levels where 1 made solely based on the content. You should obtain advice from a qualified expert before unit will be exited. When the first objective (PT 1) has been hit the stop will be 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. DAILY TECHNICAL REPORTCONTACT 27 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 r.william@migbank.com www.migbank.com Tel.+41 32 722 81 00 h.friend@migbank.com b.kar@migbank.com 15