2011 11-02 migbank-daily technical-analysis-report


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2011 11-02 migbank-daily technical-analysis-report

  1. 1. DAILY TECHNICAL REPORT02 November, 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 SHORT 1 1.3950 1.3470 (Entered 01/11/2011) 1.3840 GBP/USD Buy limit 3 1.5840 1.5940/1.6153/1.6400 1.5740 USD/JPY LONG 3 78.20 80.05/82.00/83.30 (Entered 01/11/2011) 76.50 USD/CHF LONG 3 0.8600 All three objectives to 0.9000 (Entered 28/10/2011) 0.8800 Ron William, CMT, MSTA USD/CAD LONG 3 1.0050 1.0270/1.0660/1.0850 (Entered 01/11/2011) 0.9890 AUD/USD SHORT 3 1.0570 1.0230/1.0010/0.9710 (Entered 01/11/2011) 1.0750 GBP/JPY Buy limit 3 122.70 124.10/126.00/127.32 121.30 EUR/JPY Await fresh signal. EUR/GBP Look to sell higher. Bijoy Kar, CFA EUR/CHF Await fresh signal. GOLD SHORT 3 1710 1600/1530/1300 (Entered 01/11/2011) 1760 SILVER SHORT 3 34.1300 29.9700/26.0700/23.3400 (Entered 01/11/2011) 35.6880 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 02 November, 2011EUR/USD (Daily) BERMUDA TRIANGLE FAILED BREAKOUTS Sharp reversal targets 1.3000. EUR/USD has extended its sharp reversal from key overhead resistance (primarily an important 2 year trend-line). The dramatic move has BREAKOUT ZONE confirmed the emotionally charged bull-trap that we had anticipated, (1.4000) which had been driven by recent positive EU News. Key support is now holding at 1.3653 (18th Oct low). A sustained 200-DMA (1.4102) SHARP REVERSAL confirmation beneath here will unlock further downside scope into 1.3146 AT KEY RESISTANCE (Oct swing low) and that all-important psychological level at 1.3000. TARGETS 1.3000 & 1.2870 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 Inversely, USD Index has turned back higher above its long-term 200-day USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9% USD INDEX CAD 9.1%, SEK 4.2%, CHF 3.6% (4 YEARS) MA. The bulls are likely to recapture the recent 6-month highs near 80. 200-DMA (75.74) Speculative (net long) liquidity flows are holding steady around their recent spike highs (3 standard deviations from the yearly average). This will likely +10% remain strong and help resume the USD’s major bull-run from its historic +27% +19% SO FAR oversold extremes (momentum, sentiment and liquidity). BREAKOUT ZONE DEMARK™ BUY SIGNAL Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410.  VIDEO 3 STD ABOVE MIG Bank Webinar:  “Why the US dollar is likely to gain up to 30% in 6‐12 months.”  ONE YEAR AVERAGE MIG Bank US Dollar Interview on Bloomberg  TRIGGER (15000) + DEMARK™ 13 9 KEY SUPPORT EXTREME NET (73.50-73.00) COT LIQUIDITY US $ SHORT BUY SIGNALS - POSITIONS S-T TREND L-T TREND STRATEGYUSD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP SHORT 1: 1.3950, Obj: 1.3470, Stop: 1.3840 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 02 November, 2011 Higher low sought for a return to 1.6167. A break back over the 1.6167 high would lead us to remove the strategy below from the report. GBP/USD has found initial support at 1.5890 following the bout of weakness seen from the 200 day moving average. While contained within the 1.5890-1.6167 range a further swing lower remains feasible, towards our target zone near 1.5840, where a higher low is favoured to form. We remain wary of the general range bound nature of this market in the medium-term and note that short-term structure is suggestive of further gains, back towards 1.6167. While above 1.5632 a further leg higher is favoured. However, if thisGBP/USD daily chart, Bloomberg Finance LP region fails to contain the current corrective phase, then the bias will turn negative again. GBP/USD has already experienced a large devaluation versus the US Dollar, therefore any strengthening in the US Dollar may not see the full participation of GBP/USD. 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
  4. 4. DAILY TECHNICAL REPORTUSD/JPY 02 November, 2011 USD/JPY POST INTERVENTION (Daily RETRACEMENT (PIR I) USD/JPY intervention favours test of 80.00.1 YEAR) USD/JPY’s latest intervention by the BOJ favours a test of that all- important psychological level at 80.00. This marks the BOJ’s third time toQUAKESHOCK! officially intervene on the rate this year, after it carved out yet another new 83.30 post WWII record low at 75.35. POST G7MOVE (I) Multiple DeMark buy signals were also triggered within the multi-week HIGH base pattern which has now broken higher (as had been expected by our 82.00 low volatility measures). POST The medium/long-term view is more bullish, favouring a sustained move BOJ MOVE (II) HIGH above our initial upside trigger level at 80.00, near 80.24 (post BOJ 80.24 intervention II high). POST Keep in mind that such a scenario would help reactivate the longer-term BOJ MOVE (III) technical bias, including prior monthly DeMark™ exhaustion signals, within USD/JPY Weekly ENDING PIR II HIGH (2007 – 2011) DIAGONAL the ending diagonal pattern, which was part of a major Elliott Wave cycle. PATTERN Only a sustained weekly close below 76.25 will lead to a reassessment of BREAKOUT TARGET the view and extend temporary weakness into 74.55. (85-79) 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 SIGNAL DEMARK™ BUY SIGNAL AFTER NEW POST WWII LOW (75.35) S-T TREND L-T TREND STRATEGYUSD/JPY daily, weekly chart, Bloomberg Finance LP LONG at 78.20, Obj: 80.05/82.00/83.30, Stop: 76.50 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 02 November, 2011 Meets initial resistance at 0.8960. USD/CHF saw a further squeeze higher to test the region close to 0.9000, reaching 0.8960 so far. Scope is seen for a further rise to test the 0.9000 level, however a degree of resistance would be expected there, which may then signal the resumption of a fresh swing to the downside. Although the medium-term view remains bullish a re-test of the region close to 0.8242 is possible ahead of a potential return to 0.9316. Movement in USD/CHF is likely to be affected by the SNB attempting to maintain EUR/CHF above 1.2000. However, back under 0.7712 is required to change the medium-term bullish bias. A push back over 0.9083 is required to open up a return towards theUSD/CHF daily chart, Bloomberg Finance LP recent high at 0.9316.USD/CHF hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY Long 3 at 0.8600, Objs: All three to 0.9000, Stop: 0.8800 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 02 November, 2011 USD/CAD (Daily) USD/CAD (Weekly) Bulls reverse higher from psychological 1.0000 level. August High (1.0673) USD/CAD’s short-term price activity has turned positive, with 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 200-DMA CONFIRMATION potential major upside reversal higher above the old resistance level at (0.9815) ABOVE 1.0680 1.0673 (August high & Congestion zone). OPENS LARGER RECOVERY Only a sustained close beneath here will unlock bearish setbacks into the long-term 200-day MA at 0.9813 and 0.9726 (31st Aug low). 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 LP CHF/CAD (Daily) EUR/CAD is extending above its 200-day MA, within a large multi-month 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 1.1275, following the dramatic price slide lower (triggered by the SNB 50% intervention). The cross-rate has now retraced more than half of its 2011 (1.3570) gains. 61.8% 50% (1.3379) 200-DMA (1.1488) (1.3833) 61.8% (1.0893) 200-DMA (1.1875) EUR/CAD (Daily) S-T TREND L-T TREND STRATEGYEUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP LONG 3: 1.0050, Objs:1.0270/1.0660/1.0850, Stop: 0.9890 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 02 November, 2011AUD/USD AUD/USD DEMARK™(1 YEAR) SELL SIGNALS (Weekly) Sharp setbacks weigh. AUD/USD’s sharp setbacks continue to weigh. The move was triggered from key resistance at 1.0765 (01st Sept high) and is now holding beneath STRUCTURAL LEVEL the 200-day MA (1.0407). 38.2% (0.9144) A sustained move below here is likely to mount downside pressure on the 3 YEAR 50% UPTREND rate’s multi-year uptrend. (0.8546) IS UNDER 200-DMA PRESSURE (1.0407) 61.8% The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18th (0.7947) KEY Oct low). A break here will unlock sharp setbacks into 1.0000. 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.AUD/USD daily, weekly chart, Bloomberg Finance LP AUD/JPYAUD/NZD (Daily) DEMARK™ SELL SIGNAL 13 The Aussie dollar has reversed gains against the Japanese yen and is now (Daily) trading back below the long-term 200-day MA which is currently at 83.11. 200-DMA Near-term support continues to hold at 77.63 (18th Oct low). A break here CAPS BEAR will resume downside scope into 76.70 and signal further unwinding of risk MKT 38.2% appetite. (76.70) 200- DMA 50% (83.12) (72.58) 61.8% RESUMPTION OF (68.47) BREAKDOWN ADDS TO RISK AVERSION KEY SUPPORT 1.2319 / 1.2100 S-T TREND L-T TREND STRATEGY SHORT 3: 1.0570, Obj: 1.0230/1.0010/0.9710, Stop: 1.0750AUD/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
  8. 8. DAILY TECHNICAL REPORTGBP/JPY 02 November, 2011 Short-term a return towards 122.65 is favoured. GBP/JPY has entered into a period of consolidation following the intervention by the BOJ in USD/JPY at the start of the week. This has led to a breach above the key 123.31 level, which now warns of a much larger corrective phase higher. However, given the nature of the upside surge, a return to the 122.65 region is favoured ahead of further strength. Bigger picture a further rise towards 129.00/130.00 is possible, given the daily structure present since 116.84. A push back under 121.39 is required 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 averageGBP/JPY daily chart, Bloomberg Finance LP which is currently at 128.89. Thus the region between 129.00 and 130.00 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
  9. 9. DAILY TECHNICAL REPORTEUR/JPY 02 November, 2011 Possible symmetric correction complete at 111.60. EUR/JPY has seen a significant break higher out of a falling channel, leaving a false break lower at 100.76, in the daily timeframe. However, we also note that the rise to 111.60 may eqaute to the completion of a symmetric correction from 100.76, thus warning of a return to weakness. Further price action needs to be monitored to try to determine a near-term bias, with the current stance being neutral. Should the region near 112.50 be met a lower high would be favoured to form in that region, close to the 200 day moving average, currently at 112.62. A sustained hold over the 200 day moving average will turn the outlookEUR/JPY daily chart, Bloomberg Finance LP bullish. In the meantime a mild bearish bias remains in place. S-T TREND L-T TREND STRATEGYEUR/JPY hourly chart, Bloomberg Finance LP Await fresh signal. 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 02 November, 2011 Poor trade loaction keeps us on the sidelines. EUR/GBP saw a push back under 0.8670 in recent trade which now likely leaves a lower high at 0.8831, very close to the region in which we expected weakness to manifest, near the old double top at 0.8886/85. The bias remains mildly bearish, although trade location remains poor with a return back towards 0.8831 offering better opportunities. Alternatively, we await a clear break under the 0.8530/31 double bottom to realize a breakout from the 0.8530-0.8886 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 shown).EUR/GBP daily chart, Bloomberg Finance LP 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 Look to sell higher. 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 02 November, 2011 Tight range holds under 1.2200. EUR/CHF has entered into a tight consolidation range just under the 1.2200 level, testing the resolve of the SNB to defend levels higher than 1.2000. Failure to hold within the confines of the earlier hourly rising channel also warns of a return towards the key high near 1.1973, close to the 1.2000 floor in 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. This brings back into focus the 1.2500 – 1.3000 zone where resistance was always anticipated. Also noted is the failure to maintain trade above theEUR/CHF daily chart, Bloomberg Finance LP 200 day moving average. Given the sustained push over 6% in 10 year Italian government bond yields, the question arises as to 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. 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. 12. DAILY TECHNICAL REPORTGOLD 02 November, 2011GOLD KEY TRIGGER LEVELSDOWNSIDE: $1600 / $1530 UPSIDE: $1760 / $1844 RISK ZONE III DOUBLE Risk of a larger decline beneath $1530. DEMARK™ SIGNAL TOP 20% WARNED OF GOLD’S OVERBOUGHT SO FAR Gold remains bearish after its dramatic 20% price fall, which helped CONDITIONS confirm the extreme overbought conditions (marked by DeMark™ $1760 indicators). This also timed a key cycle peak, ahead of that all-important $1704 $2000 glass-ceiling. $1600 Most concerning is that speculative (net long) flows have recently breached 34% a key downside level which may threaten over 2 years of sizeable long gold $1532 positions. 200-DMA BREAKOUT NOT BROKEN IN 3 YEARS! In price terms, Gold’s latest 20% bearish slide is still worth less than the largest average drawdown measured since the start of the yellow metal’s 26% long-term bull market in 1999. CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE There is heightened risk of a much larger decline if we confirm a weekly INTO $1300 & $1040-1000 TREND close beneath $1600 and $1554-30 (200-day MA/swing low), which has not CHANNEL been breached in 3 years! (12 YEARS) A number of “bargain hunting” trend-followers will be watching this COT NET LONG SPECULATOR benchmark “line in the sand” for repeat support or a potential big squeeze POSITIONS 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 Please select links for in-depth Gold coverage: 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 IF KEY LEVEL BREAKS (CNBC & BLOOMBERG REPORTS) II S-T TREND L-T TREND STRATEGYGold weekly, daily chart and COT Liquidity, Bloomberg Finance LP SHORT 3: 1710, Obj: 1600/1530/1300, Stop: 1760 www.migbank.com Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 12
  13. 13. DAILY TECHNICAL REPORTSILVER 02 November, 2011 Silver HITS 1980 Spike High! DEMARK™ SELL SIGNAL 13 Key support at $26.0700. Silver (Daily) I DEMARK™ Silver’s latest price capitulation is a painful reminder to the investment SELL SIGNALS 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 SHORT 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 35.6880 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 02 November, 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 02 November, 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