MIGBANK Daily Technical Analysis Report - 12/7/2011

8/6/2019 MIGBANK Daily Technical Analysis Report - 12/7/2011

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MIG BANK 14, rte des Gouttes dOr CH-2008 Neuchtel Switzerland

Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] www.migbank.com

WINNER BEST SPECIALIST RESEARCH

MARKET S-TERMMULTI-DAY

L-TERMMULTI-WEEK

STRATEGY/POSITION

ENTRYLEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD SHORT 2 1.4420 1.3660/1.3410 (Entered on 06/07/2011) 1.4305GBP/USD Sell limit 3 1.5910 1.5810/1.5550/1.5345 1.6010USD/JPY Await fresh signal.USD/CHF Mildly bearish bias while under 0.8521.USD/CAD Await Buy Trade Setup (Neutral).AUD/USD SHORT 3 1.0630 1.0390/1.0205/0.9700 (Entered on 11/07/2011) 1.0780GBP/JPY Sell limit 3 128.00 127.00/124.65/122.36 129.00EUR/JPY SHORT 1 117.70 105.44 (Entered on 04/07/2011) 115.70EUR/GBP Sell limit 3 0.8900 0.8795/0.8500/0.8285 0.9005EUR/CHF SHORT 1 1.1805 1.1000 (Entered on 11/07/2011) 1.1805GOLD Await fresh signal.SILVER Await fresh signal.

DISCLAIMER & DISCLOSURESPlease read the disclaimer and thedisclosures which can be found atthe end of this report

DAILY TECHNICAL REPORT12 July, 2011

Ron William, CMT, MSTA

Bijoy Kar, CFA

Notes: Entries are in 3 units and objectives are at 3 separate levels where 1 unit w ill 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 mor e profit. All orders are valid until the next report is

published, or a trading strategy alert is sent between reports.
mailto:[email protected]:[email protected]:[email protected]


2/15

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Breaks out from major pattern.

Hit first objective at 1.3970. Stop left at 1.4305 for now. EUR/USD has resumed its bearish activity and has broken out of the all-

important triangle pattern consolidation.

The move follows last Fridays worse-than-expected NFP figures whichparadoxically pushed the US dollar higher, as market sentiment refocused

back onto risk aversion and a flight to traditional quality/safe haven assets.

Our short position favours sustained weakness to unlock an acceleratedimpulsive (wave 3) into 1.3670 (61.8% Fib-Jan 2011 uptrend). Only a

sustained close above the Trichet high at 1.4653 and most importantly

1.4711/30 will lead us to re-evaluate.

Inversely, the US dollar index has broken above 76.36 (23rd May high), toconfirm a multi-month w-shaped base pattern for an extension into 7701

and 78.03 (50%/61.8% Fib-Jan 2011 Decline). Further upside scope is also

being supported by increased long positions on our COT liquidity, which

has been positive for the last 6 weeks.

SPECIAL REPORT :EUR/USD A Fall From Grace ? Decline Targets 1.3770/1.3410.

S-T TREND L-T TREND STRATEGY

Short 2 at 1.4420, Objs: 1.3660/1.3410, Stop: 1.4305

EUR/USD

Ron William, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 454

EUR/USD

EUR/USD daily chart, Bloomberg Finance LP

Please select link: REPORT

VIDEO

EUR/USD hourly chart, Bloomberg Finance LP
mailto:[email protected]:[email protected]:[email protected]://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfhttp://www.migbank.com/research-department/forex-market-outlook/http://www.migbank.com/research-department/forex-market-outlook/http://www.migbank.com/research-department/forex-market-outlook/http://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdfmailto:[email protected]


3/15

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Consolidation resolves lower.

GBP/USD has relapsed after forming a lower high at 1.6442. Losses haveclearly broken under weekly channel support. Coupled with the push

under 1.6058, weakens the outlook further.

The period of consolidation that we noted yesterday in the daily timeframehas since broken lower, turning the outlook decidedly negative in both the

short and longer-term timeframes.

A minor squeeze higher is now sought for the creation of a lower high anda continuation of weakness.

Further weakness has the potential to initially target 1.5345 over comingsessions.


Sell limit 3 at 1.5910, Objs: 1.5810/1.5550/1.5345, Stop: 1.6010.

GBP/USD

Bijoy Kar, Technical Strategist, E-mail:[email protected], Phone: +41 32 7228 424

GBP/USD

GBP/USD hourly chart, Bloomberg Finance LP

GBP/USD daily chart, Bloomberg Finance LP
mailto:[email protected]:[email protected]:[email protected]:[email protected]


4/15

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Another failed breakout.

Long stopped. USD/JPY has suffered yet another failed breakout above our second

trigger point at 81.40 (multi-week triangle pattern). We remain bullish in

the medium to long-term, but are switching to a more cautious footing,

watching for a sustained resumption of the potentially new structural bull-

cycle.

To signal an impulsive move higher, we still need a sustained close abovestrategic levels at 82.00 (post G7 intervention high) and 83.30 (post

Earthquake shock high), then onwards into 85.50 (07th April high).

The bulls must extend gains past 85.50 to trigger a renewed attack onto88.00 (Major ending diagonal pattern ceiling).


Await fresh signal.


USD/JPY

USD/JPY daily chart, Bloomberg Finance LP

USD/JPY hourly chart, Bloomberg Finance LP


5/15

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Trade dominated by movements in EUR/CHF.

USD/CHF continues to trade within the confines of a daily/weekly wedge,after failing to gain momentum last week following the minor beak over

wedge resistance.

Movements in USD/CHF are being driven by the return to weakness seenin EUR/CHF due to the widening of periphery government bond spreads

versus bunds. This now warns of a return to, and potential break of,

wedge resistance.

We look for a break back over 0.8521 before initiating longs, with a bias inthe interim for a possible re-test of weekly wedge support.


Mildly bearish bias while under 0.8521.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHFUSD/CHF

USD/CHF daily chart, Bloomberg Finance LP


6/15

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Unwinding from oversold conditions.

USD/CAD is unwinding from oversold conditions, amidst key support near0.9624/05 (61.8%/66% retrace of the April uptrend). Corrective activity was

originally triggered after the rates expanding pattern initially failed at key

resistance into 0.9906-0.9915 (38.2% Fib-Sept 2010 decline & 200 DMA).

Meantime, our medium/long-term perspective has been neutralised by afailed breakout from the multi-month wedge pattern.

Indeed the bulls must recapture 0.9913/15 (27th June swing high/38.2%Fib), to achieve a sustainable recovery into 0.9968 (17th March high) and

1.0000 (parity level).


Awaiting Trade Setup (Neutral).

USD/CAD


USD/CAD daily chart, Bloomberg Finance LP

USD/CAD hourly chart, Bloomberg Finance LP


7/15

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Reactive bounce still weighed by exhaustion signal.

AUD/USDs reactive bounce from key support at 1.0443 (TDST line), is stillweighed down by a DeMark exhaustion signal last seen at the May peak.

We are monitoring the bearish signal and have opened a short position.

Keep alert to the fact that our DeMark indicator has also flaggedexhaustion sell signals across both weekly and daily timeframes. Meantime,

our downside trigger level remains at 1.0443 (TDST line), to unlock

extended downside scope into 1.0359 (50% Fib), then 1.0205 and 0.9990.

Elsewhere, the Aussie dollar remains weak against the New Zealand dollar,after its recovery failed into key resistance at 1.3169 (61.8% Fib). The pair

is still locked within its new bear cycle structure while it holds beneath this

level.

The Aussie dollar has also weakend against the Japanese yen, aftertriggering a daily reversal pattern. The bearish signal is now pushing back

lower into the multi-week triangle pattern. We continue to favour a

potential downside breakout, which would signal further risk aversion in

the financial community.


Short 3: 1.0630, Obj: 1.0390/1.0205/0.9700. Stop: 1.0780

AUD/USD


AUD/USD hourly chart, Bloomberg Finance LP

AUD/USD daily chart, Bloomberg Finance LP


8/15

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Next targets daily channel support.

GBP/JPY has tested below the 61.8% retrace of the 122.36-140.03 riseseen earlier in the year.

This now alters the near-term structure in favour of a relapse towards122.36, thus also greatly weakening the longer-term recovery structure

that we had previously expected.

Focus remains on the daily bear channel that has been in place for the lastthree months.

A lower high is now potentially in place at 130.85 for a continuation ofnear-term weakness.

Yesterdays push back under 128.17 suggests a return to the daily channelsupport currently at 124.65.

With this in mind a lower high is now sought.


Sell limit 3 at 128.00, Objs: 127.00/124.65/122.36, Stop: 129.00

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP

GBP/JPY hourly chart, Bloomberg Finance LP


9/15

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Breaks under the 200 DMA and the platform near 113.42/50.

Stop for the final unit moved to 115.70. Final objective moved to 105.44. EUR/JPY has likely completed an extended recovery from the 2010 low at

105.44.

Yesterday saw a break under the platform near 113.42/50 which alsoconstituted a push under the 200 day moving average

The structure present since 117.90 now warns of the potential for a shallowretrace and a further extension lower back towards 105.44. This is

bolstered by the continuing widening of periphery spreads versus bunds.

We also note that yesterdays sharp fall has also pushed under the 50 weekmoving average. This turns the longer-term outlook negative again.

Although further losses are anticipated we are lowering our stop on ourfinal short unit to 115.70 to protect a portion of the profit already

generated.


Short 1 at 117.70, Obj: 105.44, Stop: 115.70.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPYEUR/JPYEUR/JPYEUR/JPY


10/15

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Under 0.8848 weakens near-term bullish structure.

Long stopped. Looking to sell. EUR/GBP has suffered in the same manner as other EUR crosses given the

stresses experienced in the periphery bond markets.

With this in mind, the break higher that occurred at the beginning of themonth to 0.9084 may mark the end of the recovery structure seen since

0.8285, with a return to the 200 day moving average now favoured. This

currently lies near 0.8665.

It is thus our strategy to wait for a bounce higher to evolve for the creationof a lower high and the resumption of weakness.

A break under 0.8611 is required to break down the current longer-termbullish structure.


Sell limit 3 at 0.8900, Objs: 0.8795/0.8500/0.8285, Stop: 0.9005.EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP weekly chart, Bloomberg Finance LP

EUR/GBPEUR/GBP



11/15

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Under 1.1806 negates multiple bullish signals.

First and second objectives met. Stop left at 1.1805 and final objectivemoved to 1.1000.

EUR/CHF had exhibited a number of bullish reversal signals in differenttimeframes. All of these were negated yesterday with the push under

1.1806.

Given the continued upside pressure in periphery spreads versus bunds,we continue to view the downside as being vulnerable.

With this in mind we next target 1.1565 and then potentially lower towards1.1000.

S-T TREND L-T TREND

Short 1 at 1.1805, Obj: 1.1000, Stop: 1.1805.

EUR/CHF daily chart, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP


12/15

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Unwinding recent weakness within a volatile range.

Short stopped. Gold is now unwinding its recent fall, which still remains within a larger

volatile range. We continue to expect this counter reaction to be limited

and likely to resume the already broad weakness playing out in Gold

priced in other key rates, such as Euro, Swiss franc, and commodity driven

rates such as the Aussie dollar & South African rand.

The larger corrective move on Gold in US dollar terms, remains pressuredby a weekly DeMark exhaustion signal, which was followed by a bearish

engulfing reversal from a multi-year bull-channel.

Bears target 1474.69 (38.2% Fib) and 1442.92 (50% Fib), with overshootrisk into 1422.30/1411.13 (200-day MA/61.8% Fib).

It is also worth continuing to monitor Golds COT liquidity readings whichis weakening back into a key structural level. Keep in mind that a sustained

break of this area would threaten 1.5 years of sizeable long gold positions.

Bulls need to sustain gains above 1553.65 (06 June high), in order to offera recapture of the all-time high at 1577.57. Only a close above there would

confirm a resumption of the major uptrend into the next psychological

glass-ceiling at 1600.00.


Await fresh signal.

GOLD


Gold daily chart, Bloomberg Finance LP

Gold hourly chart, Bloomberg Finance LP


13/15

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Resistance around 38.80 caps.

Silver remains capped beneath resistance around 38.80 and continues tofavour a resumption lower. (Note, the prior correction had fallen just over

30% in only 5 days, which may have signalled a peak in global risk

appetite).

We continue to look for potential moves into 32.3479/32.3125 (38.2% Fib-1999 bull market/12th May swing low), offering a downside extension into

31.7819 (24th Feb low) and 30.0000 (old psychological level).

Key macro support exists at 26.9600 (50% Fib-1999 bull market) and wouldstill mean that silvers long-term uptrend remains intact.

We also continue to watch silvers relative performance against gold, whichis currently unwinding (already up 37%), from extreme oversold conditions.

Bulls need to push back above 38.8475 (26th May high), then 39.4825(11th May high), in order to revive a promising recovery into 40.0000 (old

psychological level).


Await signal.

SILVER

Spot Silver hourly chart, Bloomberg Finance LP

Spot Silver daily chart, Bloomberg Finance LP


14/15

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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.

No information published constitutes a solicitation or offer, or

recommendation, 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.

No information published constitutes a solicitation or offer, or

recommendation, 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

DISCL

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MIGBANK Daily Technical Analysis Report - 12/7/2011