DAILY TECHNICAL REPORT

31 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
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 Buy Stop 3 LONG 3 Buy Stop 3 Sell Stop 3

ENTRY LEVEL 1.3950 1.5840 78.20 0.8600 1.0050 1.0570

OBJECTIVES/COMMENTS

STOP

1.3840/1.3650/1.3470 1.5940/1.6153/1.6400 80.05/82.00/83.30 0.9000/0.9200/0.9316 (Entered 28/10/2011) 1.0270/1.0660/1.0850 1.0230/1.0010/0.9710 Await fresh signal. Await fresh signal.

1.4110 1.5740 76.50 0.8600 0.9890 1.0750

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

Sell limit 3

0.8870

0.8750/0.8580/0.8400 Await fresh signal.

0.8970

Bijoy Kar, CFA

EUR/CHF GOLD SILVER Sell Stop 3 Sell Stop 3 1710 34.1300

1600/1530/1300 29.9700/26.0700/23.3400

1760 35.6880

WINNER BEST SPECIALIST RESEARCH

DISCLAIMER & DISCLOSURES

Please read the disclaimer and the disclosures which can be found at the end of this report

Notes:Entriesarein3unitsandobjectivesareat3 separate levelswhere1unitwillbeexited.Whenthefirstobjective(PT1)hasbeenhitthestopwillbemovedtotheentry pointforanearriskfreetrade.Whenthesecondobjective(PT2)hasbeenhitthestopwillbemovedtoPT1lockinginmoreprofit.Allordersarevaliduntilthenextreportis published,oratradingstrategyalertissentbetweenreports. CH-2008 Neuchtel info@migbank.com Switzerland www.migbank.com

MIG BANK / Forex Broker 14, 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

31 October, 2011

Sharp reversal from key resistance.

EUR/USD has reversed sharply from key overhead resistance (including an important 2 year trend-line) and pushed back into the 200-day MA

BREAKOUT ZONE (1.4000)

(1.4102). A close beneath the 200-day MA will warn of an emotionally charged bulltrap and ultimately a further downside momentum through 1.3799 (26th

200-DMA (1.4102)

SHARP REVERSAL FROM KEY RESISTANCE

Oct low) and 1.3653 (18th Oct low), with scope into 1.3146 (Oct swing low). Further pressure may weigh from broad risk-related proxies such as the developed equity markets. The euro currently shares a high correlation of

UPTREND (2 YEARS)

0.85% with the S&P500 which is now unwinding from new multi-week highs.

EUR/USD daily chart, Bloomberg Finance LP

USD INDEX
200-DMA (75.74)
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%

USD INDEX (4 YEARS)

Inversely, the USD Index has turned higher ahead support at 74.10 and 73.40. 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
+10%
SO FAR

+27%

+19%

remain strong and help resume the USDs major bull-run from its historic oversold extremes (momentum, sentiment and liquidity).

BREAKOUT ZONE

DEMARK BUY SIGNAL

SpecialReport:EUR/USDAFallFromGrace?DeclineTargets1.3770/1.3410.

VIDEO

3 STD ABOVE ONE YEAR AVERAGE

MIGBankWebinar:WhytheUSdollarislikelytogainupto30%in612months. MIGBankUSDollarInterviewonBloomberg

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: 1.3950, Obj: 1.3840/1.3650/1.3470, Stop: 1.4110

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

DAILY TECHNICAL REPORT

31 October, 2011

Meets initial resistance close to the 200 day moving average.

GBP/USD has seen a return to test the 200 day moving average ahead of the latest set back. However, structure from 1.5272 is suggestive of a potential higher low versus 1.5632, for a return to 1.6153 and then higher still. We remain wary of the general range bound nature of this market in the medium-term time frame. While above 1.5632 a further leg higher is favoured. However, if this

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 GBP/USD daily chart, Bloomberg Finance LP 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

USD/JPY
USD/JPY (Daily 1 YEAR)

DAILY TECHNICAL REPORT

31 October, 2011

POST INTERVENTION RETRACEMENT (PIR I)

USD/JPY intervention favours test of 80.00.

USD/JPYs latest intervention by the BOJ favours a test of that all-

QUAKE SHOCK! 83.30

POST G7 MOVE (I) HIGH

important psychological level at 80.00. This marks the BOJs third time to officially intervene on 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
82.00

base pattern which has now broken higher (as had been expected by our low volatility measures).

POST BOJ MOVE (II) HIGH

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
80.24

intervention II high). Keep in mind that such a scenario would help reactivate the longer-term 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.
PleaseselectthelinkbelowtosignupforourMIGBankwebinaronUSD/JPY. ThiswillfeatureanupdatetoourpreviousSpecialReport USD/JPYsLongTermStructuralChange(Wednesday,November02nd15:0015:45GMT). WhatdolongtermcyclestellusaboutthefutureofUSDJPY? HowdoeventshocksandCentralBankInterventionsimpactthemarket? SafeHavenFlows:Awaveofchange. HighProbabilityTradingStrategies.

USD/JPY Weekly (2007 2011)

ENDING DIAGONAL PATTERN BREAKOUT TARGET (85-79)

PIR II

POST BOJ MOVE (III) HIGH

MONTHLY DEMARK BUY SIGNAL

DEMARK BUY SIGNAL AFTER NEW POST WWII LOW (75.35)

S-T TREND

L-T TREND

STRATEGY
Buy Stop at 78.20, Obj: 80.05/82.00/83.30, Stop: 76.50

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

31 October, 2011

Further recovery anticipated while above 0.8600.

Stop raised to entry. USD/CHF continues to trade close to the 200 day moving average. Given the structure of the fall from the recent high at 0.9316, a larger recovery is now anticipated towards 0.9000 initially. However, failure to hold above the entry level of the strategy below, at 0.8600, will warn of a larger fall to the 0.8000 region. In any case a further recovery leg higher is anticipated eventually. Movement in USD/CHF is likely to be affected by the SNB attempting to maintain EUR/CHF around 1.2200. However, back under 0.7712 is

required to change the long-term bullish bias. USD/CHF daily chart, Bloomberg Finance LP A push back over 0.9083 is required to open up a return towards the 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: 0.9000/0.9200/0.9316, Stop: 0.8600

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

31 October, 2011
USD/CAD (Weekly)

Bears push back under the psychological 1.0000 level.

USD/CADs short-term price activity remains negative, as the bears push back under the all-important psychological 1.0000 level (prior trading range).

200-DMA (0.9813)

CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY

Only a sustained close beneath here will extend bearish setbacks into the long-term 200-day MA at 0.9813 and 0.9726 (31st Aug low). Only a close beneath here will change the long-term positive view and encourage a sell trade setup in our model portfolio. Meanwhile, positive momentum needs to push above 1.0264 and 1.0400

DEMARK BUY SIGNAL

to rebuild the potential major upside reversal higher above the old resistance level at 1.0673 (August high & Congestion zone).

USD/CAD daily, weekly chart, Bloomberg Finance LP

MAJOR RESISTANCE

A strong directional confirmation above here will open a much larger

REVERSAL PATTERN

CHF/CAD (Daily)

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 trading range. Key resistance continues to hold at 1.4379 (June swing high), which has for some time marked a strong distribution pattern.

50%

(1.3570)
61.8% 50% 200-DMA (1.3833)

CHF/CAD is retesting its support nearby the 200-day MA at 1.1265,

(1.1488)
61.8%

(1.3379)

following the dramatic price slide lower (triggered by the SNB intervention). The cross-rate has now retraced more than half of its 2011

(1.0893)
200-DMA (1.1275)

gains.

EUR/CAD (Daily)

S-T TREND

L-T TREND

STRATEGY
Buy Stop 3: 1.0050, Objs:1.0270/1.0660/1.0850, Stop: 0.9890

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

31 October, 2011
AUD/USD
(Weekly)

Resistance at 1.0765 caps explosive recovery.

AUD/USDs explosive rally is currently unwinding from overbought
STRUCTURAL LEVEL

conditions, ahead key resistance at 1.0765 (01st Sept high). This level is likely to cap gains back into the 200-day MA (1.0405) and
3 YEAR UPTREND IS UNDER PRESSURE

38.2%

(0.9144)
50%

potentially resume downside pressure on the rates multi-year uptrend. The bears need to confirm beneath 1.0322 (26th Oct low) and 1.0188 (18th 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.

(0.8546)
200-DMA (1.0405) 61.8%

(0.7947) KEY ZONE

AUD/USD daily, weekly chart, Bloomberg Finance LP

AUD/NZD (Daily) AUD/JPY (Daily)
DEMARK SELL SIGNAL

13

The Aussie dollar is also gaining further against the Japanese yen, after spiking above the long-term 200-day MA which is currently at 83.12. Nearterm support continues to hold at 77.63 (18th Oct low). A break here will

200-DMA CAPS BEAR MKT 38.2%

resume downside scope into 76.70.

(76.70)
50%

200DMA (83.12)

(72.58)
61.8%

(68.47)

KEY SUPPORT 1.2319 / 1.2100

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3: 1.0550, Obj: 1.0230/1.0010/0.9710, Stop: 1.0750

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

31 October, 2011

Clear break over 123.31 suggests scope for a larger recovery.

Short exited. GBP/JPY has been affected by the intervention last night of the BOJ in USD/JPY. This has led to a breach above the key 123.31 level, which now warns of a much larger corrective phase higher. In fact a return towards 129.00/130.00 is now 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. Thus the region between 129.00 and 130.00 would be attractive for renewed short positioning. GBP/JPY daily chart, Bloomberg Finance LP

GBP/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await fresh signal. Possibly looking to sell higher.

www.migbank.com

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

EUR/JPY
Breaks out of a falling channel.
Short exited.

DAILY TECHNICAL REPORT

31 October, 2011

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. Potential now exists for a higher low to form versus 100.76 for a further recovery leg higher. This is further bolstered by the failure to remain below 108.03, which opens up a return towards the 200 day moving average, currently at 112.67. Should the region near 112.67 be met a lower high would be favoured to form in that region. In the meantime, scope is seen for a higher low versus EUR/JPY daily chart, Bloomberg Finance LP 104.75. Failure to maintain a foot hold over this level will negate

expectations of a return towards the 200 day moving average.

EUR/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await fresh signal.

www.migbank.com

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

EUR/GBP

DAILY TECHNICAL REPORT

31 October, 2011

Returns to test the 200 day moving average.

EUR/GBP has returned to test the 200-day moving average, which is currently at 0.8739. As mentioned in prior reports the rise seen since 0.8530/0.8531 is viewed as corrective, with a push back under 0.8670 required to negate the possibility of a further squeeze higher to test the 0.8886/85 region. 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 (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.

EUR/GBP hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
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

EUR/CHF

DAILY TECHNICAL REPORT

31 October, 2011

Breaks under the support of an hourly channel.

EUR/CHF failed to garner momentum after meeting supply close to the resistance of an hourly rising channel and has subsequently fallen under the support of this same structure. This now warns of a return to 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 taking place, this would warn of the end of the recovery seen since 1.0075, increasing the probability of a return to this level. This also brings back into focus the 1.2500 1.3000 zone where resistance was always anticipated. A sustained move under 1.2024 will alter our near-term bullish bias. EUR/CHF daily chart, Bloomberg Finance LP

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND
Await fresh trading signal.

www.migbank.com

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

31 October, 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

DEMARK SIGNAL WARNED OF GOLDS OVERBOUGHT CONDITIONS

20% SO FAR

$1760 $1704

indicators). This 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

$1600

34%
$1532
BREAKOUT 200-DMA NOT BROKEN IN 3 YEARS!

a key downside level which may threaten over 2 years of sizeable long gold 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

26%
CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE INTO $1300 & $1040-1000 TREND CHANNEL
(12 YEARS)

long-term bull market in 1999. 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

COT NET LONG SPECULATOR POSITIONS

benchmark line in the sand for repeat support or a potential big squeeze 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 SIZEABLE LONG GOLD POSITIONS UNDER THREAT IF KEY LEVEL BREAKS

Please select links for in-depth Gold coverage: Special Report Golds mountainous peak at riskbeneath $1600 MIG Bank Gold Interview on CNBC Squawk Box
(CNBC & BLOOMBERG REPORTS)

VIDEO

MIG Bank Gold Webinar video

II

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3: 1710, Obj: 1600/1530/1300, Stop: 1760

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

31 October, 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.

200 DMA (36.5125)

II

The move was triggered following a DeMark exhaustion sell signal and has now wiped out almost 50% of silvers prior gains (taken from Silvers all-time high at 49.7900) which was last seen in 1980.

KEY SUPPORT (26.0700)

38.2%

Such a dramatic move traditionally produces volatile trading ranges. This allows the market to have enough time to recover and accumulate renewed buying interest.

(32.3135)

Gold/Silver "Mint" Ratio

50%

(26.9150)

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-

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
Sell Stop 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

31 October, 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

31 October, 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