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DAILY TECHNICAL REPORT 22 December, 2011 Please note: None of the strategies below represent trading
DAILY TECHNICAL REPORT 22 December, 2011 Please note: None of the strategies below represent trading
DAILY TECHNICAL REPORT 22 December, 2011 Please note: None of the strategies below represent trading

DAILY TECHNICAL REPORT

22 December, 2011

Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

of any kind. Please refer to our full disclaimer. Ron William, CMT, MSTA Bijoy Kar, CFA
of any kind. Please refer to our full disclaimer. Ron William, CMT, MSTA Bijoy Kar, CFA
of any kind. Please refer to our full disclaimer. Ron William, CMT, MSTA Bijoy Kar, CFA
Ron William, CMT, MSTA
Ron William, CMT, MSTA
Bijoy Kar, CFA
Bijoy Kar, CFA

WINNER BEST SPECIALIST RESEARCH

DISCLAIMER &

DISCLOSURES

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

MA

S-TERM

L-TERM

STRATEGY/

ENTRY

OBJECTIVES/COMMENTS

STOP

MULTI-DAY

MULTI-WEEK

POSITION

LEVEL

 

EUR/USD

Await fresh signal.

GBP/USD

Await fresh signal.

USD/JPY

Await new buy trade setup above 80.00.

USD/CHF



Looking to sell.

USD/CAD

Awaiting new buy trade setup.

AUD/USD

Exited at 1.0050.

GBP/JPY

Await fresh signal.

EUR/JPY

Await new setup.

EUR/GBP

Sell limit 3

0.8425

0.8325/0.8142/0.8050

0.8525

EUR/CHF

Sell Stop 3

1.2130

1.2030/1.1526/1.1002

1.2230

GOLD

SHORT 2

1705

1530/1300 (Entered 12/12/2011)

1705

SILVER

SHORT 2

34.1300

26.0700/23.3400 (Entered 01/11/2011)

34.1300

 

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.

MIG BANK / Forex Broker

14, rte des Gouttes d’Or

CH-2008 Neuchâtel

Switzerland

Tel +41 32 722 81 00

Fax +41 32 722 81 01

info@migbank.com

www.migbank.com

EUR/USD

EUR/USD

DAILY TECHNICAL REPORT

22 December, 2011

EUR/USD daily chart, Bloomberg Finance LP
EUR/USD daily chart, Bloomberg Finance LP

Short-covering around the key 1.3000 level.

EUR/USD is unwinding mildly from oversold conditions, driven by short- covering as the market adjusts to a new bearish paradigm, following the break beneath that all-important psychological level at 1.3000.

Our cycle analysis successfully signalled increased volatility within the first two weeks of December across “risk” proxies, including the equity and commodity markets. Expect some respite ahead of the holiday period.

Watch for a sustained close beneath 1.3000 (psychological level) to resume EUR/USD’s multi-month downtrend into 1.2870 (2011 major low).

Near-term resistance can be found at 1.3215 and potentially even 1.3550 (02 Dec high). Any rebound into these levels is likely to be short-lived.

 Inversely, the USD Index has extended its recovery higher to new 11- month highs,
 Inversely, the USD Index has extended its recovery higher to new 11-
month highs, (a move worth over 10% from the summer 2010 lows).
 Speculative (net long) liquidity flows are strengthening once again and will
continue to help resume the USD’s major bull-run from its historic
oversold extremes (momentum, sentiment and liquidity).
Special Report: EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410.
VIDEO
MIG Bank Webinar: “Why the US dollar is likely to gain up to 30% in 6-12 months.”
US Dollar Interview on Bloomberg
S-T TREND
L-T TREND
STRATEGY
USD Index daily chart, Bloomberg Finance LP
 Await fresh signal.
chart, Bloomberg Finance LP   Await fresh signal. www.migbank.com Ron William, Technical Strategist, E-mail:
chart, Bloomberg Finance LP   Await fresh signal. www.migbank.com Ron William, Technical Strategist, E-mail:
www.migbank.com
www.migbank.com
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

2

GBP/USD

GBP/USD daily chart, Bloomberg Finance LP GBP/USD hourly chart, Bloomberg Finance LP www.migbank.com
GBP/USD daily chart, Bloomberg Finance LP
GBP/USD hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Initial resistance seen close to 1.5770/80.

GBP/USD has tested the 1.5770/80 double top and met initial resistance. This may highlight the price action seen since 1.5423 as being corrective in nature, with a return to 1.5409 possible in the near- term.

Support for GBP/USD is anticipated given the negative structure that we are also seeing in EUR/GBP. Thus a continuation to the downside in EUR/GBP may be associated with the year’s range being maintained in GBP/USD.

We continue to expect an eventual return to 7.000% in 10 year Italian sovereign yields, which should support the arguements that we have detailed above.

Failure to remain above 1.5423 will see an immediate target at 1.5272 and then potentially trend-line support at 1.5110.

S-T TREND

L-T TREND

STRATEGY

Range bound trade likely to persist near-term.

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

3

USD/JPY

USD/JPY daily chart, Bloomberg Finance LP USD/JPY hourly chart, Bloomberg Finance LP
USD/JPY daily chart, Bloomberg Finance LP
USD/JPY hourly chart, Bloomberg Finance LP
Finance LP USD/JPY hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
Finance LP USD/JPY hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
www.migbank.com
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Weakening beneath 78.24 (DeMark™ Level) .

USD/JPY is still weak beneath 78.24 (DeMark™ Level), as price continues to hold within a multi-day trading range (see hourly chart below).

Confirmation beneath 77.25 (pivot level) would help trigger a third price

retracement back to pre-intervention levels and potentially even a new

post world war record low beneath 75.35.

Sentiment in the option markets continues to suggest that USD/JPY

buying pressure remains overcrowded as everyone continues to try and

be the first to call the market bottom, within the end of this multi-year

contracting pattern (see top chart insert).

This may first inspire a temporary, but dramatic, price spike through psychological levels at 75.00 and perhaps even sub-74.00. Such a move would help flush out a number of downside barriers and stop-loss orders, which would create healthy price vacuum for a potential major reversal.

The medium /long-term view remains bullish, as USD/JPY verges toward

a major long-term 40-year cycle upside reversal. Expect key cycle

inflection points to trigger over the next few weeks, offering a sustained

move above our upside trigger level at 80.00/60, then 82.00 and 83.30.

Please select the link below to review our special coverage on USD/JPY.

Media Reports: CNBC / Squawk Box & Bloomberg

S-T TREND

L-T TREND

STRATEGY

Awaiting Renewed Buy Trade Setup above 80.00.

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426

4

USD/CHF

USD/CHF daily chart, Bloomberg Finance LP USD/CHF hourly chart, Bloomberg Finance LP www.migbank.com
USD/CHF daily chart, Bloomberg Finance LP
USD/CHF hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

A return to the 200 day moving average now favoured.

USD/CHF has weakened substantially after meeting resistance close to 0.9550. This initial bout of weakness may now mark the end of the rising phase from 0.8568. A return back towards the 200 day moving average is possible from current levels.

The fate of USD/CHF is deemed to be tied to the direction of selected core Euro-Zone yields and in particular the yield on Italian sovereign debt. The yields on paper maturing in 6 years+ are all trading above 6%, with 5 year bonds just under 6.000%. It is anticipated that funding pressure will return in the early part of next year. This is likely to exert downside pressure on USD/CHF.

10 year yields in Spain and Italy are currently trading at 5.328% and 6.760% versus 6.478% and 7.355%, before the US Dollar based swap agreement. Thus Spanish debt is experiencing a stronger positive effect, in contrast to the Italian market. These yields were trading at 5.041% and 6.560% respectively yesterday.

S-T TREND

L-T TREND

STRATEGY

Looking to sell.

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

5

USD/CAD

USD/CAD daily chart, Bloomberg Finance LP USD/CAD hourly chart, Bloomberg Finance LP
USD/CAD daily chart, Bloomberg Finance LP
USD/CAD hourly chart, Bloomberg Finance LP
Finance LP USD/CAD hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
Finance LP USD/CAD hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
www.migbank.com
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Unwinding from intraday resistance at 1.0425.

USD/CAD is unwinding sharply from intraday resistance at 1.0425, which coincided with a short-term DeMark™ exhaustion signal.

We prefer to wait for a strong directional confirmation higher before initiating a buy trade setup.

Until then, keep a watchful eye on support 1.0220. A sustained break here would trigger further downside into 1.0000.

Meanwhile, the bulls need to push back above 1.0425 and 1.0524 (25 Nov swing high), in order to trigger a larger breakout from the rate’s multi- month triangle pattern.

In terms of the big picture, a directional confirmation above 1.0680 is still needed to unlock the 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 (see top chart insert).

EUR/CAD has breached the base of an important multi-month distribution pattern. A sustained break beneath 1.3393-79 (19 th Sept low/61.8% Fib), signals an important breakdown into 1.3140 and would provide substantial correlation pressure onto EUR/USD.

S-T TREND

L-T TREND

STRATEGY

Awaiting New Buy Trade Setup above 1.0425.

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

6

AUD/USD

AUD/USD daily chart, Bloomberg Finance LP AUD/USD hourly chart, Bloomberg Finance LP
AUD/USD daily chart, Bloomberg Finance LP
AUD/USD hourly chart, Bloomberg Finance LP
Finance LP AUD/USD hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
Finance LP AUD/USD hourly chart, Bloomberg Finance LP www.migbank.com DAILY TECHNICAL REPORT 22 December, 2011
www.migbank.com
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Strong unwinding from oversold conditions.

AUD/USD is unwinding strongly from oversold conditions, which also coincided with an intraday DeMarkbuy signal (see lower chart).

Although this recovery sharp, it is likely to be short-lived as signaled by the DeMark™ signal. The bears must sustain below 1.0000 to further compound downside pressure on the rate’s multi-year uptrend and push back towards 0.9611.

Elsewhere, the Aussie continues to weaken sharply, against the New Zealand dollar. Near-term price activity is mean reverting back into the 200-day MA and we watch for further setbacks over the multi-day/week horizon.

The Aussie dollar is also pairing back its mild recovery against the Japanese yen, while holding above the neck-line of its two-year distribution pattern. Watch for further downside scope into support at 72.00 which would signal further unwinding of global risk appetite.

S-T TREND

L-T TREND

STRATEGY

Exited at 1.0050.

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

7

GBP/JPY
GBP/JPY
GBP/JPY daily chart, Bloomberg Finance LP GBP/JPY hourly chart, Bloomberg Finance LP www.migbank.com
GBP/JPY daily chart, Bloomberg Finance LP
GBP/JPY hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Sustained over 122.23 suggests a fresh recovery leg higher.

GBP/JPY has broken over the resistance of a falling hourly channel. Coupled with this we have seen a push over the 122.23 lower high. If this rise can be sustained then a fresh leg higher will be favoured to form for a swing all the way back to 127.32.

A break back over 122.98 will add to a more medium-term bullish stance. A failure to do so will suggest that the recovery seen from the

116.84

low is corrective in nature. This suggests scope for a return to

119.38

and then potentially 116.84.

We do however note that for the majority of December a 120.33 -

122.64 range has been traded. A break out of this range is sought

ahead of strategy formulation.

S-T TREND

L-T TREND

STRATEGY

Await fresh signal.

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

8

EUR/JPY
EUR/JPY
EUR/JPY daily chart, Bloomberg Finance LP EUR/JPY hourly chart, Bloomberg Finance LP www.migbank.com
EUR/JPY daily chart, Bloomberg Finance LP
EUR/JPY hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Continues to find support close to the 101.00 region.

EUR/JPY continues to meet support close to the 101.00 region after basing at 101.05 recently.

The negative effects of the breakdown in EUR/USD remain a potential large negative factor for this pair going forward, which warns of a re-test of 100.76 and then possibly lower.

However, from a structural perspctive, the medium-term recovery that we have already witnessed from 100.76 to 111.60 is viewed as the initial leg higher in a larger recovery structure and thus, while trade is maintained above 101.05, a further leg higher is favoured.

This clash between structure and event risk in the Euro-Zone keeps us on the sidelines for now.

Sustained under 100.76 will warn of a much larger continuation to the downside.

S-T TREND

L-T TREND

STRATEGY

Await fresh signal.

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

9

EUR/GBP

EUR/GBP daily chart, Bloomberg Finance LP EUR/GBP hourly chart, Bloomberg Finance LP www.migbank.com
EUR/GBP daily chart, Bloomberg Finance LP
EUR/GBP hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Finds initial support on bear channel support.

Sell level adjusted lower, with the appropriate changes made to the objectives and stop.

EUR/GBP has found initial support after bouncing from daily channel

support near the 0.8300 region. Scope is seen for a minor continuation

of

the recovery higher. However, hourly structure remains bearish with

a

lower high sought versus 0.8613 for a fresh swing to re-test 0.8303.

If

a sustained break under 0.8303 can be realized then an extension

back to the 0.8068 – 0.8142 region would become viable. This view is

assisted by the recent push under 1.3146 in EUR/USD, which may act

to make EUR cross shorts easier to maintain.

Rising yields in the core Euro-Zone sovereign bond markets is a continued concern and one that may destabilise the FX markets going

forward. Within this environment Sterling may well be judged the best of

a bad bunch and to a degree be seen as a short-term safe haven, further adding to the potential for downside pressure ahead.

S-T TREND

L-T TREND

STRATEGY

Sell limit 3 at 0.8425, Objs: 0.8325/0.8142/0.8050, Stop: 0.8525

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

10

EUR/CHF

EUR/CHF daily and weekly charts, Bloomberg Finance LP EUR/CHF hourly chart, Bloomberg Finance LP www.migbank.com
EUR/CHF daily and weekly charts, Bloomberg Finance LP
EUR/CHF hourly chart, Bloomberg Finance LP
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

Hourly structure warns of an extension lower.

EUR/CHF is developing a structure in the hourly timeframe which is currently suggestive of a sizeable extension lower. If a break can be realised under 1.2170 then stops under 1.2123/30 will become vulnerable. If these are triggered, there may be sufficient momentum to target the large cluster of stops that are expected under the 1.2000 region.

Despite some reasonable auctions in Spanish governments bonds, the Italian 10 year sovereign yield remains elevated, with a re-test of the 7.000% level anticipated. A large tranche of rollover funding is expected in the new year and growth is also likely to contract in Italy. Thus, there is plenty of scope for the Swiss Franc to be sought once again as a safe haven. The low yield available on Swiss Franc deposits is unlikely to act as an impediment to it being sought as a safe haven.

As mentioned above, an initial breakout from the recent range has the potential to trigger clustered stops which may add to downside momentum. A failure to hold over the 1.2000 level will almost certainly see a return to the larger downtrend.

S-T TREND

L-T TREND

 

Sell stop 3 at 1.2130, Objs: 1.2030/1.1526/1.1002, Stop: 1.2230.

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

11

GOLD

Gold daily and weekly charts, Bloomberg Finance LP
Gold daily and weekly charts, Bloomberg Finance LP
Gold hourly chart, Bloomberg Finance LP
Gold hourly chart, Bloomberg Finance LP
Bloomberg Finance LP Gold hourly chart, Bloomberg Finance LP www.migbank.com Gold re-testing its 200-day average. DAILY
Bloomberg Finance LP Gold hourly chart, Bloomberg Finance LP www.migbank.com Gold re-testing its 200-day average. DAILY
www.migbank.com
www.migbank.com

Gold re-testing its 200-day average.

DAILY TECHNICAL REPORT

22 December, 2011

Gold is temporarily re-testing its 200-day average, which was recently broken for the first time in 3 years. The move was triggered by a multi-month triangle pattern breakout (see both daily and intraday charts).

Downside pressure remains heavy from inter-market weakness across related risk proxies such as EUR/USD and equity markets. Moreover, there is still heightened risk for a much larger decline if we confirm a weekly close beneath $1600 and $1530 (swing low).

A number of “bargain hunting” trend-followers will be watching this benchmark “line in the sand” for repeat support or a potential big squeeze lower into $1300 and perhaps even $1040-1000 (12-year channelfloor/see top chart insert).

Speculative (net long) flows also support this view having recently breached a key downside level which may threaten over 2 years of sizeable long gold positions. This will trigger a temporary, but dramatic setback that would ultimately offer a unique buying opportunity into summer 2012.

Please select links for in-depth Gold coverage:

S-T TREND

L-T TREND

STRATEGY

SHORT 2: 1705, Objs: 1530, 1300, Stop: 1705

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

12

SILVER

DAILY TECHNICAL REPORT

22 December, 2011

Spot Silver daily chart, Bloomberg Finance LP Spot Silver hourly chart, Bloomberg Finance LP
Spot Silver daily chart, Bloomberg Finance LP
Spot Silver hourly chart, Bloomberg Finance LP
Finance LP Spot Silver hourly chart, Bloomberg Finance LP Weak bounce retesting $30.0000.  Silver ’s
Finance LP Spot Silver hourly chart, Bloomberg Finance LP Weak bounce retesting $30.0000.  Silver ’s

Weak bounce retesting $30.0000.

Silver’s weak recovery from oversold conditions is retesting key support at $30.0000. Only a sustained close below here would trigger a test of the previous swing low at $26.0700.

Macro price structure continues to focus on the downside risks, following the major sell-off in September. Such a dramatic move traditionally produces volatile trading ranges. This allows the market to have enough time to recover and accumulate renewed buying interest.

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 silver’s long-term uptrend and help offer a potential buying opportunity for the eventual resumption higher.

Continue to watch the gold-silver “mint” ratio (see top chart insert) which has now accelerated higher by 70%, suggesting further risk aversion over the next few weeks. This also helps explain recent divergences between gold and silver.

S-T TREND

L-T TREND

STRATEGY



SHORT 2: 34.1300, Objs: 26.0700/23.3400, Stop: 34.1300

www.migbank.com
www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454

13

LEGAL

TERMS

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.

is accurate and complete, MIG BANK makes no such claim. www.migbank.com DAILY TECHNICAL REPORT 22 December,
is accurate and complete, MIG BANK makes no such claim. www.migbank.com DAILY TECHNICAL REPORT 22 December,
www.migbank.com
www.migbank.com

DAILY TECHNICAL REPORT

22 December, 2011

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.

14

CONTACT

CONTACT Howard Friend www.migbank.com Chief Market Strate g ist h.friend@migbank.com Ron William Technical Strate
CONTACT Howard Friend www.migbank.com Chief Market Strate g ist h.friend@migbank.com Ron William Technical Strate
CONTACT Howard Friend www.migbank.com Chief Market Strate g ist h.friend@migbank.com Ron William Technical Strate

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

DAILY TECHNICAL REPORT

22 December, 2011

14, rte des Gouttes d’Or CH-2008 Neuchâtel Tel.+41 32 722 81 00

15