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DAILY TECHNICAL REPORT

29 December, 2011
Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

MA
EUR/USD GBP/USD USD/JPY USD/CHF
Ron William, CMT, MSTA

S-TERM
MULTI-DAY

L-TERM
MULTI-WEEK

STRATEGY/ POSITION

ENTRY LEVEL

OBJECTIVES/COMMENTS

STOP


Sell limit 3 Sell Stop 3 SHORT 1 SHORT 2 0.8425 1.2130 1705 34.1300

Await fresh signal. Await fresh signal. Await new buy trade setup above 80.00. Looking to sell. Awaiting new buy trade setup. Await fresh signal. Await fresh signal. Await fresh signal. 0.8325/0.8142/0.8050 1.2010/1.1526/1.1002 1300 (Entered 12/12/2011) 26.0700/23.3400 (Entered 01/11/2011) 0.8525 1.2250 1605 34.1300

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

Bijoy Kar, CFA

EUR/CHF GOLD SILVER


WINNER BEST SPECIALIST RESEARCH

DISCLAIMER & DISCLOSURES


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

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. CH-2008 Neuchtel info@migbank.com Switzerland www.migbank.com

MIG BANK / Forex Broker Tel +41 32 722 81 00

14, rte des Gouttes dOr Fax +41 32 722 81 01

EUR/USD EUR/USD
Probes lower under 1.2946.

DAILY TECHNICAL REPORT


29 December, 2011

EUR/USD has registered a lower high at 1.3199 and is currently probing under 1.2946. Our cycle analysis successfully signalled increased volatility within the first two weeks of December across risk proxies, including the equity and commodity markets.

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

Inversely, the USD Index has extended its recovery higher to 80.75 so far today, (a move worth over 10% from the summer 2010 lows).

EUR/USD daily chart, Bloomberg Finance LP

Speculative (net long) liquidity flows are strengthening once again and will continue to help resume the USDs 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

USD Index daily chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await fresh signal.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 2

GBP/USD

DAILY TECHNICAL REPORT


29 December, 2011

Under 1.5429 targets 1.5272 immediately.


GBP/USD failed to see a re-test of the 1.5770-80 ceiling. Yesterdays fall under 1.5582 breaks down the short-term positive structure, now warning of a fresh leg lower and re-test of the zone near 1.5272. Italian ten year yields saw a minor pulback yesterday and have once again moved above 7.000% in the run up to todays auction. We

continue to expect a minimum return to 7.483% before the potential for a pullback. Weakness in cable may be limited to trend line support from 1.3503, which curently rests at 1.5125. In any event, cable is expected to be stronger then most in a US Dollar strenthening phase, hence our GBP/USD daily chart, Bloomberg Finance LP bearish view in EUR/GBP.

GBP/USD 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 3

USD/JPY

DAILY TECHNICAL REPORT


29 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. USD/JPY daily chart, Bloomberg Finance LP 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. Special Report: USDJPY Verging on a major 40 year cycle reversal VIDEO Webinar: USD/JPYs Long-Term Structural Change Media Reports: CNBC / Squawk Box & Bloomberg

USD/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Awaiting renewed buy trade setup above 80.00.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426 4

USD/CHF

DAILY TECHNICAL REPORT


29 December, 2011

Likely within the midst of a short-term correction.


USD/CHF has broken out of its tight hourly range that had developed over the holiday period. However, while under 0.9548, a further

corrective downswing is possible. Focus remains on movements in EUR/CHF over coming days and particularly into next year. EUR/CHF is now nearing our trigger level at 1.2130. This has the potential to kick start the SNB and may lead to a spike higher in USD/CHF if they were to react to further strengthening of the Swiss Franc. Italian 10 year yields continue to trade near and above 7.000%, with the results of todays auction being a likely driver of near-term directional bias. Fresh highs are still anticipated in this maturity, with scope then USD/CHF daily chart, Bloomberg Finance LP for a minor pullback in yields, maintaining downside pressure on USD/CHF. Next year is also likely to see a return to focusing on rollover funding issues for the Italian economy. 10 year yields in Spain and Italy are currently trading at 5.217% and 7.092% versus 6.478% and 7.355%, before the US Dollar based swap agreement. These yields were trading at 5.084% and 6.767%

respectively yesterday.

USD/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Looking to sell.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 5

USD/CAD

DAILY TECHNICAL REPORT


29 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. A sustained break under 1.0220 now suggests 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 rates multimonth triangle pattern. USD/CAD daily chart, Bloomberg Finance LP 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 rates ending triangle pattern, which was part of a major Elliott wave cycle. EUR/CAD has breached the base of an important multi-month distribution pattern. A sustained break beneath 1.3393-79 (19 Sept low/61.8% Fib), now signals an important breakdown into 1.3140 and provides substantial correlation pressure onto EUR/USD.
th

USD/CAD hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Awaiting new buy trade setup above 1.0425.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 6

AUD/USD

DAILY TECHNICAL REPORT


29 December, 2011

Trapped within a larger triangular consolidation.


AUD/USD has unwound from oversold conditions, within the midst of a larger triangular consolidation pattern. The bears must sustain below 1.0000 to further compound downside pressure on the rates multi-year uptrend and push back towards 0.9611. Elsewhere, the Aussie has weakened against the New Zealand dollar. Near-term price activity has mean reverted back over 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 AUD/USD daily chart, Bloomberg Finance LP 72.00 which would signal further unwinding of global risk appetite.

AUD/USD hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await fresh signal.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 7

GBP/JPY

DAILY TECHNICAL REPORT


29 December, 2011

Under 119.38 to trigger a daily bear flag.


GBP/JPY is approaching the 119.38 level under which will trigger a daily bear flag with scope then for a re-test of the 116.84 region. However, it is anticipated that strong support will be seen if a return to 116.84 can be realised. This is in line with our longer-term view, where it is anticipated that a much larger recovery will develop with scope for a return to 163.09 and then potentially on to 192.65. However, signs of basing are still not evident, with the bias still to the downside in the near-term. GBP/JPY daily chart, Bloomberg Finance LP Again, there is scope here for the Sterling element of this pair to offer some strength in the event that Euro-Zone related stresses lead to further Yen cross weakness.

GBP/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 8

EUR/JPY

DAILY TECHNICAL REPORT


29 December, 2011

Under 100.76 now warns of a further extension lower.


EUR/JPY broke out of its tight range bound trade yesterday and in doing so has broken under 100.76. This now negates the larger corrective structure that we had previously highlighted. Instead, this break

suggests scope for a further swing lower back down to levels not seen since 2000/2001. With this in mind a sustained break under 100.76 will target 99.98 (01/06/2001 low) initially and then 88.97 (26/10/2000 low). We now look to see if the current break lower can be maintained, looking for an opportunity to sell should the right set up present itself. EUR/JPY daily chart, Bloomberg Finance LP

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


29 December, 2011

Grinds higher towards the target zone for short entry.


EUR/GBP continues to grind higher towards our target zone for short entry. Hourly structure remains weak and is suggestive of the potential for further downside, to break out of the base of the daily falling channel. With this in mind a return towards 0.8068 is favoured over coming weeks. Shorts in EUR related crosses may be easier to maintain without being subject to false breaks in either direction, now that EUR/USD has broken clearly under the key 1.3146 level. Rising yields in the core Euro-Zone sovereign bond markets is a continued concern and one that may impact the FX markets going EUR/GBP daily chart, Bloomberg Finance LP forward. Within this environment Sterling may well be judged as a shortterm safe haven, further adding to the potential for downside pressure ahead. Focus remains on the Italian bond market where the results of auctions throughout the first half of the year will be watched closely.

EUR/GBP hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

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

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 10

EUR/CHF
Approaches trigger level at 1.2130.

DAILY TECHNICAL REPORT


29 December, 2011

Stop moved to 1.2250 and first objective moved down to 1.2010. This strategy will be negated on a push back over the lower high at 1.2242.

EUR/CHF continues to exhibit a structure in the hourly timeframe warning of the potential for a large extension lower, with scope for 1.2000 initially and then 1.1800. It is anticipated that if a break under the recent low at 1.2170 can be achieved, then momentum follow through may lead to the targeting of clustered stops under both 1.2123/30 and 1.2000.

EUR/CHF daily and weekly charts, Bloomberg Finance LP

Should this cross re-test 1.2000 again, there is likely to be a large number of stops under this level protecting the trades of those who have aligned themselves with the SNB. A failure to remain above this key level will warn of a return to the larger down-trend, as can be seen in the weekly chart insert on the left.

The Italian 10 year sovereign yield remains elevated, trading close to 7.000%. The new year will see further rollover funding, coupled with a likely bout of negative growth in Italy, an unhealthy combination. 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 demanded by investors.

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

www.migbank.com

Sell stop 3 at 1.2130, Objs: 1.2010/1.1526/1.1002, Stop: 1.2250.

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 11

GOLD

DAILY TECHNICAL REPORT


29 December, 2011

Gold weakens after testing its 200-day average as resistance.


Second objective met. Stop moved to 1605. Gold has re-tested 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 Gold daily and weekly charts, Bloomberg Finance LP 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: Special Report Golds mountainous peak at riskbeneath $1600 Bloomberg Countdown CNBC Squawk Box
(BLOOMBERG & CNBC REPORTS)

VIDEO

MIG Bank Gold Webinar video

Gold hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
SHORT 1: 1705, Obj: 1300, Stop: 1605

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 12

SILVER
Weak bounce retested $30.0000.

DAILY TECHNICAL REPORT


29 December, 2011

Silvers weak recovery from oversold conditions has tested key support turned resistance at $30.0000. A sustained close below here now triggers 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

Spot Silver daily chart, Bloomberg Finance LP

silvers 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.

Spot Silver hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

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

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 13

LEGAL TERMS

DAILY TECHNICAL REPORT


29 December, 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


29 December, 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