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Daily Technical Report – 26th January 2011

Technical Trading Strategies : Multi-week timeframe

Technical Report & Charts


Market Strategy/Position Profit Objectives Stop
USD/JPY LONG 3 at 82.55 83.65/85.30/86.95 81.45
Entered on 18.01
GBP/USD SHORT 3 at 1.5830 1.5645/1.5368/1.5090 1.6015
Entered on 25.01
EUR/USD Sell Stop 3 at 1.3465 1.3300/1.3053/1.2805 1.3630

USD/CHF Await basing

USD/CAD LONG 3 at 0.9985 1.0125/1.0335/1.0545 0.9845


Entered on 20.01
AUD/USD SHORT 3 at 0.9905 0.9740/0.9493/0.9245 1.0070
Entered on 20.01
GBP/JPY Remove buy, await basing

EUR/JPY Buy Limit 3 at 109.60 112.50/115.68/119.66 106.70

EUR/GBP Buy Limit 3 at 0.8530 0.8660/0.8818/0.8942 0.8400

EUR/CHF Buy Limit 3 at 1.2810 1.2940/1.3069/1.3206 1.2680

GOLD SHORT 1 at 1376.00 1304.00 1358.00


Entered on 18.01
SILVER Sell Limit 3 at 27.4400 26.3565/24.9900/22.5360 28.8000

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.

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Daily Technical Report – 26th January 2011

USD / JPY

Technical Report & Charts


Strategy: LONG 3 at 82.55, Objs: 83.65/85.30/86.95, Stop: 81.45

USD/JPY is seeing some choppy activity inside last week’s range as the pullback from 83.68
falters. With the rebound from 80.93 to 83.68 trapping sellers of the downside break of support
at 82.34 I see scope for a powerful short squeeze going forward, with support at 81.76/81.85
expected to hold prior to seeing an attack on 83.68 then the 84.51 December swing high, above
which would confirm a base pattern calling for a return to the 85.94 reaction high then
88.14/90.00 over subsequent weeks. I would need to see settlement below 81.76/81.85 to
increase the risk of seeing another crack at key support at 80.24/80.93 then the all time low at
79.75.

Howard Friend, Chief Market Strategist, E-mail: h.friend@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

Technical Report & Charts


GBP / USD

Strategy: SHORT 3 at 1.5830, Objs: 1.5645/1.5368/1.5090, Stop: 1.6015

Cable has broken down sharply after failure to sustain the recent advance beyond 1.6000
signalling completion of the corrective rebound from 1.5345. My medium-term bias remains
negative as the 1.6299/1.5345 bear swing is seen as the first leg of a new multi-month
downtrend, and I look for loss of 1.5665 then 1.5345 to signal a return to psychological 1.5000
then the 1.4230 May swing low as the downtrend gathers pace. I would need to see the re-
capture of 1.6059 from here to suggest that 1.5345 marked the end of the 1.4230/1.6299
correction, with focus then turning to the 1.6299 swing high then 1.6878/1.7043 as the 1.4230
rally extends.

Howard Friend, Chief Market Strategist, E-mail: h.friend@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

EUR / USD

Technical Report & Charts


Strategy: Sell Stop 3 at 1.3465, Objs: 1.3300/1.3053/1.2805, Stop: 1.3630

EUR/USD is showing early signs of stalling in the 1.3700 area as gains which followed the break
above 1.3499 falter. While I have to allow for further marginal gains towards 1.3786/1.3860 I
retain a bearish medium-term bias while 1.3860 caps on a weekly closing basis as I view the
1.4282/1.2874 bear swing as the first leg of a new multi-month downtrend. I look for loss of
1.3499 then 1.3245 to confirm the corrective high, setting the stage for a crack at the 1.2874
swing low then 1.2500/1.2588 ahead of psychological 1.2000 as the 1.4282 bear swing extends.
Settlement above 1.3860 would increase the risk of seeing the 1.4282 November swing high in
a more positive multi-month outlook.

Howard Friend, Chief Market Strategist, E-mail: h.friend@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

USD / CHF

Technical Report & Charts


Strategy: Await base formation

USD/CHF has breached support at 0.9520 to extend the 0.9784 pullback through the lower end
of the 0.9445/0.9638 support zone threatening the basing scenario. Settlement below here
and/or loss of 0.9300 would signal a resumption of the major downtrend towards psychological
0.9000 before a base can be attempted. In the meantime, re-capture of 0.9403 would suggest
that a corrective low is in place, with scope then for an attack on 0.9784 then the 1.0066
reaction high initially as bulls gain control.

Howard Friend, Chief Market Strategist, E-mail: h.friend@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

USD / CAD

Technical Report & Charts


Strategy: LONG 3 at 0.9985, Objs: 1.0125/1.0335/1.0545, Stop: 0.9845

USD/CAD is still holding its bullish footing from the 0.9838 swing low, following DeMark’s TD
Sequential reversal signal. Watch for the base pattern, which is still experiencing historically low
volatility readings, to push sharply higher above prior highs at 1.0004/1.0031 for further recovery
towards reaction highs at 1.0208/257 (40-week average) and 1.0374. Meanwhile, bears would
need to attack intraday reaction low at 0.9909 to seize back control for a return towards
0.9710/0.9819 then 0.9500. This would help generate a major low.

USD/CAD weekly chart, Bloomberg Finance LP


Weekly 1.3065
1.3065
Daily

1.1725
1.1725
Base
Pattern 13
40-week
average
1.0853
1.0853

40-week
average

0.9976 0.9930
0.9930 0.9838
0.9838
0.9976 13
ATR Volatility
ATR measure
Volatility measure
at historic lows
at historic lows

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

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Daily Technical Report – 26th January 2011

AUD / USD
AUD/USD

Technical Report & Charts


Strategy: SHORT 3 at 0.9905, Objs: 0.9740/0.9493/0.9245, Stop: 1.0070

AUD/USD is taking a breath, consolidating following volatile price moves within the larger
sideways pattern. The latest bearish candle pattern reversal (dark cloud cover) from the 1.0256
swing high continues to mount downside pressure. While the prior high caps at 1.0077, expect
risk for a move to 0.9804 intraday swing low then the 0.9537 reaction low. Beneath here would
confirm the topping pattern which would unlock a move to 0.9420 (32.8% retrace), onto 0.9341
(40-week average), then the 0.8770/0.9221 congestion. Watch for additional signs of momentum
rollover on the MACD indicator. Meanwhile, bullish break above 1.0145 would offer some upside
respite into 1.0256/1.0300.

AUD/USD weekly chart, Bloomberg Finance LP


1.0183
1.0183 1.0256
1.0256

Bearish
Bearish
Candle
Candle
0.9388 pattern
patterns
0.9388
0.9406
0.9406 0.9537
0.9537
0.9221
0.9221

40 week
average
0.8770
0.8770

40 week
average

0.8067
0.8067

0.7704
0.7704
MACD
MACD
rolling over
rolling over

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

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Daily Technical Report – 26th January 2011

Technical Report & Charts


GBP / JPY

Strategy: Remove Buy and monitor price action if 127.50 is achieved

GBP/JPY saw a swift extension lower that took place during the second half of 2008 reaching
118.85. This was followed by an initial recovery, reaching 163.09 falling short of the 38.2%
retrace of the 251.11-118.85 fall (169.37). The rate of decline of the subsequent relapse has
gradually slowed forming congestion between 125.00 and 135.00 and in doing so has broken
above long-term falling trend-line resistance. Furthermore, the recent failure to hold under
126.46 may constitute a false break lower, with a push back over 134.23 required to confirm this
move. Should this break higher take place, this would increase the probability of a fresh recovery
leg higher with potential then for a re-test of 145.98 and then 150.83 over coming sessions. In
the meantime short-term structure warns of a move back down to the 127.50 region before
potential for strength. Only back under 118.85 will re-initiate the larger falling trend with scope
for the psychological 120.00 level.
GBP/JPY weekly chart, Bloomberg Finance LP

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

EUR / JPY

Technical Report & Charts


Strategy: Buy Limit 3 at 109.60, Objs: 112.50/115.68/119.66, Stop: 106.70

EUR/JPY remains entrenched in a steady downtrend. However, the recent failure to break back
under the 2010 low at 105.44 and break over long-term trend line resistance suggests that we
may be in the midst of a corrective phase, with scope for further gains to re-test the 115.68 high.
Any such corrective phase would have to push above 119.66 to begin to strengthen the medium-
term outlook. However, an earlier break back under 106.83 and then 105.42 will re-initiate the
larger downtrend.

EUR/JPY weekly chart, Bloomberg Finance LP

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

Technical Report & Charts


EUR /GBP

Strategy: Buy Limit 3 at 0.8530, Objs: 0.8660/0.8818/0.8942, Stop: 0.8400

EUR/GBP exhibits a longer-term structure that suggests the correction off the 2008 high at
0.9812 may now be complete. However, the more recent setback that has followed the 0.8068-
0.8942 recovery, returning below 0.8532, weakened the developing positive structure.
Yesterday’s break out of the top side of the 0.8142-0.8648 trading band hints at the potential for
a possible breakout. Stronger filters are placed at 0.8068/0.8942. The overall structure is still
weighed upon by the triangular consolidation that has been developing in a weekly timeframe
that has seen failed breaks to the upside and the downside, giving further credence to range
trade. A tentative breakout to the upside may be developing but with a pullback sought for
potential long positions.
EUR/GBP weekly chart, Bloomberg Finance LP

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

Technical Report & Charts


EUR /CHF

Strategy: Buy Limit 3 at 1.2810, Objs: 1.2940/1.3069/1.3206, Stop: 1.2680

EUR/CHF has seen an initial recovery off the recent all time low at 1.2402. This is coupled with an
evolving MACD bull divergence in the weekly timeframe. The last two weeks have seen a clear
push back over 1.2766 which further increases the likelihood of a higher low forming versus
1.2402, for a fresh swing to the upside. A short term pullback is now sought before considering
long positions. Shorter term structure remains supportive with scope for a fresh swing higher to
complete an initial recovery phase.

EUR/CHF weekly chart, Bloomberg Finance LP

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 454

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Daily Technical Report – 26th January 2011

Spot Gold

Technical Report & Charts


Strategy: SHORT 1 at 1376.00, Obj: 1304.00, Stop: 1358.00

Gold’s corrective wave is tentatively stalling ahead of key breakout level at 1320. Look for some
potential unwinding in the short-term. Meantime, probabilities are still skewed for the extended
downside reaction, with distribution pattern and multiple DeMark signals still weighing overhead.
Watch for further scope into confluence zone at 1280-1260 (which include secondary uptrend
channel). Meantime, confirmation above the prior swing high at 1379 and 1400 would be
required to offer a recovery rally back to the all-time highs at 1431.25, ahead of psychological
1500.00 (also secondary channel ceiling).

Spot Gold weekly chart, Source Bloomberg Finance LP

1431
1431

13

1226
1226

Confluence
Trend
1157
1157 Channel
Zone

1006
1006 1044
1044
40 week
40 week
average
average

Trend
Channel

682
682

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

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Daily Technical Report – 26th January 2011

Spot Silver

Technical Report & Charts


Strategy: Sell Limit 3 at 27.4400, Objs: 26.3565/24.9900/22.5360, Stop: 28.8000

Silver is tentatively stalling, having already corrected almost 15% from the major highs. We look
to sell on a potential bounce into intraday TDST level at 27.44. Meantime, continue to expect the
V-shaped topping pattern to resume through 26.3565, then towards the 24.9900 reaction low
and 22.5360/22.3787 (38.2% retracement/40-week average). The bulls would need to recapture
that all-important psychological glass-ceiling at 30.0000 to ignite silver’s impressive bull-run
higher into the 31.2375 swing high then the 33.7100 projection target.

Spot Silver weekly chart, Bloomberg Finance LP


31.2375
31.2375

14.6400
14.6400

ATR
ATR
Volatility
Volatility
8.4587 still
still high
high
8.4587

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

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Daily Technical Report – 26th January 2011

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