DAILY TECHNICAL REPORT

11 January, 2012
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 Sell limit 3

ENTRY LEVEL 1.2680 1.5760

OBJECTIVES/COMMENTS

STOP

1.2530/1.2150/1.1877 1.5600/1.5400/1.5150 Await New Buy Trade Setup above 80.00. Await fresh signal with a bias to shorts. Awaiting New Buy Trade Setup above 1.0425.

1. 2850 1.5860

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

Sell Stop 3

1.0145

1.0040/0.9860/0.9660 Await fresh signal. Await fresh signal.

1.0270

Sell limit 3 SHORT 3

0.8300 1.2130

0.8222/0.8142/0.8068 1.2010/1.1526/1.1002 Await New Trade Setup Exited at 30.0000. Achieved Price Objective One.

0.8378 1.2250

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.

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

14, rte des Gouttes dOr CH-2008 Neuchtel Switzerland Fax +41 32 722 81 01info@migbank.com www.migbank.com

EUR/USD EUR/USD

DAILY TECHNICAL REPORT

11 January, 2012

EUR/USD (Daily)

BERMUDA TRIANGLE REVERSAL FROM 2 YEAR UPTREND

Temporary bullish unwinding targets 1.2870.

EUR/USD is still attempting to unwind from oversold conditions, having recently broken under the major 2011 low.
BEARISH CHANNEL

BREAKOUT ZONE

The major trend remains bearish and is holding within a declining channel range. While price activity holds here, we prefer to sell into forthcoming rallies, which are likely to be temporary short covering.

(1.4000)

200-DMA (1.3949)

HISTORY REPEATS

Watch for near-term resistance to come in at 1.2820/70, then 1.2920 and 1.3000/77 (psychological/04
th

Jan high). Only a sustained break above

R1 (1.3077)

1.26-1.2530 TARGET

here will offer a stronger recovery into 1.3197 (see chart insert). Meanwhile, the bears need to push back beneath this years new low at 1.2666 to resume the major downtrend into 1.2600-1.2530 (target zone),

BEARISH 3 CROW CANDLE PATTERN

EUR/USD daily chart, Bloomberg Finance LP

MAJOR HIGHS

toward 1.2150.
12 MONTH HIGH

US DOLLAR INDEX
EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6%

Inversely, the USD Index is steady, having triggered a bearish dark cloud candle pattern signal from 12-month highs. The move also coincided with old resistance at 81.31/44 (Nov 2010/Jan 2011 peaks).

KEY SUPPORT

(79.50)

Expect further unwinding from overbought conditions into 80.00/79.50 (psychological/pivot level). This level is likely to help re-launch the greenbacks recovery (which was already up 10%), part of our bullish

BREAKOUT ZONE

cycle strategy over the multi-month horizon.

200-DMA (76.29)

Special Report: EUR/USD A Fall From Grace ? Decline Targets 1.3770/1.3410. Webinar: Why the US dollar is likely to gain up to 30% in 6-12 months. Media Interview: Bloomberg

VIDEO

DEMARK BUY SIGNALS

13

9
S-T TREND L-T TREND STRATEGY
Sell Stop 3: 1.2680, Obj: 1.2530/1.2150/1.1877, Stop: 1.2850

USD Index daily chart, 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

11 January, 2012

Return to top of recent range sought.

GBP/USD remains mired in a tight range bound environment, with hourly trade this week remaining between 1.5780 and 1.5362. Medium-term, there is scope for a re-test of long-term trend-line support from 1.3503, currently at 1.5150. Given the general yield environment in some core EUR denominated bond markets, there is scope for Sterling to be viewed as a relative safe haven with the large devaluation of 2008 being deemed as sufficient. With this in mind, we could trade the short-term range, or await a fall to long-term trend-line support. GBP/USD daily chart, Bloomberg Finance LP Given the general US Dollar positive

environment, it is deemed better to wait for higher levels to attempt short exposure. Our bias remains negative in EUR/GBP, thus any weakness in GBP/USD is likely to be less dynamic than US Dollar strength seen elsewhere.

GBP/USD hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 1.5760, Objs: 1.5600/1.5400/1.5150, Stop: 1.5860.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 3

USD/JPY
POST INTERVENTION RETRACEMENT (PIR I) MULTI-YEAR PATTERN ANTICIPATES BREAKOUT (85-80)

DAILY TECHNICAL REPORT

11 January, 2012

QUAKE SHOCK!

Bears break from multi-day range extends the retracement (PIR).

USD/JPY has weakened sharply beneath 78.24 (DeMark Level), as price broke from a multi-day trading range (see hourly chart below).

G7 MOVE HIGH POST BOJ MOVE (II) HIGH

Confirmation beneath 77.25 (pivot level) now helps trigger a third price retracement, that we had been expecting, back to pre-intervention levels and potentially even a new post world war record low beneath 75.35.

PIR II

POST BOJ MOVE (III)

PIR III

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.

DEMARK BUY SIGNAL AHEAD OF NEW POST WWII LOW (75.35)

USD/JPY daily chart, Bloomberg Finance LP

POST BOJ MOVE (III)

USD/JPY (120 MIN)

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.

DEMARK SELL SIGNAL

KEY PIVOT LEVEL (77.25) TRIGGERS POST INTERVENTION RETRACEMENT

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 Interviews: CNBC Squawk Box & Bloomberg Countdown (Reports: CNBC / Bloomberg)

S-T TREND

L-T TREND

STRATEGY
Awaiting Renewed Buy Trade Setup above 80.00.

USD/JPY 120 min 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

11 January, 2012

Return towards the 200 DMA favoured medium-term.

USD/CHF has potentially completed an initial phase lower from the recent high at 0.9596. Scope is now seen for a further swing lower to test 0.9306, under which will strongly favour a re-test of the 200 day moving average. In the absence of the SNB, it is anticipated that a return to 0.8709 (the current location of the 200 day moving average) would be possible, ahead of a further phase higher. However, we cannot divorce movements in USD/CHF from those in EUR/CHF, where the ability of the SNB to successfully maintain its floor in EUR/CHF at 1.2000 is key. Fresh highs are still anticipated in 10 year USD/CHF daily chart, Bloomberg Finance LP Italian sovereign yields, maintaining downside pressure on USD/CHF. 10 year yields in Spain and Italy are currently trading at 5.474% and 7.046% versus 6.478% and 7.355%, before the US Dollar based swap agreement. These same yields were trading at 5.563% and 7.140% respectively yesterday.

USD/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Await fresh signal with a bias to shorts.

www.migbank.com

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

USD/CAD
USD/CAD (WEEKLY)
BULLISH TRIANGLE PATTERN

DAILY TECHNICAL REPORT

11 January, 2012

USD/CAD (Daily)

Weakening from pattern ceiling into key support at 1.0080.

USD/CAD is weakening further from its triangle pattern ceiling, which coincided with an intraday DeMark exhaustion signal and daily bearish evening star candle pattern (see hourly/daily charts). However, the chart structure remains positive and so we wait for a directional confirmation above 1.0425 before initiating a buy trade setup.

CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY DEMARK BUY SIGNAL

200-DMA (0.9920)

Until then, intraday traders might be attracted to an active hit and run short trade opportunity back into key support at 1.0080 (see hourly chart).

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 multi-

USD/CAD (120 MIN) USD/CAD daily chart, Bloomberg Finance LP

DEMARK SELL SIGNAL

month triangle pattern.

DEMARK SELL SIGNALS

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 (see top chart insert).

BEARISH EVENING STAR PATTERN

EUR/CAD, which tends to share a positive correlation with EUR/USD, is temporarily unwinding from oversold conditions. However, the previous

KEY SUPPORT (1.0080)

structural breach under the rates multi-month distribution pattern continues to favour downside pressure into 1.2760 (10 Jan 2010).
th

S-T TREND

L-T TREND

STRATEGY
Awaiting New Buy Trade Setup above 1.0425.

USD/CAD 120min 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
(DAILY)

DAILY TECHNICAL REPORT

11 January, 2012

Capped under 200-day average (1.0413).

DEMARK SELL SIGNALS

AUD/USD remains capped under its 200-day moving average which has been holding steady around 1.0413 for over 3-months.

200-DMA (1.0413)

While the recent daily bearish evening star pattern continues to weigh beneath resistance at 1.0387, we remain watchful for new short opportunities.

KEY ZONE (1.0000)

61.8%

Our cycle analysis remains bearish and favours downside pressure back into parity, then 0.9862 (15 Dec low) and 0.9664/20 (23 Nov low).
th rd

Keep in mind that such a move would signal a break from the multi-month distribution pattern and the rates 3-year uptrend (see chart insert).

(0.8046)

AUD/USD daily chart, Bloomberg Finance LP

AUD/USD (120 MIN)
DEMARK SELL SIGNAL

Elsewhere, the Aussie dollar is continuing to weaken sharply against its neighboring New Zealand counterpart. Near-term price activity is breaking from a multi-month trading range and now testing its 200-day MA which is currently trading at 1.2968. Expect further setbacks over the multiday/week horizon into support at 1.2834 and 1.2319.

PIVOT LEVEL (1.0220)

The Aussie dollar remains steady against the Japanese yen, while still holding within its neutral contracting trading range. Watch for key support

RANGE BREAKOUT

at 76.98 to unlock further downside into 74.81. Such a scenario would signal further unwinding of global risk appetite.
BEARISH (DAILY) EVENING STAR PATTERN R1 (1.0387)

S1 (1.0146)

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3: 1.0145, Objs: 1.0040/0.9860/0.9660, Stop: 1.0270

AUD/USD 120 min 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
Consolidates short-term.

DAILY TECHNICAL REPORT

11 January, 2012

GBP/JPY has been trading largely sideways after the break under the 119.00 low last Friday, ending hopes of a continuation of the recovery structure from this same level.

The hourly timeframe suggests that last weeks break under 119.00 has the potential to re-test of the region close to 116.84. Should this move take place strong support would be anticipated close to this level.

We can also draw parallels with EUR/JPY where initial signs of exhaustion are evident in the hourly timeframe. However, a further

swing lower cannot be ruled out, so the formulation of a long strategy is best done closer to 116.84, or in the event that we see a durable swing GBP/JPY daily chart, Bloomberg Finance LP higher. Our longer-term view is based on the potential for a much larger recovery to develop with scope for a return to 163.09 and then potentially on to 192.65. As suggested above, signs of basing are still not evident in the medium-term timeframe.

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

11 January, 2012

Potential longer-term region of value.

EUR/JPY is stabilising in the hourly perspective after briefly breaking the support of a falling wedge in the daily timeframe. USD/JPY is trading in tight hourly ranges, thus the movement in EUR/JPY is largely a function of EUR/USD. With this reasoning in mind we cannot rule out a re-test of the region near the all-time low at 88.97. To turn the near-term outlook more bullish, a break over the resistance of the falling wedge is required, currently at 99.65. As with any pair that includes the EUR, we will continue to monitor Italian yields, anticipating a test of the 7.500% level in the 10 year maturity. EUR/JPY daily chart, Bloomberg Finance LP Longer-term, structure in the Italian 10 year suggests that

7.500% may not be a durable ceiling, with scope for yields beyond 7.500%. In the absence of core Euro-Zone stresses, the current region of trade would be deemed one of good value for the contemplation of long positioning. It is this reasoning that leads us to consider the current trading zone as a possible region of value, for a longer-term recovery.

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

11 January, 2012

Pullback sought to enter short positions.

The strategy below will be negated on a break under 0.8222 and thus removed from the daily technical report. EUR/GBP remains in a likely corrective phase in the hourly timeframe. Structure is still considered bearish and thus a lower high is sought in the region of 0.8300. Medium-term a return to 0.8068 is favoured with scope then for the key low made at the end of 2008 at 0.7694. The nature of the way in which this market trades has changed somewhat over recent weeks with more impulsive moves and fewer false breaks. This is partly attributed to the breakdown in EUR/USD under 1.3146, which has assisted short positioning in other EUR EUR/GBP daily chart, Bloomberg Finance LP crosses too. Of continued concern is the elevated yield environment, particularly in the Italian sovereign bond market. Our expectation of further downside is made on the assumption that, in a rising yield environment in parts of the core Euro-Zone, Sterling will be deemed as a safe haven of sorts. Focus remains on the Italian bond market where yields are once again trading over 7.000%, with a host of rollover auctions scheduled for the first half of the year.

EUR/GBP hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 0.8300, Objs: 0.8222/0.8142/0.8068, Stop: 0.8378

www.migbank.com

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

EUR/CHF

DAILY TECHNICAL REPORT

11 January, 2012

Further weakness anticipated following push under 1.2130.

EUR/CHF is consolidating close to the old key lows at 1.2131 in the hourly timeframe. Hourly structure remains bearish suggesting further weakness ahead, with scope for a re-test of 1.2000 and then potentially 1.1800. The only clear risk to our trading bias is the potential for a spate of intervention by the SNB to protect the region near 1.2000. The longer-term bearish bias is derived from a study of longer-term price action (in the weekly timeframe), where a failure to break over the 50 week moving average leads us to conclude that the larger downtrend is still dominant. EUR/CHF daily and weekly charts, Bloomberg Finance LP Little respite has been offered to the Italian sovereign market with the 7.500% threshold in sight in the 10 year maturity. Also of concern is the longer-term technical structure of this yield which suggests that 7.500% may not cap this 10 year rate over an extended horizon. The negative rates currently available on short dated German sovereign debt are a good example of how return of capital can be deemed more important then return on capital in certain market environments. Thus, low rates of deposit available on Swiss Franc deposits are unlikely to stop the Swiss Franc being sought as a safe haven.

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

www.migbank.com

Short 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
CYCLE FAVOURS DECLINE INTO $1300 & $1040-00
DEMARK SIGNAL WARNED OF GOLDS OVERBOUGHT CONDITIONS

DAILY TECHNICAL REPORT

11 January, 2012

DOUBLE TOP

Bulls retest the 200-day average.

Gold is re-testing its 200-day average, which was recently broken for the

$1800 $1760
TREND CHANNEL
(12 YEARS)

first time in 3 years. The previous move was triggered by a multi-month triangle pattern breakout (see both daily and intraday charts). A number of bargain hunting trend-followers will still be watching for any potential recovery back above the 200-day average which is currently

$1670

$1600 $1532
200-DMA BROKEN FIRST TIME IN 3 YEARS! CONFIRMATION BENEATH $1532 TARGETS $1300

trading at $1636. Bulls would need strong confirmation above here (on a close basis). Failure to do so will heighten risk for a much larger decline that we have been anticipating, if a weekly close beneath $1530 is confirmed. Our cycle analysis continues to highlight downside targets into $1300 and perhaps

GOLD KEY LEVELS

DOWNSIDE: $1600 / $1530 / $1300 - UPSIDE: $1670 / $1760 / $1800

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 this coming summer of 2012.

Gold daily and weekly charts, Bloomberg Finance LP

GOLD (120 MIN)
SHARP DECLINE RE-TEST OF 200-DAY MA NEEDS FURTHER CONFIRMATION

Please select links for in-depth Gold coverage: Special Report Golds mountainous peak at riskbeneath $1600 Media Interviews: Bloomberg Countdown
POTENTIAL BREAKOUT?

VIDEO Webinar
Reports: (BLOOMBERG & CNBC)

CNBC Squawk Box

S-T TREND

L-T TREND

STRATEGY
Awaiting New Trade Setup.

Gold hourly chart, Bloomberg Finance LP

www.migbank.com

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

SILVER
Gold/Silver "Mint" Ratio Silver (Daily)
DEMARK SELL SIGNALS

DAILY TECHNICAL REPORT

11 January, 2012

Probing the $30.0000 level.

Exited at 30.0000. Achieved Profit Target One. Silvers weak recovery from oversold conditions is now probing key psychological resistance at $30.0000 (see intraday chart below). Near-term support at 28.6000 acts as our downside trigger level that would help unlock a resumption lower into 26.1600 (29 pattern low). 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
th

13 YEAR LEVEL UNWINDING 70% FROM OVERSOLD TERRITORY

200 DMA (36.1263)

Dec-hammer

KEY SUPPORT (26.0700)

Spot Silver daily chart, Bloomberg Finance LP

SILVER (120 MIN)
R1 (30.0000)

(61.8% Fib-1999 bull market) and $20.0000. This would still maintain silvers long-term uptrend and help offer a potential buying opportunity for

S1 (28.6000) BULLISH DAILY HAMMER PATTERN (26.1600)

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.

PSYCHOLOGICAL (30.0000)

RE-TEST

S-T TREND

L-T TREND

STRATEGY
Exited at 30.0000. Achieved Profit Target One.

Spot Silver hourly chart, 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

11 January, 2012

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

11 January, 2012

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

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