DAILY TECHNICAL REPORT

5 July, 2011
MARKET 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

ENTRY LEVEL 1.4420

OBJECTIVES/COMMENTS

STOP

1.3970/1.3660/1.3410 Await fresh signal.

1.4570

LONG 3 Buy limit 3

80.70 0.8365

82.20/83.30/85.80 (Entered 23/06/2011) 0.8460/0.8750/0.8951 Await Buy Trade Setup (Neutral).

79.80 0.8300

USD/CAD AUD/USD GBP/JPY EUR/JPY SHORT 3 Buy limit 3 Buy limit 3 SHORT 3 SHORT 3 117.70 0.8880 1.1960 1510 34.4250 Sell Stop 3 1.0630

1.0390/1.0205/0.9700. Await fresh signal. 116.70/114.70/113.50 (Entered on 04/07/2011) 0.8950/0.9069/0.9150 1.2060/1.2260/1.2560 1475/1440/1410 (Entered 24/06/2011) 32.3125/26.9600/23.3000 (Entered 24/06/2011)

1.0780

118.70 0.8820 1.1860 1550 36.7750

Bijoy Kar, CFA

EUR/GBP 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 [email protected] Switzerland www.migbank.com

MIG BANK Tel +41 32 722 81 00

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

EUR/USD EUR/USD
EUR/USD (Daily 1.5 years)
PSYCHOLOGICAL (1.5000)

DAILY TECHNICAL REPORT

5 July, 2011
13
TD EXHAUSTION SELL SIGNALS

Reactionary bounce under pressure into resistance at 1.4550/67.

EUR/USDs reactionary bounce is losing momentum as it comes under pressure into key resistance at 1.4550/67 (a confluence of both the multiweek triangle pattern ceiling and 76.4%/78.6% Fib-08th June price swing). We watch for this area to cap recent bullish gains for a return back into the lower boundary of this critical triangle pattern. Key downside trigger levels remain at 1.4148 (38.2% Fib-Jan 2011 uptrend) and 1.4000 (psychological).

KEY POINT (1.4711/30)

32.8% (1.4148)

BREAKOUT RISK TRIGGERS WAVE 3 INTO 1.3770/1.3410

50% (1.3903) 61.8% (1.3659)

200 DMA (1.3895) UPTREND (1.3670)

WAVE OBJECTIVE (1.3370)

A sustained close below 1.4000/1.3970 (Psychological/May swing low), will accelerate this impulsive (wave 3) into 1.3903/1.3895 (50% Fib/200-day MA), thereafter shifting prior upside trend-followers back into 1.3670 (61.8% Fib-Jan 2011 uptrend). Only a sustained close above the Trichet high at 1.4653 and most importantly 1.4711/30 will lead us to re-evaluate. Inversely, the US dollar index still needs to extend its recovery above 76.36
+27% +19%

EUR/USD daily chart, Bloomberg Finance LP

US DOLLAR INDEX (Daily 2 years) US$ INDEX (Weekly) (4 YEARS)

200-DMA (77.03)

NEXT STAGE RALLY MUST BREAK ABOVE 76.36

(23rd May high), to confirm a multi-month w-shaped base pattern for an extension into 77.01 and 78.03 (50%/61.8% Fib-Jan 2011 Decline). Further upside scope is also being supported by increased long positions on our COT liquidity, which has been positive for the last 4 weeks.

TD EXHAUSTION BUY SIGNAL 13

FALLING WEDGE PATTERN

W
TD EXHAUSTION BUY SIGNAL BASE

TRIGGER (15000)

STILL UNWINDING!

SPECIAL REPORT : EUR/USD A Fall From Grace ? Decline Targets 1.3770/1.3410.

Please select link: REPORT

VIDEO
EXTREME NET US $ SHORT POSITIONS

13

COT LIQUIDITY

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3 at 1.4420, Obj: 1.3970/1.3660/1.3410, Stop: 1.4570

US Dollar Index daily and weekly chart, with COT liquidity, Bloomberg Finance LP
www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 2

GBP/USD

DAILY TECHNICAL REPORT

5 July, 2011 Consolidation continues in the hourly timeframe.
GBP/USD has relapsed after forming a lower high at 1.6442. This weakness has now clearly broken under weekly channel support. Coupled with the push under 1.6058, weakens the outlook further. The bounce that has occurred from the region close to the 50 week moving average is now testing the old triangular support as resistance. Given the earlier breakout from weekly consolidation, we favour the formation of a lower high in this region for a return to weakness. We now seek a break out of the recent consolidation with a bias towards the downside while below 1.6141.

GBP/USD daily chart, Bloomberg Finance LP

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: [email protected], Phone: +41 32 7228 424 3

USD/JPY
USD/JPY (Daily 1 YEAR)

DAILY TECHNICAL REPORT

5 July, 2011
1 POST INTERVENTION RETRACEMENT (PIR)

Renewed bullish probes approach upside trigger at 81.40.

USD/JPYs renewed bullish probe from that all-important psychological 80.00 zone, is once again approaching our upside trigger at 81.40 .

84.50
TDST (83.90)

EARTHQUAKE SHOCK!

83.30
POST G7 MOVE HIGH

We remain bullish in the medium to long-term, watching for an eventual break of our trigger point currently at 81.40 (multi-week triangle pattern),
TRIGGER POINT (81.40)
82.00

thereby resuming the potential new structural bull-cycle. To signal an impulsive move higher, we still need a sustained close above strategic levels at 82.00 (post G7 intervention high) and 83.30 (post Earthquake shock high), then onwards into 85.50 (07th April high). The bulls must extend gains past 85.50 to trigger a renewed attack onto

MAJOR TRIANGLE (WAVE IV) SIGNALS FINAL MOVE DOWN

TDST (81.15)

USD/JPY Weekly (2007 2011)

ENDING DIAGONAL PATTERN BREAKOUT TARGET ZONE (88.00)

88.00 (Major ending diagonal pattern ceiling).

CONFLUENCE WAVE 2 SUPPORT

Good support still holds into the confluence zone around 80.00 (a level the BOJ will likely be watching) and 79.80 (61.8% Fib). Only a close below here will resume the retracement lower into 78.80.

NEW POST WWII RECORD LOW !!! (76.25)

MONTHLY TD EXHAUSTION BUY SIGNAL

13

WAVE 5

USD/JPY daily and weekly chart, Bloomberg Finance LP

www.migbank.com

S-T TREND

L-T TREND

STRATEGY LONG 3 at 80.70, Obj: 82.20/83.30/85.80, Stop: 79.80

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 426 4

USD/CHF
Approaches daily wedge resistance.

DAILY TECHNICAL REPORT

5 July, 2011

USD/CHF continues to trade within the confines of a daily/weekly wedge. However, we are now approaching the resistance of this structure in the daily timeframe, currently at 0.8540. After printing a fresh annual low a substantial recovery followed potentially setting up a reversal pattern. There is clearly an interaction between EUR/CHF and USD/CHF. As mentioned later in this report, EURCHF looks set for a substantial recovery higher. For this reason we see scope for a long term base to form in the current region. This view is bolstered by a bullish MACD divergence in the daily timeframe. USD/CHF daily chart, Bloomberg Finance LP

USD/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Buy limit 3 at 0.8365, Objs: 0.8460/0.8750/0.8951, Stop: 0.8300.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 5

USD/CAD
USD/CAD (Daily) EXPANDING PATTERN INITIAL FAILURE AT RESISTANCE 200-DMA
USD/CAD (Weekly )

DAILY TECHNICAL REPORT

5 July, 2011
FAILED BREAKOUT FROM FALLING WEDGE CHANNEL

Sharp correction holds steady.

USD/CADs sharp correction is holding steady, after the rates expanding pattern initially failed at key resistance into 0.9906-0.9915 (38.2% Fib-Sept 2010 decline & 200 DMA). Next support can now be seen at 0.9556/46 (76.4%/78.6% Fib). Given the overextended nature of this correction, we expect to see further unwinding from around the latter support area. Meantime, our medium/long-term perspective has been neutralised by a

NEXT SUPPORT (0.9556/0.9546) FALLING WEDGE PATTERN

TD EXHAUSTION BUYSIGNAL

0.9059

13

failed breakout from the multi-month wedge pattern (see weekly chart). Indeed the bulls must recapture 0.9913/15 (27th June swing high/38.2%

USD/CAD daily and weekly chart, Bloomberg Finance LP

MAJOR RESISTANCE CHF/CAD (Daily) 13
TD EXHAUSTION SELL SIGNAL

Fib), to achieve a sustainable recovery into 0.9968 (17th March high) and 1.0000 (parity level).

38.2% (1474.69) 200-DMA (1.3735) 50% (1474.69) 61.8% (1474.69)

Looking at other CAD pairs, we see that EUR/CAD is slightly weaker, within a volatile upward range, while holding above its 200-day average. CHF/CAD, which can be used as a gauge for global risk appetite, is holding steady after its sharp downside reversal, following a DeMark
200-DMA (1.0684)

exhaustion signal. Key support at 1.1193 (38.2% Fib-Nov 2010 uptrend).

EUR/CAD (Daily)

S-T TREND

L-T TREND

STRATEGY
Awaiting Trade Setup (Neutral).

EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 6

AUD/USD
AUD/USD (Daily 1 YEAR) 13
TD EXHAUSTION SELL SIGNALS

DAILY TECHNICAL REPORT

5 July, 2011 Reactive bounce triggers exhaustion signal.
AUD/USDs reactive bounce from key support at 1.0443 (TDST line), is still weidghed by a DeMark exhaustion signal last seen at the May peak. We are monitoring the bearish signal and have opened a sell trade order.

13

1.0256 1.0200

RALLY FROM KEY SUPPORT UNDER PRESSURE

200-DMA (1.0181) KEY SUPPORT

Keep alert to the fact that our DeMark indicator has also flagged exhaustion sell signals across both weekly and daily timefranes. Meantime, our downside trigger level remains at 1.0443 (TDST line), to unlock extended downside scope into 1.0359 (50% Fib), then 1.0205 and 0.9990.

0.9804

V-SHAPE UPSIDE REVERSAL

0.9706

0.9537

Elsewhere, the Aussie dollar remains weak against the New Zealand dollar, after its recovery failed into key resistance at 1.3169 (61.8% Fib). The pair
13
TD EXHAUSTION SELL SIGNALS

AUD/USD daily chart, Bloomberg Finance LP

AUD/NZD (Daily) AUD/JPY (Daily)

is still locked within its new bear cycle structure while it holds beneath this level.

The Aussie dollar is also losing some momentum against the Japanese yen,
38.2% (84.09) 50% (82.25) 61.8% & 200-DMA CAPS BEAR MKT 200-DMA (83.65) 61.8% (80.42)

as the cross rate shys away from its multi-week triangle pattern ceiling. POTENTIAL BREAKOUT ADDS TO RISK AVERSION

Watch for a potential downside breakout through support at 84.09 (38.2%March 2011 advance), which would offer sharp corrective activity and add further risk aversion to the global market environment.

KEY SUPPORT 1.2642 / 1.2209

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3: 1.0630, Obj: 1.0390/1.0205/0.9700. Stop: 1.0780

AUD/NZD and AUD/JPY daily charts, Bloomberg Finance LP

www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 7

GBP/JPY

DAILY TECHNICAL REPORT

5 July, 2011 Trade continues within a falling daily channel.
GBP/JPY has tested below the 61.8% retrace of the 122.36-140.03 rise seen earlier in the year. This now weakens the near-term structure in favour of a relapse towards 122.36, thus also greatly weakening the longer-term recovery structure that we had previously expected. Focus remains on the daily bear channel that has been in place for the last three months, with scope now for a test of the channel support, currently at 125.50. Todays breach of 130.09 suggests that the recovery witnessed since 128.17 may have further to run. We look to see if the current recovery has the potential to test the resistance of the falling daily channel.

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 re-sell higher.

www.migbank.com

EUR/JPY

DAILY TECHNICAL REPORT

5 July, 2011 Short-term exhaustion pattern warns of weakness ahead.
EUR/JPY found initial support near the 50 week moving average leading to a period of consolidation in the daily timeframe. We remain wary of the recovery seen from 106.61 to 123.33 given the break under 116.00, which has significantly weakened the longer-term structure. Both the 50 week and 200 day moving averages lie close to the key low at 113.42, making a break under this level a material breach to the downside. Failure to break under 113.50/42 in recent trade has offered some nearterm strength, however, for the reasons given above, the longer-term structure remains weak while under 117.90. Our focus is currently in the short-term, where we have witnessed an exhaustion pattern in the hourly structure. This now favours a relapse back towards 115.13 initially.

EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Short 3 at 117.70, Objs: 116.70/114.70/113.50, Stop: 118.70.

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 9

EUR/GBP

DAILY TECHNICAL REPORT

5 July, 2011 Pullback sought before entering longs.
EUR/GBP has today broken over the key high at 0.9043. This now ends the possibility of any further corrective weakness, following the structure seen from this same level. We will monitor price action close to this high to guage the strength of the recovery seen from 0.8722. Longer-term we view the recent pullback as being counter-trend with a return favoured to the larger rising trend, that has been re-asserted following the breakout from weekly triangular consolidation. Back under 0.8611 is required to change our long-term bullish bias. Short-term structure present since 0.8722 suggests scope for a further leg higher, however, we look for a pullback before entering into long positions.

EUR/GBP weekly chart, Bloomberg Finance LP

EUR/GBP hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Buy limit 3 at 0.8880, Objs: 0.8950/0.9069/0.9150, Stop: 0.8820

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424 10

EUR/CHF

DAILY TECHNICAL REPORT

5 July, 2011 Multiple timeframes suggest further recovery.
EUR/CHF has confirmed a false break lower in the daily timeframe. Combined with the bullish MACD divergences seen in the daily and weekly timeframes, the outlook has now swung to being bullish. Also evident is a bullish engulfing candlestick pattern in the weekly timeframe. These signals combined now offer scope for a continuation of the recovery already witnessed. We now seek a pullback for the formation of a higher low and a resumption of strength. A prolonged and possibly substantial recovery remains viable.

EUR/CHF weekly chart, Bloomberg Finance LP

EUR/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND
Buy limit 3 at 1.1960, Objs: 1.2060/1.2260/1.2560, Stop: 1.1860.

www.migbank.com

11

GOLD
PSYCHOLOGICAL (1600) Gold (Weekly) TD RISK (1530) Gold in EUR TD EXHAUSTION SELL SIGNAL Gold in USD TD EXHAUSTION SELL SIGNAL

DAILY TECHNICAL REPORT

5 July, 2011 Downside trigger maintains extension lower.
Golds downside trigger at 1510/11 has capped the recent pullback and now resumes corrective activity which is already broadly playing out in Gold priced in other key currencies, such as Euro, Swiss franc, and commodity
TRIGGER

13
Gold in CHF

BEARISH ENGULFING REVERSAL FROM MULTI-YEAR BULL CHANNEL

Gold in AUD

driven

rates

Aussie

dollar

and

South

African

rand.

Gold in ZAR

The larger corrective move on Gold in US dollar terms has also been pressured by a recent DeMark exhaustion signal, which was followed by a bearish engulfing reversal from a multi-year bull-channel. (See chart). Bears are likely to push into 1474.69 (38.2% Fib) and 1442.92 (50% Fib),

38.2% (1474.69)

40 WEEK AVERAGE

50% (1442.91)

with overshoot risk into 1422.30/1411.13 (200-day MA/61.8% Fib). It is also worth continuing to monitor Golds COT liquidity readings which

61.8% (1411.13) 200-DMA (1422.30)

is weakening back into a key structural level. Keep in mind that a sustained break of this area would threaten 1.5 years of sizeable long gold positions. The bulls need to push back above 1553.65 (06 June high), in order to offer a recapture of the all-time high at 1577.57. Only a close above there would confirm a resumption of the major uptrend into the next psychological glass-ceiling at 1600.00.

GOLD COT Net Large Speculation Positions

?
OVER 1.5 YEARS OF SIZEABLE LONG GOLD POSITIONS UNDER THREAT ONCE STRUCTURAL RANGE BREAKS

S-T TREND

L-T TREND

STRATEGY SHORT 3 at 1510, Obj: 1475/1440/1410, Stop: 1550

Gold weekly, daily chart and COT Liquidity measures, Bloomberg Finance LP
www.migbank.com

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454 12

SILVER
Silver HITS 1980 Spike High! Silver (Daily)
TD EXHAUSTION SELL SIGNALS

DAILY TECHNICAL REPORT

5 July, 2011
13

Resistance around 38.80 caps.

Silver remains capped beneath resistance around 38.80 and continues to favour a resumption lower. (Note, the prior correction had fallen just over 30% in only 5 days, which may have signalled a peak in global risk appetite).

13

30% CRASH IN 5 DAYS! OFFERS PEAK IN RISK APPETITE

38.2% (34.0015) 50% (29.1244) 200 MA (31.7962)

We have opened a short position at 34.4250, looking for potential moves into 32.3479/32.3125 (38.2% Fib-1999 bull market/12th May swing low),
38.2% (32.3135)

offering a downside extension into 31.7819 (24th Feb low) and 30.0000 (old psychological level).

Gold/Silver Ratio 50% (26.9150)

Key macro support exists at 26.9600 (50% Fib-1999 bull market) and would still mean that silvers long-term uptrend remains intact.

13 YEAR LEVEL UNWINDING 37% FROM OVERSOLD TERRITORY

37%

61.8% (21.5165)

We also continue to watch silvers relative performance against gold, which is currently unwinding (already up 37%), from extreme oversold conditions.

Bulls need to push back above 38.8475 (26th May high), then 39.4825 (11th May high), in order to revive a promising recovery into 40.0000 (old
OVER

30 YEAR BASE

BULL MARKET FROM 1999

psychological level).

Silver Monthly (since 1980) Spot Silver monthly, daily and Gold/Silver ratio chart, Bloomberg Finance LP
www.migbank.com

S-T TREND

L-T TREND

STRATEGY SHORT 3 at 34.4250, Obj: 32.3125/26.9600/23.3000, Stop: 36.7750 13

LEGAL TERMS

DAILY TECHNICAL REPORT

5 July, 2011

DISCLAIMER

No information published constitutes a solicitation or offer, or recommendation, 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
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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
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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.

No information published constitutes a solicitation or offer, or recommendation, 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

www.migbank.com

14

CONTACT

DAILY TECHNICAL REPORT

5 July, 2011

Howard Friend www.migbank.com Chief Market Strategist [email protected]

Ron William Technical Strategist [email protected]

Bjioy Kar Technical Strategist [email protected]

MIG BANK [email protected] www.migbank.com

14, rte des Gouttes dOr CH-2008 Neuchtel Tel.+41 32 722 81 00 15