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.

S-TERM L-TERM STRATEGY/ ENTRY OBJECTIVES/COMMENTS STOP

MA MULTI-DAY MULTI-WEEK POSITION LEVEL

EUR/USD  
RK
GBP/USD  
Await fresh signal.

Await fresh signal.

ET
USD/JPY   Await new buy trade setup above 80.00.

USD/CHF   Looking to sell.

Ron William, CMT, MSTA 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

Bijoy Kar, CFA
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

WINNER BEST SPECIALIST RESEARCH

DISCLAIMER &
DISCLOSURES
Please read the disclaimer and the
disclosures which can be found at 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
the end of this report 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 [email protected] www.migbank.com
 EUR/USD DAILY TECHNICAL REPORT
EUR/USD 22 December, 2011

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

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

www.migbank.com Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

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 DAILY TECHNICAL REPORT
GBP/USD 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
GBP/USD daily chart, Bloomberg Finance LP 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.

GBP/USD hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY
  Range bound trade likely to persist near-term.

www.migbank.com Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

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 DAILY TECHNICAL REPORT
USD/JPY 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
USD/JPY daily chart, Bloomberg Finance LP 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/JPY’s Long-Term Structural Change
Media Reports: CNBC / Squawk Box & Bloomberg

S-T TREND L-T TREND STRATEGY

USD/JPY hourly chart, Bloomberg Finance LP
  Awaiting Renewed Buy Trade Setup above 80.00.

www.migbank.com Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 426

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 DAILY TECHNICAL REPORT
USD/CHF 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.

USD/CHF daily chart, Bloomberg Finance LP • 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.

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

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 DAILY TECHNICAL REPORT
USD/CAD 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.
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 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

th
pattern. A sustained break beneath 1.3393-79 (19 Sept low/61.8% Fib),
signals an important breakdown into 1.3140 and would provide
substantial correlation pressure onto EUR/USD.

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: [email protected], Phone: +41 32 7228 454

6
 DAILY TECHNICAL REPORT
AUD/USD 22 December, 2011

Strong unwinding from oversold conditions.

 AUD/USD is unwinding strongly from oversold conditions, which also
coincided with an intraday DeMark™ buy 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
AUD/USD daily chart, Bloomberg Finance LP 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.

AUD/USD hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY

  Exited at 1.0050.

www.migbank.com Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

7
 DAILY TECHNICAL REPORT
GBP/JPY 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

GBP/JPY daily chart, Bloomberg Finance LP ahead of strategy formulation.

S-T TREND L-T TREND STRATEGY

GBP/JPY hourly chart, Bloomberg Finance LP
  Await fresh signal.

www.migbank.com Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

8
 DAILY TECHNICAL REPORT
EUR/JPY 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
EUR/JPY daily chart, Bloomberg Finance LP 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

EUR/JPY hourly chart, Bloomberg Finance LP
  Await fresh signal.

www.migbank.com Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

9
 DAILY TECHNICAL REPORT
EUR/GBP 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.

EUR/GBP daily chart, Bloomberg Finance LP • 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

EUR/GBP hourly chart, Bloomberg Finance LP
  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: [email protected], Phone: +41 32 7228 424

10
 DAILY TECHNICAL REPORT
EUR/CHF 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
EUR/CHF daily and weekly charts, Bloomberg Finance LP
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

EUR/CHF hourly chart, Bloomberg Finance LP
  Sell stop 3 at 1.2130, Objs: 1.2030/1.1526/1.1002, Stop: 1.2230.

www.migbank.com Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

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 DAILY TECHNICAL REPORT
GOLD 22 December, 2011

Gold re-testing its 200-day average.

 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 channel–floor/see
top chart insert).
Gold daily and weekly charts, Bloomberg Finance LP
 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 “Gold’s mountainous peak at risk…beneath $1600” VIDEO
Bloomberg Countdown CNBC Squawk Box MIG Bank Gold Webinar video
(BLOOMBERG & CNBC REPORTS)

Gold hourly chart, Bloomberg Finance LP S-T TREND L-T TREND STRATEGY

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

www.migbank.com Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

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 DAILY TECHNICAL REPORT
SILVER 22 December, 2011

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
Spot Silver daily chart, Bloomberg Finance LP
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: [email protected], Phone: +41 32 7228 454

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LEGAL DAILY TECHNICAL REPORT
TERMS 22 December, 2011

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including any direct, indirect or consequential damages.

Material Interests
No information published constitutes a solicitation or offer, or recommendation, or advice, to MIG BANK and/or its board of directors, executive management and employees may have or
buy or sell any investment instrument, to effect any transactions, or to conclude any legal act have had interests or positions on, relevant securities.
of any kind whatsoever.

The information published and opinions expressed are provided by MIG BANK for personal
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use and for informational purposes only and are subject to change without notice. MIG BANK All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or
makes no representations (either expressed or implied) that the information and opinions distributed without the express permission of MIG BANK.
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 Notes: Entries are in 3 units and objectives are at 3 separate levels where 1
made solely based on the content. You should obtain advice from a qualified expert before unit will be exited. When the first objective (PT 1) has been hit the stop will be
making any investment decision. moved to the entry point for a near risk-free trade. When the second objective

All opinion is based upon sources that MIG BANK believes to be reliable but they have no (PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All
guarantees that this is the case. Therefore, whilst every effort is made to ensure that the orders are valid until the next report is published, or a trading strategy alert is
content is accurate and complete, MIG BANK makes no such claim. sent between reports.

www.migbank.com

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 DAILY TECHNICAL REPORT
CONTACT 22 December, 2011

Howard Friend Ron William MIG BANK 14, rte des Gouttes d’Or
www.migbank.com Bjioy Kar
Chief Market Strategist Technical Strategist [email protected] CH-2008 Neuchâtel
Technical Strategist
[email protected] www.migbank.com Tel.+41 32 722 81 00
[email protected] [email protected] 15