DAILY TECHNICAL REPORT

2 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 RK ET
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

SHORT 3 34.1300 Sell limit 3 Sell stop 3 0.8700 1.2130 Sell limit 3 123.00

Exited at 1.3480. Breakeven. Awaiting new sell trade. Await fresh signal. Await new buy trade setup above 80.00. Await fresh signal. Awaiting new buy trade setup. Awaiting new sell trade setup. 122.00/121.00/120.00 Await fresh signal. 0.8565/0.8485/0.8285 1.2030/1.1526/1.1002 Exited at 1740. Awaiting new sell trade setup. 29.9700/26.0700/23.3400 (Entered 01/11/2011) 34.1300 0.8835 1.2230 124.00

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 Switzerland info@migbank.com www.migbank.com

MIG BANK / Forex Broker14, rte des Gouttes dOr Tel +41 32 722 81 00 Fax +41 32 722 81 01

EUR/USD EUR/USD

DAILY TECHNICAL REPORT

2 December, 2011

Sharp recovery following positive news.

Exited at 1.3480. Breakeven/Awaiting a New Sell Trade Setup. EUR/USD extended sharply higher, as six central banks, reduced their USD funding costs to ease the debt crisis. The impact was very positive for investors around the world and has encouraged traditional risk appetite markets, such as EUR/USD, AUD/USD and S&P500 to turn back higher. Expect the recovery to be limited into 1.3610, then 1.3730 and perhaps even 1.3850-90. Probability still favours a bearish reversal at these levels. Meantime, support can be found at 1.3380 and 1.3146. A sustained close beneath 1.3146 (Oct swing low) will re-establish the larger downtrend from April and target 1.3000 (psychological level), then 1.2870 (2011 major low). EUR/USD weekly chart, Bloomberg Finance LP Inversely, the USD Index is maintaining its recovery higher and still targets its recent 9-month highs near 80, (a move worth almost 10%). Speculative (net long) liquidity flows have unwound from recent spike highs (3 standard deviations from the yearly average). This will likely remain strong and 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

S-T TREND

L-T TREND

STRATEGY
Exited at 1.3480. Breakeven.

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 20

GBP/USD

DAILY TECHNICAL REPORT

2 December, 2011

Triangular consolidation forms in the hourly timeframe.

GBP/USD appears to have found a short-term base at 1.5423 for the time being. However, hourly structure has now formed a triangular consolidation pattern, from which a breakout needs to be realised. A return to stresses in the Euro-Zone driving sovereign yields higher is anticipated and thus Sterling has the capacity to be deemed as a safe haven. It is this reasoning that leads us to continue to favour a return to the large range in GBP/USD, that has been witnessed for the majority of the year. Also, the recent failure to remain below 1.5700 warns of a more substantial corrective phase higher. In fact, a push back over 1.5877 will imply that the rise from 1.5423 is no longer corrective but likely part of a fresh swing to the upside. GBP/USD daily chart, Bloomberg Finance LP We await the formation of short-term structure to assist us in our formulation of strategy.

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 20

USD/JPY

DAILY TECHNICAL REPORT

2 December, 2011

Minor rebound capped at 78.24 (DeMark Level).

USD/JPYs minor rebound is still being capped at 78.24 (DeMark Level). Moreover, downside risks remain, with the growing probability of a third price retracement back to pre-intervention levels (PIR III) and potentially even a new post world war record low beneath 75.35 (PINL). 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. This may 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 into November-December this year, 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 Webinar: USD/JPYs Long-Term Structural Change

USD/JPY daily, weekly chart, Bloomberg Finance LP

Media Reports: CNBC

Bloomberg

S-T TREND

L-T TREND

STRATEGY
Awaiting Renewed Buy Trade Setup.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426 20

USD/CHF

DAILY TECHNICAL REPORT

2 December, 2011

Further weakness possible towards 0.9000.

USD/CHF has broken the support of an hourly rising channel, warning of an end to the rising phase seen since 0.8568. A further fall is anticipated

towards 0.9000 in the near-term, with a break back over 0.9252 required to dampen the short-term bearish bias. We are wary of selling at current levels as downside pressure from rising Euro-Zone yields has eased somewhat following the reduction in the interest rate offered on USD based swap lines. Spanish and Italian government bonds remain elevated, currently trading at 5.647% and 6.488% versus 6.478% and 7.355% before the six party central bank agreement. We continue to monitor the German sovereign yield curve with ten year USD/CHF daily chart, Bloomberg Finance LP yields there currently trading close to 2.252%, down from 2.302% yesterday. Assuming German yields are also not pressured to the upside, this should also act to ease downside pressure in USD/CHF. Movement in USD/CHF is likely to be affected by EUR/CHF should the latter rate get closer to the 1.2130 region, which marks the lower end of the recent trading range.

USD/CHF 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 20

USD/CAD
Sharp Setbacks hold steady.

DAILY TECHNICAL REPORT

2 December, 2011

USD/CADs sharp setbacks are holding steady today, following the recent short-term DeMark exhaustion sell signal. A directional confirmation above 1.0658 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. Only a sustained close beneath 1.0120 and parity unlocks bearish setbacks EUR/CAD remains beneath its 200-day MA, still within a large multi-month trading range. The strong multi-month distribution pattern is likely to USD/CAD daily, weekly chart, Bloomberg Finance LP breakdown further into support levels at 1.3570 and 1.3380. CHF/CAD has also broken back beneath its 200-day MA at 1.1375, while also breaching a multi-week trading range. This follows the dramatic price slide lower (which was triggered by the SNB intervention). The cross-rate has retraced more than half of its 2011 gains.

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

S-T TREND L-T TREND STRATEGY
Awaiting New Buy Setup.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 20

AUD/USD

DAILY TECHNICAL REPORT

2 December, 2011

Extended recovery beneath 200-day MA.

AUD/USD has extended its recovery into key resistance at 1.0340 (61.8% Fib-Oct 28 decline) and 200-day MA which is currently holding at 1.0412. 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 dollar remains strong against the New Zealand dollar. However, near-term price activity is mean reverting back into the 200day MA. Expect a sharp setback to ensue over the multi-day horizon. The Aussie dollar has triggered a mild recovery against the Japanese yen pattern. Watch for further downside scope into support at 72.00 which would AUD/USD daily, weekly chart, Bloomberg Finance LP signal further unwinding of risk appetite.
th

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

S-T TREND

L-T TREND

STRATEGY
Awaiting New Sell Trade Setup.

www.migbank.com

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 20

GBP/JPY
Initial signs of exhaustion emerge.

DAILY TECHNICAL REPORT

2 December, 2011

GBP/JPY appears to be losing upside momentum forming a rising wedge of sorts. This suggests that the corrective phase from 119.38 may be over and thus we have removed our strategy. The bias now returns to negative again, with scope for a degree of support to manifest, should a fall to the 120.00 region materialise. We are also biased by the formation of a rising wedge in the hourly timeframe, which has the potential to eventually break higher completing the pattern. A failure to hold over 119.38 will warn of a return to 116.84. Over a longer period of time a substantial recovery higher is favoured, initially towards 163.09. GBP/JPY daily chart, Bloomberg Finance LP

GBP/JPY hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 123.00, Objs: 122.00/121.00/120.00, Stop: 124.00

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 20

EUR/JPY

DAILY TECHNICAL REPORT

2 December, 2011

Potentially in the final phases of a correction higher.

EUR/JPY appears to be in the final phases of a correction higher from the recent low at 102.49. We also view the fall that has taken place since 111.60 as being corrective in nature, suggesting potential for a return to this same level. However, the EUR component of this pair is highly affected by the movement in EUR/USD. A break under 1.3146 in EUR/USD will end the rising phase seen since 2010. This would likely be associated with a fall back down to 100.76 and potentially lower. Given the above clash between the structure and events in the Euro-Zone, we prefer to wait on the side lines. EUR/JPY daily chart, Bloomberg Finance LP A sustained hold over the 200 day moving average will turn the mediumterm outlook more bullish.

S-T TREND

L-T TREND

STRATEGY
Await fresh signal.

EUR/JPY hourly chart, Bloomberg Finance LP

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 20

EUR/GBP

DAILY TECHNICAL REPORT

2 December, 2011

Failed momentum warns of a larger corrective phase higher.

EUR/GBP failed to gain momentum again, this time in the hourly timeframe, after breaking under 0.8528. This now warns of a larger rise higher, back towards the 0.8700 region. As has already been seen following the recent push under 0.8530/31, this failure to garner momentum is a hallmark of this currency pair in recent trade. higher levels. Given the precarious situation in the Euro-Zone, it is anticipated that if yield curve deterioration continues then Sterling could be viewed as a safe haven. Italian and Spanish government bond yields have eased back somewhat after the coordinated cut in USD based swap lines amongst selected central banks yesterday. However, a lasting solution still appears a long way off EUR/GBP daily chart, Bloomberg Finance LP with yesterdays intervention simply easing a dire situation. Our bias remains mildly bearish with trade continuing under both the 200 day and 50 week moving averages. We keep an eye on the 1.3146 level in EUR/USD. A push under this level will mark a clear breakdown of Thus the strategy remains to sell, but at

confidence in the EUR, which would then likely have a knock on effect on all EUR crosses.

S-T TREND

L-T TREND

STRATEGY
Sell limit 3 at 0.8700, Objs: 0.8565/0.8485/0.8285, Stop: 0.8835

EUR/GBP hourly chart, Bloomberg Finance LP

www.migbank.com

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 20

EUR/CHF
A re-test of the 1.2123/31 favoured.

DAILY TECHNICAL REPORT

2 December, 2011

EUR/CHF continues to trade in a tight range failing to meet the 1.2500 level. Downside pressure is favoured to resume as yields on Italian and Spanish sovereign debt remain elevated. Over time, this may lead to a renewed desire for a safe haven, with downside pressure returning to EUR/CHF. Our strategy is to trade opportunistically from a momentum perspective, awaiting a return to the 1.2000 region. Should a re-test of the 1.2000 region take place with a fall under 1.1973 also following, this would warn of the end of the recovery seen since 1.0075, increasing the probability of a return to this level. Near-term, a break back under 1.2226 will warn of a failure to re-test the EUR/CHF weekly chart, Bloomberg Finance LP 1.2500 region, suggesting an earlier return to 1.2123/31. In any case, a retest of the base of the recent trading range is anticipated over coming sessions. The failure of this pair to break over the 50 week moving average over recent weeks is also an initial warning that the prior downtrend may not be over. The large cluster of stops that is likely to be placed around the 1.2000 level is also anticipated to aid any short positioning, questioning the ability of the SNB to hold back the possible flow of funds into Swiss Francs.

S-T TREND

L-T TREND

EUR/CHF hourly chart, Bloomberg Finance LP

www.migbank.com

Sell stop 3 at 1.2130, Objs: 1.2030/1.1526/1.1002, Stop: 1.2230.

Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424 20

GOLD
Remains negative beneath $1800.

DAILY TECHNICAL REPORT

2 December, 2011

Exited short position at $1740. Short-term price activity remains negative beneath resistance at $1800, despite the recent push higher. Only a close above here would develop a more sustained recovery into $1845. Meanwhile, there is still heightened risk for a much larger decline if we confirm a weekly close beneath $1600/04 and $1530 (200-day MA/swing low), which has not been breached in 3 years! 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. 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 in the near future.

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 weekly, daily chart and COT Liquidity, Bloomberg Finance LP

S-T TREND
www.migbank.com

L-T TREND

STRATEGY
Exited at $1740. Awaiting New Sell Trade Setup.

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 20

SILVER
Key support at $30.0000.

DAILY TECHNICAL REPORT

2 December, 2011

Lowered stop to 34.1300, breakeven, thereby ensuring a risk-free trade. Silver is holding around 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 silvers longterm uptrend and help offer a potential buying opportunity for the eventual resumption higher. Continue to watch the gold-silver mint ratio 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 daily, weekly chart and Gold/Silver mint ratio, Bloomberg Finance LP
S-T TREND
www.migbank.com

L-T TREND

STRATEGY
SHORT 3: 34.1300, Obj: 29.9700/26.0700/23.3400, Stop: 34.1300

Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454 20

LEGAL TERMS

DAILY TECHNICAL REPORT

2 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.

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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.

www.migbank.com

20

CONTACT

DAILY TECHNICAL REPORT

2 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 20