DAILY TECHNICAL REPORT

10 January, 2012
Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

MA
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 1.2680

OBJECTIVES/COMMENTS

STOP

1.2530/1.2150/1.1877 Await fresh signal. Await New Buy Trade Setup above 80.00. Sell strategy removed. Await fresh signal. Awaiting New Buy Trade Setup above 1.0425.

1. 2850

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

Sell Stop 3

1.0145

1.0040/0.9860/0.9660 Long exited at 118.90. Await fresh signal.

1.0270

Sell limit 3 SHORT 3 Sell Stop 3 SHORT 2

0.8300 1.2130 1590 34.1300

0.8222/0.8142/0.8068 1.2010/1.1526/1.1002 1520/1460/1300 26.0700/23.3400 (Entered 01/11/2011)

0.8378 1.2250 1640 30.0000

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 info@migbank.com Switzerland www.migbank.com

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

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

EUR/USD EUR/USD

DAILY TECHNICAL REPORT

10 January, 2012

EUR/USD (Daily)

BERMUDA TRIANGLE REVERSAL FROM 2 YEAR UPTREND

Temporary bullish unwinding targets 1.2870.

EUR/USD is temporarily unwinding from oversold conditions, having recently broken under the major 2011 low and reaching a fresh low for the new-year at 1.2666.

BREAKOUT ZONE

(1.4000)

BEARISH CHANNEL

The major trend remains bearish, holding within a declining channel range. While price activity holds here, we prefer to sell into forthcoming rallies, which

200-DMA (1.3957)

are likely to be driven by temporary short covering.

HISTORY REPEATS

R1 (1.3077) 1.26-1.2530 TARGET

Watch for near-term resistance to come in at 1.2820/70, then 1.2920 and 1.3000/77 (psychological/04th Jan bearish candle pattern high). Only a sustained break above here will offer a stronger recovery into 1.3197 (see chart insert).

BEARISH 3 CROW CANDLE PATTERN

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 (confluence target).

EUR/USD daily chart, Bloomberg Finance LP

MAJOR HIGHS

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

12 MONTH HIGH

Inversely, the USD Index has triggered a bearish dark cloud signal having carved out a 12-month high (see chart).

KEY SUPPORT

The move coincided with old resistance at 81.31/44 (Nov 2010/Jan 2011 peaks) and is likely to trigger further unwinding from overbought conditions into 80.00/79.50 (psychological/pivot level). Expect this level to help re-launch the greenbacks recovery (which was already up 10%), which is part of our bullish

(79.50)

BREAKOUT ZONE

cycle strategy over the multi-month horizon.

200-DMA (76.26)

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

10 January, 2012

Hourly range remains intact for now.

GBP/USD is dominated by the recent failure to break out of a tight rangebound hourly structure between 1.5780 and 1.5362. Although we perceive Sterling as a relative safe haven and also view the large devaluation of 2008 as being sufficient, there is still scope for a minor downside bias to emerge, back towards the long-term trend-line support, currently near 1.5150. With this in mind we could trade the short-term range or await a fall to long-term trend-line support. Given the general US Dollar positive

environment, it is deemed better to wait for higher levels to attempt possible short exposure. GBP/USD daily chart, Bloomberg Finance LP Also, given the negative bias in EUR/GBP, it is anticipated that any weakness in GBP/USD will be less dynamic than US Dollar strength seen elsewhere.

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 3

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

DAILY TECHNICAL REPORT

10 January, 2012

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).

QUAKE SHOCK!
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) HIGH

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)

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.

USD/JPY (120 MIN)

DEMARK SELL SIGNAL

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
KEY PIVOT LEVEL (77.25) TRIGGERS POST INTERVENTION RETRACEMENT

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

10 January, 2012

Return towards the 200 DMA favoured medium-term.

0.9500, our proposed first target has been met, thus we have removed our prior sell recommendation at 0.9610. USD/CHF has tested close to the 0.9600 region where it was anticipated a degree of supply may manifest. In any case the daily structure present since 0.8568 suggests that the rising phase seen since 0.7071 is reaching completion. In the absence of the SNB, it is anticipated that a return to the 200 day moving average, currently at 0.8708 would be possible, ahead of a further phase higher. USD/CHF daily chart, Bloomberg Finance LP However, USD/CHF continues to be a tied to the fate of EUR/CHF and thus the ability of the SNB to successfully maintain its floor in EUR/CHF at 1.2000. Fresh highs are still anticipated in 10 year Italian sovereign yields, maintaining downside pressure on USD/CHF. 10 year yields in Spain and Italy are currently trading at 5.563% and 7.140% versus 6.478% and 7.355%, before the US Dollar based swap agreement. These same yields were trading at 5.665% and 7.110% respectively yesterday.

USD/CHF hourly chart, Bloomberg Finance LP

S-T TREND

L-T TREND

STRATEGY
Sell strategy removed. 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

10 January, 2012

USD/CAD (Daily)

Weakening from pattern ceiling.

USD/CAD is weakening from its triangle pattern ceiling, which coincided with an intraday DeMark exhaustion signal and daily bearish evening star candle pattern (see hourly/daily charts).

CONFIRMATION ABOVE 1.0680 OPENS LARGER RECOVERY DEMARK BUY SIGNAL

However, the chart structure remains positive and so we prefer to wait for a strong directional confirmation above 1.0425 before initiating a buy trade setup.

200-DMA (0.9918)

Until then, intraday traders might find a fast 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-month triangle pattern.

USD/CAD daily chart, Bloomberg Finance LP

USD/CAD (120 MIN)
DEMARK SELL SIGNAL

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).

DEMARK SELL SIGNALS

EUR/CAD, which tends to share a positive correlation with EUR/USD, is temporarily unwinding from oversold conditions. However, the previous structural breach under the rates multi-month distribution pattern continues to

KEY SUPPORT (1.0080)

BEARISH (DAILY) EVENING STAR PATTERN

favour further downside pressure into 1.2760 (10 th Jan 2010).

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

10 January, 2012

Capped under 200-day average (1.0405).

DEMARK SELL SIGNALS

AUD/USD remains capped under its 200-day moving average which has been holding steady around 1.0405 for over 3 months.

200-DMA (1.0405) AUD/USD (WEEKLY)

31.82%

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

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

(0.9172)
50%

(0.8609)
61.8%

(0.8046)

3 YEAR UPTREND UNDER THREAT BELOW 0.9620

KEY ZONE (1.0000)

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).

Elsewhere, the Aussie dollar has weakened sharply against its neighboring New Zealand counterpart. Near-term price activity is breaking from a multi-month trading range and is testing its 200-day MA which is currently trading at 1.2970.

AUD/USD daily chart, Bloomberg Finance LP

AUD/USD (120 MIN)
DEMARK SELL SIGNAL

Expect further setbacks over the multi-day/week horizon into support at 1.2834 and 1.2319. The Aussie dollar remains steady against the Japanese yen, while still holding within its neutral contracting trading range. Watch for key support at 76.98 to

PIVOT LEVEL (1.0220)

unlock further downside into 74.81.

RANGE BREAKOUT

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
Towards 116.84 now favoured.

DAILY TECHNICAL REPORT

10 January, 2012

GBP/JPY saw a clear break under the 119.00 low on Friday ending hopes of a continuation of the recovery structure from this same level.

This failure to hold over 119.00 now suggests a re-test of the region close to 116.84. Strong support is anticipated close to this level, should weakness persist.

In a similar manner to EUR/JPY, there are initial signs of exhaustion evident in the hourly timeframe. However, as mentioned above, 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 higher. GBP/JPY daily chart, Bloomberg Finance LP 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
Long exited at 118.90. 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

10 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. Given that movement in EURJPY is largely driven by movement in EUR/USD, there is still scope for a re-test of the region near the all-time low at 88.97. However, a break over the resistance of the falling wedge is required, currently at 99.80, before a more lasting recovery may take place. 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. 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%. EUR/JPY daily chart, Bloomberg Finance LP Our medium-term outlook is driven by the theory, that in the absence of further stresses out of the core Euro-Zone, it would be expected that a degree of support would be found close to current levels for a longerterm 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

10 January, 2012

Pullback sought to enter short positions.

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 we continue to seek a return

towards 0.8068 and potentially lower. The break under long-term support from 0.8068 has also seen this pair trading in a manner that is consistent with a trending market, featuring impulsive moves more frequently 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 crosses too. EUR/GBP daily chart, Bloomberg Finance LP 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 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

10 January, 2012

Further weakness anticipated following push under 1.2130.

EUR/CHF saw a test under the key low at 1.2131 yesterday. Hourly structure continues to suggest further weakness ahead, with scope for a re-test of 1.2000 and then potentially 1.1800 thereafter. 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. However, holding back the

remainder of the FX market may be a step too far for the SNB. We maintain our bearish bias, given the price action in the weekly timeframe, where a failure to break over the 50 week moving average leads us to conclude that the larger down-trend is not yet complete. EUR/CHF daily and weekly charts, Bloomberg Finance LP Elevated yields in the Italian sovereign market are still being closely monitored, with an expectation of a test of the 7.500% region in the 10 year maturity. Given the longer-term structure, it is doubtful that 7.500% will cap this 10 year rate. In an environment where 10 year Italian yields are trading at, or near, 7.000% it is likely that the Swiss Franc will see a degree of demand despite the low deposit rates available.

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

10 January, 2012

DOUBLE TOP

200-day average continues to maintain pressure.

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

$1800 $1760
TREND CHANNEL
(12 YEARS)

in 3 years. The 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 trading at

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

$1634. 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 even $1040-1000 (12-year channelfloor/see top chart insert).

GOLD KEY LEVELS

DOWNSIDE: $1600 / $1530 / $1300 - UPSIDE: $1634 / $1760 / $1800

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.

Gold daily and weekly charts, Bloomberg Finance LP

GOLD (120 MIN)
SHARP DECLINE

INDECISION HIGHLIGHTED BY SMALL RANGES AMIDST 200-DAY MA

This will trigger a temporary, but dramatic setback that would ultimately offer a unique buying opportunity into this coming summer of 2012.

Please select links for in-depth Gold coverage: Special Report Golds mountainous peak at riskbeneath $1600 Media Interviews: Bloomberg Countdown
DEMARK SELL SIGNAL

VIDEO Webinar
Reports: (BLOOMBERG & CNBC)

CNBC Squawk Box

WEAK RECOVERY

S-T TREND

L-T TREND

STRATEGY
Sell Stop 3: 1590, Objs: 1520/1460/1300, Stop: 1640

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

10 January, 2012

Holding beneath the $30.0000 level.

Silvers weak recovery from oversold conditions is holding beneath key psychological resistance at $30.0000 (see intraday chart below).

13 YEAR LEVEL UNWINDING 70% FROM OVERSOLD TERRITORY

200 DMA (36.1263)

Near-term support at 28.6000 acts as our downside trigger level that would help unlock a resumption lower into 26.1600 (29th Dec-hammer 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

KEY SUPPORT (26.0700)

accumulate renewed buying interest. Expect a large trading range to hold between $37.0000 - 26.0700 over the multiweek/month horizon, with downside macro risk into $21.5165 (61.8% Fib-1999 bull market) and $20.0000. This would still maintain silvers long-term uptrend

Spot Silver daily chart, Bloomberg Finance LP

SILVER (120 MIN)
R1 (30.0000)

and help offer a potential buying opportunity for 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
S1 (28.6000)

few weeks. This also helps explain recent divergences between gold and silver.

BULLISH DAILY HAMMER PATTERN (26.1600)

PSYCHOLOGICAL (30.0000)

WEAK RECOVERY

S-T TREND

L-T TREND

STRATEGY
SHORT 2: 34.1300, Objs: 26.0700/23.3400, Stop: 30.0000

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

10 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.

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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
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.

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.

www.migbank.com

14

CONTACT

DAILY TECHNICAL REPORT

10 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

15