DAILY TECHNICAL REPORT

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1 Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer. MA S-TERM MULTI-DAY L-TERM MULTI-WEEK STRATEGY/ POSITION ENTRY LEVEL OBJECTIVES/COMMENTS EUR/USD Exited at Breakeven. Awaiting New Sell Trade. STOP GBP/USD Await fresh signal. USD/JPY Await New Buy Trade Setup above USD/CHF Await fresh signal. Ron William, CMT, MSTA USD/CAD Awaiting New Buy Trade Setup. AUD/USD Awaiting New Sell Trade Setup. GBP/JPY Await fresh signal. EUR/JPY Await fresh signal. Bijoy Kar, CFA EUR/GBP Look to sell higher. EUR/CHF Sell stop /1.1526/ GOLD Exited at Awaiting New Sell trade Setup. WINNER BEST SPECIALIST RESEARCH DISCLAIMER & DISCLOSURES Please read the disclaimer and the disclosures which can be found at the end of this report SILVER SHORT / / (Entered 01/11/2011) 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 14, rte des Gouttes d Or CH-2008 Neuchâtel Switzerland Tel Fax info@migbank.com

2 EUR/USD EUR/USD EUR/USD (Daily) BERMUDA TRIANGLE FAILED BREAKOUTS Sharp recovery following positive news. Exited at 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 BREAKOUT ZONE (1.4000) investors around the world and has encouraged traditional risk appetite markets, such as EUR/USD, AUD/USD and S&P500 to turn back higher. 200-DMA (1.4092) (PSYCHOLOGICAL) (2011 MAJOR LOW) Expect the recovery to be limited into , then and perhaps even Probability still favours a bearish reversal at these levels. EUR/USD daily chart, Bloomberg Finance LP 200-DMA (75.76) USD INDEX UPTREND (2 YEARS) EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6% 9 MONTH HIGH USD INDEX (4 YEARS) +27% +19% +10% SO FAR Meantime, support can be found at and A sustained close beneath (Oct swing low) will re-establish the larger downtrend from April and target (psychological level), then (2011 major low). 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 USD s major bull-run from its historic oversold extremes (momentum, sentiment and liquidity). BREAKOUT ZONE DEMARK BUY SIGNAL Special Report: EUR/USD A Fall From Grace? Decline Targets / VIDEO MIG Bank Webinar: Why the US dollar is likely to gain up to 30% in 6-12 months. US Dollar Interview on Bloomberg DEMARK BUY SIGNALS 13 9 KEY SUPPORT ( ) + - COT LIQUIDITY TRIGGER (15000) EXTREME NET US $ SHORT POSITIONS USD Index daily, weekly chart and COT Liquidity, Bloomberg Finance LP Exited at Breakeven. Ron William, Technical Strategist, r.william@migbank.com, Phone:

3 GBP/USD Break over strengthens outlook further. GBP/USD appears to have found a short-term base at for the time being. Despite the reduction in the rate payable on USD based swap lines yesterday, it is anticipated that the core problems that existed before the reduction will resurface over coming days and weeks. Thus, Sterling has the capacity to be deemed as a safe haven in the event that Euro-Zone contagion returns. 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. GBP/USD daily chart, Bloomberg Finance LP Also, yesterday s failure to remain below warns of a more substantial corrective phase higher. In fact, a push back over will imply that the rise from is no longer corrective but likely part of a fresh swing to the upside. Given the reasoning above, EUR/GBP, can positively impact on GBP/USD, if a break under can be achieved in EUR/USD. We await the formation of short-term structure to assist us in our formulation of strategy. GBP/USD hourly chart, Bloomberg Finance LP Await fresh signal. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

4 USD/JPY USD/JPY POST INTERVENTION RETRACEMENT (PIR I) Minor rebound capped at (DeMark Level). USD/JPY s minor rebound is still being capped at (DeMark Level). Moreover, downside risks remain, with the growing probability of a third QUAKE SHOCK! price retracement back to pre-intervention levels (PIR III) and potentially even a new post world war record low beneath (PINL). POST G7 MOVE (I) HIGH 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. POST BOJ MOVE (II) HIGH This may inspire a temporary, but dramatic, price spike through psychological levels at and perhaps even sub 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. USD/JPY Weekly ENDING ( ) DIAGONAL PATTERN ANTICIPATE SBREAKOUT (85-79) PIR II POST BOJ MOVE (III) HIGH PIR III 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 and 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/JPY s Long-Term Structural Change Media Reports: CNBC Bloomberg MONTHLY DEMARK BUY SIGNAL DEMARK BUY SIGNAL AHEAD OF NEW POST WWII LOW (75.35) USD/JPY daily, weekly chart, Bloomberg Finance LP Awaiting Renewed Buy Trade Setup. Ron William, Technical Strategist, r.william@migbank.com, Phone:

5 USD/CHF Within the midst of a corrective phase. Sell limit at missed and hence removed. USD/CHF has broken the support of an hourly rising channel warning of an end to the rising phase seen since A further fall is anticipated towards in the near-term, with a break back over 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 yesterday s reduction in the interest rate offered on USD based swap lines. Spanish and Italian government bonds remain elevated, currently trading at 6.152% and 7.015% versus 6.478% and 7.355% yesterday. USD/CHF daily chart, Bloomberg Finance LP We continue to monitor the German sovereign yield curve with ten year yields there currently trading close to 2.252%, down from 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 region, which marks the lower end of the recent trading range. USD/CHF hourly chart, Bloomberg Finance LP Await fresh signal. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

6 USD/CAD USD/CAD (Daily) USD/CAD (Weekly) Sharp Setbacks hold steady. USD/CAD s sharp setbacks are holding steady today, following the recent short-term DeMark exhaustion sell signal. 200-DMA (0.9851) USD/CAD daily, weekly chart, Bloomberg Finance LP MAJOR RESISTANCE CHF/CAD (Daily) DEMARK BUY SIGNAL REVERSAL PATTERN CONFIRMATION ABOVE OPENS LARGER RECOVERY A directional confirmation above is still needed to unlock the recovery into plus. This would extend the upside breakout from the rate s ending triangle pattern, which was part of a major Elliott Wave cycle. Only a sustained close beneath and parity unlocks bearish setbacks into the long-term 200-day MA at and (31 st Aug low). 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 breakdown further into support levels at and CHF/CAD has also broken back beneath its 200-day MA at , while maintaining 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. 50% (1.3570) 200-DMA (1.3874) 61.8% (1.3379) 50% (1.1488) 61.8% (1.0893) EUR/CAD (Daily) EUR/CAD and CHF/CAD daily chart, Bloomberg Finance LP Awaiting New Buy Setup. Ron William, Technical Strategist, r.william@migbank.com, Phone:

7 AUD/USD AUD/USD (1 YEAR) AUD/USD daily, weekly chart, Bloomberg Finance LP AUD/NZD (Daily) 200-DMA (1.0405) DEMARK SELL SIGNALS KEY ZONE AUD/USD (Weekly) 38.2% (0.9144) 50% (0.8546) 61.8% (0.7947) AUD/JPY (Daily) STRUCTURAL LEVEL DEMARK SELL SIGNAL 3 YEAR UPTREND IS UNDER PRESSURE 13 Extended recovery beneath 200-day MA. AUD/USD has extended its recovery into key resistance at (61.8% Fib-Oct 28 th decline) and 200-day MA which is currently holding at The bears must sustain below to further compound downside pressure on the rate s multi-year uptrend and push back towards Elsewhere, the Aussie dollar remains strong against the New Zealand dollar. However, near-term price activity is mean reverting back into the 200- day MA. Expect a sharp setback to ensue over the multi-day horizon. The Aussie dollar has triggered a mild recovery against the Japanese yen and is now trading back above the neck-line of its two-year distribution pattern. Watch for further downside scope into support at which would signal further unwinding of risk appetite. REVERSING INTO 200-DMA 38.2% (76.70) 50% (72.58) 61.8% (68.47) 200- DMA (82.58) RESUMPTION OF BREAKDOWN ADDS TO RISK AVERSION KEY SUPPORT / AUD/NZD and AUD/JPY daily chart, Bloomberg Finance LP Awaiting New Sell Trade Setup. Ron William, Technical Strategist, r.william@migbank.com, Phone:

8 GBP/JPY Initial signs of exhaustion emerge. Missed buy. Buy strategy is now removed. GBP/JPY failed to correct lower after reaching This suggests that the corrective phase from 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 region materialise. We are also biased by the formation of a rising wedge in the hourly timeframe, which is potentially forming a false break higher, again a negative for the near-term outlook. GBP/JPY daily chart, Bloomberg Finance LP A failure to hold over will warn of a return to Over a longer period of time a substantial recovery higher is favoured, initially towards GBP/JPY hourly chart, Bloomberg Finance LP Buy strategy removed. Await fresh signal. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

9 EUR/JPY 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 We also view the fall that has taken place since 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 in EUR/USD will end the rising phase seen since This would likely be associated with a fall back down to and potentially lower. EUR/JPY daily chart, Bloomberg Finance LP Given the above clash between the structure and the deterioration in the Euro-Zone, we prefer to wait on the sidelines. A sustained hold over the 200 day moving average will turn the mediumterm outlook more bullish. EUR/JPY hourly chart, Bloomberg Finance LP Await fresh signal. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

10 EUR/GBP Failed momentum warns of a larger corrective phase higher. Yesterday s strategy to sell at was negated with the push back under The bias remains negative. EUR/GBP failed to gain momentum again, this time in the hourly timeframe, after breaking under This now warns of a larger rise higher, back towards the region. As has already been seen following the recent push under /31, this failure to garner momentum is a hallmark of this currency pair in recent trade. Thus the strategy remains to sell, but at higher levels. EUR/GBP daily chart, Bloomberg Finance LP 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 with yesterday s 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 level in EUR/USD. A push under this level will mark a clear breakdown of confidence in the EUR, which would then likely have a knock on effect on all EUR crosses. EUR/GBP hourly chart, Bloomberg Finance LP Look to sell higher. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

11 EUR/CHF A re-test of the /31 region anticipated. EUR/CHF continues to trade in a tight range failing to meet the 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 region. Should a re-test of the region take place with a fall under also following, this would warn of the end of the recovery seen since , increasing the probability of a return to this level. EUR/CHF weekly chart, Bloomberg Finance LP Near-term, a break back under will warn of a failure to re-test the region, suggesting an earlier return to /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 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. EUR/CHF hourly chart, Bloomberg Finance LP S-T TREND L-T TREND Sell stop 3 at , Objs: /1.1526/1.1002, Stop: Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

12 GOLD GOLD KEY TRIGGER LEVELS DOWNSIDE: $1600 / $1530 UPSIDE: $1760 /$1844 DEMARK SIGNAL WARNED OF GOLD S OVERBOUGHT CONDITIONS BREAKOUT $1760 $1704 $1600 $1532 DOUBLE TOP CONFIRMATION BELOW $1530 UNLOCKS LARGER DECLINE INTO $1300 & $ TREND CHANNEL (12 YEARS) 200-DMA NOT BROKEN IN 3 YEARS! 26% COT NET LONG SPECULATOR POSITIONS RISK ZONE III 34% 20% SO FAR Bulls need to close above $1800. Exited short position at $1740. Short-term price activity remains negative beneath resistance at $1800, despite the recent push higher. A close above here would help the bulls 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 $ 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 Gold s mountainous peak at risk beneath $1600 VIDEO Bloomberg Countdown CNBC Squawk Box MIG Bank Gold Webinar video (BLOOMBERG & CNBC REPORTS) I 25% II OVER 2 YEARS OF SIZEABLE LONG GOLD POSITIONS UNDER THREAT IF KEY LEVEL BREAKS Gold weekly, daily chart and COT Liquidity, Bloomberg Finance LP Exited at $1740. Awaiting New Sell Trade Setup. Ron William, Technical Strategist, r.william@migbank.com, Phone:

13 SILVER Silver HITS 1980 Spike High! Silver (Daily) DEMARK SELL SIGNALS DEMARK SELL 13 I Key support at $ Lowered stop to , breakeven, thereby ensuring a risk-free trade. Silver is holding around key support at Only a sustained close below here would trigger a test of the previous swing low at Macro price structure continues to focus on the downside risks, following the 200 DMA ( ) II major sell-off in September. Such a dramatic move traditionally produces volatile trading ranges. This allows the market to have enough time to KEY SUPPORT ( ) 38.2% ( ) recover and accumulate renewed buying interest. Expect a large trading range to hold between $ over the multi-week/month horizon, with downside macro risk into $ (61.8% Gold/Silver "Mint" Ratio 50% ( ) Fib-1999 bull market) and $ This would still maintain silver s longterm uptrend and help offer a potential buying opportunity for the eventual resumption higher. 61.8% ( ) Continue to watch the gold-silver mint ratio which has now accelerated higher by 70%, suggesting further risk aversion over the next few weeks. 13 YEAR LEVEL This also helps explain recent divergences between gold and silver. UNWINDING 70% FROM OVERSOLD TERRITORY Silver Monthly (since 1980) OVER 30 YEAR BASE PATTERN BULL MARKET FROM 1999 Spot Silver daily, weekly chart and Gold/Silver mint ratio, Bloomberg Finance LP SHORT 3: , Obj: / / , Stop: Ron William, Technical Strategist, r.william@migbank.com, Phone:

14 LEGAL TERMS DISCLAIMER 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 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. 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, ed, 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. 14

15 CONTACT Howard Friend Chief Market Strategist Ron William Technical Strategist Bjioy Kar Technical Strategist MIG BANK 14, rte des Gouttes d Or CH-2008 Neuchâtel Tel