DAILY TECHNICAL REPORT MA S-TERM. 16 December, 2011 L-TERM MULTI-WEEK OBJECTIVES/COMMENTS ENTRY LEVEL STRATEGY/ POSITION

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1 MA S-TERM MULTI-DAY Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer. L-TERM MULTI-WEEK STRATEGY/ POSITION ENTRY LEVEL OBJECTIVES/COMMENTS EUR/USD SHORT (Entered 12/12/2011) STOP GBP/USD Await fresh signal. USD/JPY Awaiting New Buy Trade Setup Above USD/CHF Possible sell higher. Ron William, CMT, MSTA USD/CAD Awaiting New Buy Trade Setup. AUD/USD SHORT / (Entered 13/12/2011) GBP/JPY Await fresh signal. EUR/JPY Buy limit /105.00/ Bijoy Kar, CFA EUR/GBP Sell limit /0.8300/ EUR/CHF Sell Stop /1.1526/ GOLD SHORT /1300 (Entered 12/12/2011) 1705 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 Short-covering around the key level. EUR/USD is unwinding mildly from oversold conditions, driven by shortcovering as the market adjusts to a new bearish paradigm, following the break beneath that all-important psychological level at BREAKOUT ZONE (1.4000) Our cycle analysis successfully signalled increased volatility within the first two weeks of December across risk proxies, including the equity and (1.4060) (PSYCHOLOGICAL) (2011 MAJOR LOW) commodity markets. Expect some respite ahead of the holiday period. Watch for a sustained close beneath (psychological level) to resume EUR/USD s multi-month downtrend into (2011 major low). UPTREND (2 YEARS) EUR/USD daily chart, Bloomberg Finance LP USD INDEX EUR 57.6%, JPY 13.6%, GBP 11.9% CAD 9.1%, SEK 4.2%, CHF 3.6% BREAKOUT ZONE 11 MONTH HIGH Near-term resistance can be found at and potentially even (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 is 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 / VIDEO MIG Bank Webinar: Why the US dollar is likely to gain up to 30% in 6-12 months. US Dollar Interview on Bloomberg (75.88) BUY SIGNALS 13 9 KEY SUPPORT ( ) USD Index daily chart, Bloomberg Finance LP SHORT 1: , Objs: , Stop: Ron William, Technical Strategist, r.william@migbank.com, Phone:

3 GBP/USD Break over trend-line off sought before attempting longs. GBP/USD has managed to break out of its prior sequence of lower lows and higher highs, forming an hourly falling channel. This may mark the final phase of short-term weakness from the lower high. However, a break over the hourly channel resistance is sought before attempting longs. Demand for sterling is likely to be affected by the movement in selected core Euro-Zone sovereign markets. In particular we note that Italian 10 year yields are shying away from 7.000%. Daily structure is also suggestive of a return to test 7.000% and higher. A continuation of higher yields may see Sterling being adopted as a safe haven again. This reasoning would likely help to keep cable within its year long range. GBP/USD daily chart, Bloomberg Finance LP Failure to remain above will see an immediate target at and then potentially trend-line support at GBP/USD hourly chart, Bloomberg Finance LP Await fresh signal. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

4 USD/JPY QUAKE SHOCK! G7 MOVE HIGH POST INTERVENTION RETRACEMENT (PIR I) POST BOJ MOVE (II) HIGH USD/JPY daily chart, Bloomberg Finance LP POST BOJ MOVE (III) PIR II BUY SIGNAL AHEAD OF NEW POST WWII LOW (75.35) USD/JPY (60 MIN) SELL SIGNAL POST BOJ MOVE (III) MULTI-YEAR PATTERN ANTICIPATES BREAKOUT (85-80) PIR III Weakening beneath (DeMark Level). USD/JPY is still weak beneath (DeMark Level), as price continues to hold within a multi-day trading range (see hourly chart below). Confirmation beneath (pivot level) would help trigger a third price retracement back to pre-intervention levels (PIR III) and potentially even a new post world war record low beneath (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, within the end of this multi-year contracting pattern (see top chart insert). This may first 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. 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 and KEY PIVOT LEVEL (77.25) TRIGGERS POST INTERVENTION RETRACEMENT 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 / Squawk Box & Bloomberg USD/JPY hourly chart, Bloomberg Finance LP Awaiting Renewed Buy Trade Setup above Ron William, Technical Strategist, r.william@migbank.com, Phone:

5 USD/CHF Encounters resistance close to our first target at Look to sell higher. USD/CHF has met resistance close to our initial target in our previous long strategy into the rise from We view the push under as potentially breaking down the short-term bullish structure. However, while above , there remains scope for a further rise back towards initially. USD/CHF daily chart, Bloomberg Finance LP Given that the region of the initial target has been tested and with yields continuing to rise in some core Euro-Zone sovereign markets, the trade location is deemed as poor. It is anticipated that a return to 7.000% in Italian 10 year yields is imminent. This may once again pressure USD/CHF to the downside. There is thus potentially a greater opportunity to sell at higher levels. Referencing Spanish and Italian government bonds back to their respective levels prior to the six party central bank agreement, we note that most of the positive after effects have worn off, with yields trading at 5.698% and 6.824% versus 6.374% and 7.355%, before the agreement. (These yields were trading at 5.699% and 6.685% respectively at the same time yesterday.) USD/CHF hourly chart, Bloomberg Finance LP Possibly looking to sell higher. Bijoy Kar, Technical Strategist, b.kar@migbank.com, Phone:

6 USD/CAD USD/CAD (Daily) Unwinding from intraday resistance at (0.9879) BUY SIGNAL CONFIRMATION ABOVE OPENS LARGER RECOVERY USD/CAD is unwinding from intraday resistance at , which coincided with a short-term DeMark exhaustion signal. The move has temporarily breached a multi-day bull-channel (see lower chart) and we prefer to wait for a resumption higher to open a buy trade setup. The bulls need to push back above and (25 Nov swing high), in order to trigger a breakout from the rate s major triangle pattern. USD/CAD daily chart, Bloomberg Finance LP USD/CAD (60 MIN) SELL SIGNAL KEY RESISTANCE (1.0425) BULL CHANNEL SIGNAL In terms of the big picture, 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 (see top chart insert). Only a sustained close beneath and , then parity unlocks bearish setbacks into the long-term 200-day MA at and (31 st Aug low). EUR/CAD is unwinding mildly ahead of the base of an important multimonth distribution pattern. A break beneath (19 th Sept low/61.8% Fib), signals an important breakdown into and would provide substantial correlation pressure onto EUR/USD. USD/CAD hourly chart, Bloomberg Finance LP Awaiting New Buy Trade Setup above Ron William, Technical Strategist, r.william@migbank.com, Phone:

7 AUD/USD AUD/USD (1 YEAR) (1.0405) SELL SIGNALS KEY ZONE 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). Even so, we expect this recovery to be short-lived and continue to hold our stop level at for the active model portfolio short position, which is still maintaining a risk-free bias. The bears must sustain below to further compound downside pressure on the rate s multi-year uptrend and push back towards Elsewhere, the Aussie has weakened sharply, as expected, 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. AUD/USD daily chart, Bloomberg Finance LP AUD/USD (60 MIN) RANGE BREAKOUT The Aussie dollar is also pairing back its mild recovery against the Japanese yen, while holding above the neck-line of its two-year distribution pattern. Watch for further downside scope into support at which would signal further unwinding of global risk appetite. BUY SIGNAL AUD/USD hourly chart, Bloomberg Finance LP SHORT 2: , Obj: /0.9380, Stop: Ron William, Technical Strategist, r.william@migbank.com, Phone: