special study - chf/nok

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    SPECIAL STUDYCHF/NOK Stresses in the Eurozone dominate near-term. Bijoy Kar, CFA

    http://www.migbank.com/research/howard/2011-06-01_migbank_daily%20technical-analysis-report.pdfMIG BANK 14, rte des Gouttes dOr CH-2008 Neuchtel Switzerland

    Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] www.migbank.com

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    SPECIAL REPORT25 July, 2011

    www.migbank.com

    CHF/NOK Further near-term strength possible.

    CHF/NOK is currently dominated by movements in EUR/CHF. This can beexplained by the range-bound nature of the EUR/NOK chart, as displayed

    immediately to the left. Thus CHF/NOK is being driven by EUR/CHF.

    EUR/CHF is heavily influenced by stresses in the Eurozone peripherycountries and in particular by Greece, Spain and Portugal. As the yields on

    the respective bonds issued by these countries rise, we see renewed

    weakness in EUR crosses generally, but in particular in EUR/CHF, as the

    Swiss Franc is being used as a safe haven.

    The two charts displayed to the left in the lower half of the page, show 10year Italian and Spanish government bond yields. We can clearly see that

    both are trading close to the upper bound of the last 10 years range. Also

    shown is the potential neckline of a longer-term reversal pattern, warning

    of potential for yet higher yields. Should a continued rise materialise, we

    can expect EUR/CHF to be pressured to the downside.

    In fact a sustained break over 6% in both Italian and Spanish 10 yeargovernment bond yields will likely lead to a more lasting funding problem

    in both of these countries, with risks then of a bank funding crisis to follow.

    We will thus monitor these yields carefully and would advise any EUR/CHF

    trader to do likewise.

    EUR/USD

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

    CHF/NOK

    Generic Italian (left) and Spanish (right) 10 yr government bond yields,

    Weekly chart, Bloomberg FinanceLP

    EUR/NOK weekly chart, Bloomberg Finance LP

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    SPECIAL REPORT25 July, 2011

    www.migbank.com

    Limitation of liabilityMIG BANK disclaims, without limitation, all liability for any loss or damage of any kind,

    including any direct, indirect or consequential damages.

    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.

    No information published constitutes an offer or recommendation, to

    buy or sell any investment instrument, to any transactions, or to

    conclude any legal act of any kind whatsoever.

    The information published and is provided by MIG BANK for personal

    use and for purposes only and are to change without notice. MIG

    BANK makes no representations (either expressed or implied) thatthe 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 bereliable 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.

    DISCLAIMER

    LEGALTERMS

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    SPECIAL REPORT25 July, 2011

    www.migbank.comBjioy KarTechnical [email protected]

    14, rte des Gouttes dOrCH-2008 NeuchtelTel.+41 32 722 81 00

    MIG [email protected]

    CONTACT