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Best Technical Trades Paul Ciana, CMT MLPF&S paul.ciana@baml.com Technical trends for Trump ¢ Bullish USD: Breadth and technicals favor USD. Overall they point to a stronger US dollar in 2017. We are bullish USD/JPY. e Higher yields: US 10y and 30y yield made large wedge bottom patterns, pointing to a 61.8% Fibonacci retracement of 2.98% and 3.80%, respectively. e Werecommend buying a NZD/USD 5m .69/.66 put spread 1x1.5 for 43 USD pips (off of .7100 spot). USD rally is turning Into an outright bull The Bloomberg US dollar index is approaching all-time highs. The number of USD crosses above their 200-day moving average has broken out higher. The number of USD crosses reaching overbought on RSI (bullish momentum) continues to rise. The USD cumulative advance-decline line recently signaled for tactical USD strength and would turn outright bullish with a trend line break and new index highs. Chart 79: Bloomberg US dollar index, weekly chart with USD breadth measures MEBDXY Index - Last Price MISMAVG (200) on Close (BEDXY) 119147 Resistance: 1255 | A wn "ete I 1 ane? whe ae 1150 BUSD Cumulative AD Line +23.00 [2 | 2 =" Progresshe AD Line ate nearing breakout . Ors, ; np _— Be of USD crosses > 200d SMA «1nd Breakout Be of USD crosses RSI>70 a0 ee Rising bullish momentum iF 10 ro 2013 2014 2015 2016 2017 Source: BofA Merrill Lynch Global Research, Bloomberg Bankof America “a Global Rates, FX & EM 2017 Year Ahead | 16 November 2016 47 Merrill Lynch HOUSE_OVERSIGHT_014777