Alaron Currency Comment

CHICAGO - Dec 10/07 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened lower at 76.02 against most other major foreign currencies and slid to a morning Lo of 75.97, before bouncing to a mid-day Hi of 76.15. Traders were positioning ahead of the anticipated action of the Fed tomorrow, not all in agreement as to what 'will' occur. Prices ended the day at 76.10, down 24 tics. The s/t trend remains 'positive' w/ 'neutral' momentum indicators. Traders will access the decision and act accordingly. Individual investors not in positions may wait for the decision and let the dust settle, otherwise they could get caught in 'position adjustment' moves of major institutional players and 'stopped' out. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 75.95 and 75.805, while an open above 76.125 should find Resistance at 76.27 and 76.445.  

The BP opened higher at 2.0441 and rose to a morning Hi of 2.0490 as U.K. Mfg. prices increased at the fastest annual pace since 1991. Prices rose 4.5% from a year ago, after a 3.8% gain in October. Home values also climbed 11.3% from a year earlier, sending bullish signals that further rate cuts may be on 'hold', maintaining the still attractive 5.50% yield. Prices drifted lower towards the close, as traders square-away positions ahead of Tuesday's FOMC meeting. The BP bounced into the close to end the session at 2.0459, up 149 tics. The s/t trend remains 'negative' w/ 'neutral' momentum indicators. A higher open should find Resistance at 2.0491 and 2.0523, while an open  below 2.0458 may find Support at 2.0426 and 2.0393.  

The CD opened lower at .9934 and retraced to a mid-day Lo of .9890 as BoC  officials maintain that the 'worse' is not yet over in the sub-prime areana. The latest to announce  further 'write-downs' is UBS, with another $10.0B, that would be replaced  by selling 'stakes' to investors in Singapore and the Middle East. Officials are still concerned that the global economy may continue to weaken, slowing exports.  An aggressive move  by the Fed tomorrow could possibly see another rate cut by the BoC.  Prices bounced into the close to end the day at .9928, down 30 tics. The s/t trend remains 'negatve' w/ 'weak' momentum indicators. A close above the .9970 level could  see some further short-covering, while a  break below .9823 could see lower prices. A higher open should find Resistance at .9945 and .9961, while an open below .9917 may find Support at .9901 and .9073.

The EC opened lower at 1.4718 and rose to a morning Hi of 1.4735 against a weaker DX. ECB officials are projecting higher than previously anticipated inflation in 08', after November hit 3.0% annualized. Prices slid to a mid-day Lo of 1.4708 and bounced higher into the close, ending the day at 1.4714, up 57 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ 'neutral' momentum indicators. The EC should see higher prices with an increase in the yield-gap along with higher inflation. A lower open may find Support at 1.4703 and 1.4692, while an open above 1.4719 should find Resistance at 1.4730 and 1.4736.

The JY opened lower at .8951 and rose to a morning Hi of .8964 as the DX weakened ahead of Tuesday's FOMC meeting and possible rate cut. Prices  bounced higher into the  close and ended the day at .8962, up 1 tic. The s/t trend remains 'negative' w/ 'weak' momentum indicators. Higher equity prices could attract further carry-trade activity up to the FOMC decision. A bounce off the 50% Fib level of .8940 could act as a temporary deterrent to 'shorts'. A higher open should find Resistance at .8967 and .8972, while an open below .8959 may find Support at .8954 and .8946.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the author(s) that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. and/or STAT Publishing or its staff and/or management.