Alaron Currency Comment

CHICAGO - Jul 23/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 72.80 as lower oil prices, bail-out provisions for FNMA/FHLMC and talk of increasing rates sent the DX to a morning Hi of 73.03, before trailing lower as we enter the afternoon session. As energy prices continued lower, the DX rose to a mid-day Hi of 73.09 and ended the session at 73.04, up 36 tics. The s/t trend remains 'positive' w/ firm momentum indicators. So far, so good. Longs should tighten 'stops' or buy 'puts' to reduce exposure.  A higher open should find Resistance at 73.21 and 73.38, while an open below 72.92 may find Support at 72.75 and 72.46.

The BP opened higher at 1.9925 as release of the minutes of the last MPC rate meeting showed 'mixed' results, with one member voting to 'hike' rates. No conviction to lower rates, suggests the attractive 5.0% rate will be available a bit longer for 'yield-buyers'. Prices rose to a mid-day Hi of 1.9960, before the stronger DX sent prices back to our pivot level daily Lo of 1.9880. Prices bounced into the close to end the session at 1.9891, up 53 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ firm momentu indicators. A lower open may find Support at 1.9823 and 1.9756, while an open above 1.9892 should  find Resistance at 1.9959 and  2.0028.    

The EC opened lower at 1.5688 and rose to a morning Hi of 1.5712, before DX strength and a lower than expected Industrial Orders report showing a decrease of -3.5% vs. the expected cut to -1.3%  , sent prices lower throughout the session. Prices fell to a daily Lo of 1.5626, before ending the session at 1.5633, down 107 tics. The s/t trend remains 'negative' w/ weaker momentum indicators. Traders will key on the DX and look for support at the 'swing-low' on 7/7 of 1.5555. We will see if the ECB will support higher prices w/ the 'inflation' protection  rhetoric.  Tech's will eye the 50%  Fib Ret. level at 1.5610 for some short-covering. A lower open may find Support at 1.5588 and 1.5543, while an open above 1.5671 should find Resistance at 1.5716 and 1.5799.  

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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