Alaron Currency Comment

CHICAGO - Sep 18/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened lower at 77.62 and slid to a morning Lo of 77.45, before bouncing to a morning Hi of 78.28. A $247B infusion into major money central banks to increase liquidity encouraged traders to take on more risk and buy higher yielding currencies. Prices drifted  to a mid-day level of 77.63  as equity markets retraced to their lowest levels of the day. The DX bounced higher towards the close as equity markets moved into positive territory,with the DX ending the session at 78.08, down 1 tic. The Resolution Trust Corp.proposed by Trea.Sec.Paulson presents a possible solution for 'troubled' derivatives to be purchased and remarketed at a more opportune time, without the seller taking exorbitant losses in today's market.Shorts should tighten 'stops' or buy  'calls' to reduce exposure. A higher open should find Resistance at 78.67 and 79.26, while an open below 77.99 may find Support at 77.40 and 76.71.    

The BP opened higher at 1.8200 against the weaker DX and touched a morning Hi of 1.8207 after a surprising rise in Retail Sales. As the DX rose, prices slid to a morning Lo of 1.8082, before bouncing to a mid-day Hi of 1.8218. A late afternoon short-covering equity rally sent the DX higher and BP lower into the close, ending the day at 1.8139, down 16 tics. The s/t trend remains 'positive' w/firm momentum indicators. Traders will key on the DX move along w/ the equity rally, which could lead to increased risk tolerance and carry-trade activity. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.8232 and 1.8326, while an open below 1.8125 may find Support at 1.8031 and 1.7924.  

The CD opened higher at .9440 against the lower DX and higher commodity prices. A jump in the DX and drop in oil prices sent the CD lower to our Pivot level of .9353, before higher oil/metals prices pushed the CD higher into the close of .9386, down 2 tics.  The s/t trend remains 'positive' w/firm momentum indicators. The DX rally saw traders taking profit in gold, but instilling some hope for the U.S. economy, which could help Canada's export revenues. Longs should tighten 'stops' or buy  'puts' to reduce exposure.  A lower open may find Support at .9324 and .9263,  while an open above .9402 should find Resistance at .9463 and .9541.    

The EC opened higher at 1.4506 and rose to a morning Hi of 1.4519, before sliding to a morning Lo of 1.4350. DX weakness saw prices bounce to a mid-day level of 1.4466, before drifting lower towards the close of 1.4381, up 10 tics. The s/t trend remains 'positive' w/neutral momentum indicators. The DX could continue higher and weigh on prices. A lower open may find Support at 1.4257 and 1.4132, while an open above 1.4399 should find Resistance at 1.4524 and 1.4666.  

The JY opened higher at .9653 and slid to a morning Lo of .9593, before rising to a mid-day Hi of .9735 as U.S. equity markets continued lower as risk-aversion sent carry-traders scurring for safe-haven assets, covering any short JY positions. A late afternoon equity rally sent the DX higher and the JY lower into the close of .9668, up 64 tics. Longs need to tighten 'stops' or buy 'puts' to reduce exposure. An increase of risk-tolerance by equtiy traders could see the same action by s/t carry-traders seeking higher yields with funds borrowed at 0.5%. A higher open should find Resistance at .9744 and .9821, while an open below .9659 may find Support at .9582 and .9479.

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.