Alaron Currency Comment

CHICAGO - Oct 9/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The CD opened lower at .8926 and followed oil prices lower to a morning Lo of .8709. The global slowdown is taking its toll on oil exports, which makes up 21% of Canada's Commodity Price Index. Talk of further rate cuts at the Oct.21st RBoC rate meeting may add further pressure to the CD. Prices bounced to a mid-day level of .8744, before bouncing to a close of .8768, down 165 tics The s/t trend remains 'negative' w/ over-sold momentum indicators. Traders will need to see a dramatic change in the global atmosphere to support higher commodity prices to support Canada's export economy. Expect changes and recommendations out of the G-7 meeting that could lead to market volatility. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. A lower open may find Support at .8658 and .8549, while an open above .8819 should find Resistance at .8928 and .9089.

The DX opened higher at 81.07 and rose to a morning Hi of 81.59 as traders look for global markets to stabilize  as equity prices rebound and G-7 finance ministers head to Washington D.C. looking to resolve the 'credit' crisis. Prices traded lower into the afternoon session as 'credit' markets remain tight pressuring financial markets. The DX ended the day at 81.365, up 32 tics. The late-day sell off in the equity markets continue to suggest that credit 'fears' will continue to play 'havoc' with global markets. Traders will key on GE's forecast as a barometer ahead of the open. The s/t trend remains 'positive' w/ expensive momentum indicators. A higher open should find Resistance at 81.75 and 82.13, while an open below 81.20 may find Support at 80.81 and 80.26.

The BP opened higher at 1.7350 and rose to a morning Hi of 1.7399, before retracing against a rising DX to a mid-day Lo of 1.7152. As the DX drifted lower into the afternoon session, the BP rose into the close to end the day at 1.7199, down 105 tics. The s/t trend remains  'negative' w/ over-sold momentum indicators.  Pressure from the housing sector continues to see 'banks' and mortgage lenders needing 'bail-outs' from the government and need for further rate cuts. Traders should tighten 'stops' or buy 'calls' and sell the 'bumps'. A lower open may find Support at 1.7101 and 1.7003, while an open above 1.7250 should find Resistance at 1.7348 and 1.7497.

The EC opened higher at 1.3750 and rose to a morning Hi of 1.3763, before falling to a morning Lo of 1.3635 as pressure from a rising DX and talk of another 'rate' cut by the ECB weighed on prices. As the DX retraced from mid-day levels, the EC bounced higher  towards the close to end the day at 1.3690, down 20 tics. The s/t trend remains 'negative' w/ weak momentum indicators. A lower open may find Support at 1.3596 and 1.3501, while an open above 1.3715 should find Resistance at 1.3810 and 1.3929.

The JY opened lower at 1.0014 as higher equity prices in Europe and the U.K. enticed the risk appetite of carry-traders seeking higher yields. Prices slid to a morning Lo of .9930, before rebounding to a morning Hi of 1.0054. Prices dirifted lower towards the close to end the session at 1.0026, down 22 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. The late day equity 'sell-off' should lead to continuation in Asian markets and flight to quality as carry-traders take profit/risk off the table and cover JY shorts, sending prices higher. A lower open may find Support at .9912 and .9799, while an open above 1.0044 should find Resistance at 1.0157 and 1.0289.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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