Alaron Currency Comment

CHICAGO - Mar 19/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened lower at 83.74 and continued its slide to a mid-day Lo of 83.145, after the FOMC decision to buy back as much as $300B of U.S. government bonds and expand its purchase of MBS to $750B, on top of the already announced $500B program. The quantitative easing is designed to provide the liquidity the economy needs to spur economic growth.Traders left the safe-haven of DX and purchased higher-yielding assets. Prices bounced into the afternoon session and rose to our initial Support level of 83.75, before ending the day-session at 83.64, down 134 tics. The s/t trend remains 'negative' w/ over-sold momentum indicators. The 'knee-jerk' reaction to the Fed's move may be over-done. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. A lower open may find Support at 82.84 and 82.04, while an open above 83.94 should find Resistance at 84.73 and 85.83.

The BP opened higher at 1.4521 and continued higher against the falling DX. Prices rose to our secondary Resistance level of 1.4584, hitting a mid-day Hi of 1.4603, before drfting lower into the afternoon session. The BP ended the session at 1.4515, up 288 tics. The s/t trend remains 'positive' w/firm momentum indicators. Traders will key on equity prices to see if   'risk-tolerance' continues  or reverses to 'risk-avoidance', which could lead to  profit-taking ahead of the weekend and lower prices. A higher open should find Resistance at 1.4689 and 1.4864, while an open below 1.4429 may find Support at 1.4254 and 1.3994. The s/t trend remains 'positive'w /firm momentum indicators. Will quantitative easing in the U.K. increase? If so, will it have the  same effect on  Sterling? Traders should key on the DX for direction. Longs should tighten 'stops' or buy 'puts' to reduce exposure.  

The CD opened higher at .8190 and benefitted by the Fed's move to stimulate the U.S. economy, weaken the DX and stimulate higher commodity prices. Prices rose to a morning Hi of .8209, before sliding to our initial Resistance level of .8092 and bouncing into the afternoon session. The CD slid below our initial Resistance level of .8095 and ended the day at .8085, up 74 tics. The s/t trend remains 'positive' w/ firm momentum indicators. The 'weak' close off the Hi and below the Pivot may signal some 'profit-taking' ahead of the weekend. A lower open may find Support at .7992 and .7898, while an open above .8100 should find Resistance at .8194 and .8302. Key on commodity prices: Oil/Metals for some profit-taking, which could weigh on prices. .

The EC opened higher at 1.3666 and rose to morning Hi of 1.3737 as the DX continued to feel the effect of the sector rotation into higher yielding assets and other major foreign currencies. Prices drifted lower into the afternoon session and ended the session at 1.3666, up 241 tics. The s/t trend remains 'positive' w/ over-bot momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.3793 and 1.3926, while an open below 1.3604 may find Support at 1.3471 and 1.3282.

The JY opened higher at 1.0576 and followed most other major foreign currency markets higher as the DX continued to retrace. Prices rose to a morning Hi of 1.0703, before drifting lower into the afternoon session and closing the session at 1.0594. The s/t trend remains 'positive' w/firm momentum indicators.  A higher open should find Resistance at 1.0743 and 1.0893, while an open below 1.0553 may find Support at 1.0403 and 1.0213.  

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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