Alaron Currency Comment

CHICAGO - Apr 1/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

Sterling opened higher at 1.4389 and rose to a morning Hi of 1.4436 after a better than expected increase in the U.K. Manufacturing Index, showing an increase of 4.4 to 39.1 vs 34.7 in February. Prices slid to a morning Lo at our Pivot level of 1.4329, before rebounding into the afternoon session and hitting an intra-day Hi of .4451 before closing  the day-session at 1.4446, up 98 tics. The s/t trend remains 'negative' w/ firm momentum indicators. Traders will key on the ECB rate decision Thursday and await ECB President Trichet's commentary. A higher open should find Resistance at 1.4506 and 1.4567, while an open below 1.4391 may find Support at 1.4330 and 1.4215.

The DX opened higher at 85.98 and slid to a morning Lo of 85.80 after a higher than expected ADP Private Sector Payroll report, forecasting a loss of 742,000 jobs in March, greater than the Labor Department forecast of 658,000 Non-farm jobs lost. Prices rose to an intra-day Hi at our initial Resistance level of 86.25, before drifting lower into the day-session close of a 85.98, up 9 tics.  The s/t trend remains 'positive' w/ neutral momentum indicators. Firmer economic data and higher equity prices could lessen the need for 'safe-haven' positioning and weigh on prices. Traders should key on the ECB rate decision in the morning and ECB President Trichet's comments. A lower open may find Support at 85.69 and 85.40, while an open above 86.08 should find Resistance at 86.37 and 86.76.

The EC opened lower at 1.3247 and rose to a morning Hi of 1.3289, before weaker economic data showing the EZ unemployment rate  rose to 8.5% vs the revised 8.3% in January sent prices lower into the afternoon session. A rate cut of 50bp-100bp is anticipated at Thursday's ECB rate meeting, which weighed on prices heading into the close of 1.3234,  down 49 tics.  The s/t trend remains 'negative' w/neutral momentum indicators. The ECB rate decision and the statement from ECB Preisident Trichet  could  cause volatile s/t swings in the EC. Caution is advised. A  higher open should find Resistance at 1.3293 and 1.3352, while an open below 1.3230 may find Support at 1.3171 and 1.3108.  

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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