Alaron Currency Comment

CHICAGO - Ma09 4/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 84.89 and rose to a morning Hi of 85.03, before better than expected economic data from Pending Existing Home Sales and Construction Spending sent a positive message to equity buyers that the worse may be behind us. An increase in China's PMI helped boost risk appetite that sent equities higher and the DX to a morning Lo of 83.81 at mid-day, before bouncing higher into the close of 84.11, down 59 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Traders will key on global equity prices for further keys to  risk-tolerance and direction. A lower open may find Support at 83.60 and 83.09, while an open above 84.31 should find  Resistance at 84.82 and 85.53.    

The CD opened lower at .8428 against the DX, before rebounding   as traders exited the safe-haven of Dollars for more risk-tolerance in the equity markets, sending  the CD to a mid-day Hi at our secondary Resistance level of .8517. Higher  commodity prices and the possibility  that the worse of the recession is behind us kept prices in the upper  level of the daily trading range, before drifting lower  towards the close of .8498, up 47 tics.  The s/t trend remains 'positive' w/ firm momentum indicators. The lower DX will continue to support higher commodity prices, equity prices and the CD. Traders should tighten 'stops' or buy 'puts' to reduce exposure to towards end of the week economic data, that could support risk-aversion and higher DX. A higher open should find Resistance at .8451 and .8585, while an open below .8474 may find Support at .8430 and .8363.    

The EC opened lower at 1.3221 and slid to our secondary level of Support of 1.3210, before climbing to a mid-day Hi of 1.3428 as the DX retraced. Prices  drifted lower towards the close as traders took a little off the top ahead of Thursday's ECB rate meeting, as prices ended the day-session at 1.3371, up 106 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. While risk-aversion supports higher prices, Thursday's ECB rate meeting may see a 25bp-50bp rate cut along with some 'form' of quantitative easing' to  help the slowing EZ economy. A higher open should find Resistance at 1.3463 and 1.3554, while an open below 1.3336 may find Support at 1.3245 and 1.3118.  

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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