Alaron Currency Comment

CHICAGO - Ma09 13/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 82.60 and rose to a morning Hi of 82.85, as weaker equity markets retraced further after  a lower Retail Sales report. Prices slid to a mid-day level of 82.39 and bounced into the afternoon session, ending the day-session at 82.63, up 21 tics. The s/t trend remains 'negative' w/ weak  momentum indicators.Traders concerned with increasing their 'risk-avoidance' will key on the global equity market activity, which could support a higher  Dollar. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. Thursday's weekly employment data may increase volatility early in the session. A higher open should find Resistance at 83.01 and 83.39, while an open below 82.49 may find Support at 82.11 and 81.59.

Sterling opened lower at 1.5147 after comments from BoE Governor Mervin King stating the 'economy will face a slow recovery', following a downbeat BoE Inflation Report. Prices bounced to a mid-day level of 1.5210, before drifting lower into the close of 1.5168, down 103 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. A slowing economy and an equity retracement could weigh on  Sterling against a higher DX. Longs should  tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.5058 and 1.4947, while an open above 1.5194 should find Resistance at 1.5305 and 1.5441.    

The EC opened lower at 1.3632 after a weaker than expected Industrial Production report showing the biggest annual decline since 1986, down -20.2% y/y. Prices continued lower against the stronger DX, bouncing off our initial Support level of 1.3565 to a mid-day level of 1.3654, before heading lower towards the close, ending the day-session at 1.3607, down 30 tics. The s/t trend remains 'positive'w/firm momentum indicators. Weaker economic data  and lower Q1 GDP may  pressure lower prices, however, with a 'cap' on lowering rates and less quant-easing, the 'yield-gap' may  support prices.  Longs should tighten 'stops' or buy 'puts' to reduce exposure. Traders will key on the risk-appetite of traders for a key to DX direction. A lower open may find Support at 1.3540 and 1.3472, while an open  above 1.3629 should find Resistance at 1.3697 and 1.3786.  

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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