Alaron Currency Comment

CHICAGO - May 29/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 72.89 and slid to a morning Lo of 72.75, before a revision in Q1 GDP from +0.6 to +0.9 sent prices to a morning Hi of 73.03. Lower oil prices and Thursday's Durable Goods report contributed, as well as a drop in EZ Consumer Confidence.Prices drifted lower as Oil prices rebounded on a larger than expected drawdown. As oil prices  retraced, the DX rose to a mid-day Hi of 73.21 as we head into the afternoon session. The DX drifted lower towards the close to end the session at 73.11, up 49 tics.  The s/t trend remains 'positive' w/ firm momentum indicators. Hawkish tones on inflation should keep pressure on rates and support the DX. Will higher oil prices take the 'punch-bowl' away from the party? Keep an eye/ear open about further 'writedowns' from a number of banks/thrifts, which could dampen the enthusiasim for higher prices. A higher open should find Resistance at 73.37 and 73.63, while an open below72.95 may find Support at 72.68 and 72.25.

The BP opened lower at 1.9754 and rose to a morning Hi of 1.9780, before retracing against the stronger DX to a morning Lo of 1.9717. Prices bounced into the start of afternoon trading, but continued strength in the DX sent prices to a mid-day Lo of 1.9707, before bouncing to a close of 1.9728, down 45 tics. The s/t trend remains 'positive' w/turning momentum indicators. Weakness in the Housing sector is a 'millstone' that the U.S. is familiar with, but the proposed rate 'cut' may be on hold until Q4, keeping the yield gap in place for at least another quarter.Longs continue keep positions, suggesting the need for a 'wash-out' low close below today's close of 1.9649. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.9800 and 1.9873, while an open below 1.9725 may find Support at 1.9652 and 1.9577.  

The CD opened higher at 1.0144 and rose to a morning Hi of 1.0176 as Canada's current account surplus grew almost two times the level in Q1.  Lower oil/metal prices weighed on the  CD, sending prices to a mid-day Lo of 1.0123, before bouncing into the afternoon session.  The CD slid to a mid-day Lo of 1.0102, before bouncing to a close of 1.0111, up 13 tcis. The s/t trend remains 'positive' w/ firm momentum indicators. A stronger U.S. economy and a 'boost' in the Canadian account surplus, helped to offset the lower oil/metals prices. Will oil prices continue lower and lead to some profit-taking? A lower open may find Support at 1.0064 and 1.0017, while an open above 1.0120 should find Resistance at 1.0167 and 1.0223.

The EC opened lower at 1.5547 and rose to a morning Hi of 1.5579, before a stronger DX and weak EZ Consumer Confidence sent prices to a mid-day Lo of 1.5474. The EC bounced higher towards the close and ended the session at 1.5497, down 123 tics. The s/t trend remains 'negative' w/ weaker momentum indicators. Tech's will key on the 61.8% Fib level of 1.5466 as key Target Support. The ECB should keep rates at 4.0% and look to weather the 'storm'. Traders may find 'stops' below 1.5466, which should weigh on prices. Key on the DX. A lower open may find Support at 1.5430 and 1.5362, while an open above 1.5541 should find Resistance at 1.5609 and 1.5720.

The JY opened lower at .9512 and rose to a morning Hi of .9531, before following most other major foreign currencies to a mid-day Lo of .9453. As the DX drifted lower towards the close, the JY bounced to a close of .9483, down 80 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Carry-traders could look to take advantage of the lower prices in the BP, EC on a higher Nikkei open. The rebound into the close may be short-covering, but traders will key on the this evenings' 7:30 PM et release of   Japan's CPI, Employment Report, Houshold Spending, Industrial Production and Retail Sales. A lower open may find Support at .9432 and .9385, while an open above .9501 should find Resistance at .9548 and .9617.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the author(s) that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. and/or STAT Publishing or its staff and/or management.

PageGen v1.0ef