Alaron Currency Comment

CHICAGO - Oct 6/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The JY opened higher at .9768 as the credit crisis deepened in Europe, forcing carry-traders to cover 'short' JY positions and sending prices to a morning Hi of 1.0049. Prices drifited lower into the afternoon session as traders 'anxiety'  lessened as central bankers  came to the aid  of more 'troubled' banks.  The JY bounced higher towards the close to end the session at .9996, up 433 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. Traders will keep an eye on the equity markets and follow their lead; continued selling, more short-covering in the JY; higher equities, increased risk taking and lower JY. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.0173 and 1.0350, while an open below .9872 may find Support at .9695 and .9394.

The DX opened higher at 81.25 and rose to a morning Hi of 82.00 as 'safe-haven' buying in U.S. Treasuries increased as dwindling confidence in the foreign central banks continued. Prices drifted lower into the afternoon session as traders adjust to market conditions. A late afternoon rally in equity markets sent the DX  to a  day-session Hi and close of 81.975, up 139 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Traders will key on the credit markets for the 'flight-to-quality' trade. Continued turmoil in 'overseas' markets should see a higher DX, while less stress could see some s/t profit-taking. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 82.29 and 82.60, while an open below 81.71 may find Support at 81.40 and 80.82.

The BP opened lower at 1.7569 against the stronger DX and  loss of confidence in financial institutions to survive the global 'recession'. Prices  retraced to a morning Lo of 1.7303 as traders sought the 'safe-haven' of U.S. Treasuries and guaranteed deposits. Prices bounced to a mid-day Hi at our secondary Support level of 1.7404 as we head towards the close, before ending the session at 1.7375, down 366 tics. The s/t trend remains 'negative' w/weak momentum indicators. The weakness of the housing sector continues to weigh on economy, which could see pressure on 'lenders' and lower prices for Sterling. Keep an eye on the Target Support level of 1.7327 on 9/11. A lower open may find Support at 1.7218 and 1.7061, while an open above 1.7460 should find Resistance at 1.7617 and 1.7859.

The CD opened lower at .9219 against the stronger DX and followed most other major foreign currency markets lower to a morning Lo of .9026. Pressure from falling oil/commodity prices outweighed the safe-haven buying of gold as prices consolidated during the afternoon session. The CD ended the session at  .9056, down 212 tics. The s/t trend remains 'negative' w/ over-sold momentum indicators. The CD needs  help from a  weaker DX or higher commodity prices, which could lead to a short-covering rally. A lower open may find Support at .8962 and .8869, while an open above .9120 should find Resistance at .9213 and .9371.  

The EC opened lower at 1.3632 as investors continue to lose confidence in the financial system in Europe. Prices retraced to a morning Lo of 1.3475 against the stronger DX, before Germany 'declared' a guarantee of bank deposits held by private savers. Prices bounced to 1.3547, before sliding to a mid-day Lo of 1.3471. A DX move higher towards the close sent the EC lower towards the close to end the session at 1.3461, down 368 tics. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. Central Bank 'intervention' could see another 'volatile' session. A lower open may find Support at 1.3373 and 1.3286, while an open above 1.3536 should find Resistance at 1.3623 and 1.3786.

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