Alaron Currency Comment

CHICAGO - Dec 1/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 87.08 and rose to a morning HI of 87.50 as growing concerns over the global economic slump took on a risk averse tone as traders took profit/risk off the table and foreign central banks are prepared to cut rates further this week. With the U.K. announcing weaker manufacturing data and another drop in housing prices to the weakest level in three years,  traders are expecting the BoE to announce a rate cut of 100 bp at  Thursday's MPC rate meeting to 2.00%. Prices drifted lower towards the close to end the session at 86.905, up 20 tics. The close above the 9-day  MA changes the s/t trend to 'positive' w/  firm momentum indicators. The DX may continue higher as traders seek the 'safe-haven' of the DX as equity markets continue lower and foreign central banks cut rates. A hgiher open should find Resistance at 87.43 and  87.96, while an open below 86.96 may find Support at 86.43 and 85.96.    

The BP opened lower at 1.4990 and continued to retrace after weak housing and manufacturing reports led traders to take profit/risk off the table in anticipation that the BoE will lower s/t interest rates by at least 100bp at Thursday's MPC rate meeting. The stronger DX weighed on prices, sending the BP to a morning Lo of 1.4806, before bouncing towards the close and ending the day at 1.4909, dowdn 462 tics.  The close below the 9-day MA changes the s/t trend to 'negative' w/ weak momentum indicators. Look for prices to test the Target Lo of 1.4555 on 11/13 as we approach the MPC meeting this Thursday. A lower open may find Support at 1.4677 and 1.4445, while an open above 1.5038 should find Resistance at 1.5270 and 1.5631.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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