Alaron Currency Comment

CHICAGO - Jan 14/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 84.94 and rose to a morning Hi at our initial Resistance level of 85.37 after a weaker than expected Retail Sales report  sent equity markets tumbling and traders seeking  safe-haven assets. Prices drifted lower throughout the session, ending the day at 85.17, up 17.5 tics. The s/t trend remains 'positive' w/firm momentum indicators. Traders will key on Thursday's ECB rate meeting, looking for a  50bp -100bp s/t rate cut. Weak U.S. economic data could dampen  some of the effect of a rate cut, unless we see more  75bp or higher. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 85.63 and 86.09,  while an open below 84.90 may find Support at 84.44 and 83.71.  

The EC opened lower a t 1.3146 and retraced to a morning Lo at our initial Support level of 1.3064 as the DX attracted safe-haven buying as equity markets 'plunged'. Prices bounced to a mid-day Hi of 1.3172, before drifting lower towards the close and ending the session at 1.3137, down 13 tics. The s/t trend remains 'negative' w/weak momentum indicators.  Traders will key on Thursday's ECB rate decision for direction, looking for a 50bp - 100bp cut. ECB President Trichet's comments after the decision have moved  the price, depending on the forecast of further cuts. A lower open may find Support at 1.3031 and 1.2924, while an open above 1.3170 should find Resistance at 1.3276 and 1.3415.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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