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The Currency Futures Report

Dollar 'Responds' Favorably to Bail−Out Proceedings

Thu, Sep 25 2008, 13:53 GMT
by Bob Kozak

Alaron

Dollar Index (DXZ8):

The DX opened higher at 76.84 and slid to 76.54 as a report showed Existing Home Sales fell -2.2% to 4.91M , greater than the exp. -2.0%. Prices recovered on Fed Chrm. Bernanke's testimony in front of the House Banking Committee sending prices to a mid-day Hi of 77.04. As continued concerns were left on the table, prices drifted lower into the close of 77.88, up 23 tics. Until this 'bailout' is resolved to the best of our 'lawmakers' ability, other economic data remains mute. The s/t trend remains 'negative' w/ weak momentum indicators. Shorts need to tighten 'stops' or buy 'calls' to reduce exposure. Ahigher open should find Resistance at 77.14 and 77.40, while an open below 76.84 may find Support at 76.58 and 76.28.

British Pound (BPZ8):

The BP opened lower at 1.8488 before rising to 1.8531 on weaker U.S. Existing Home Sales. Prices retraced to a mid-day Lo of 1.8420 as the DX gained strength, before bouncing into the afternoon session. As the DX continued higher, the BP retraced into the close of 1.8467, down 67 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. Longs need to tighten 'stops'or buy 'calls' to reduce exposure. Traders continue to 'key' on the direction of the DX and if/when a 'bailout' provision will/can stabilize the U.S. financial base. A lower open may find Support at 1.8402 and 1.8336, while an open above 1.8474 should find Resistance at 1.8540 and 1.8612.

Canadian Dollar (CDZ8):

The CD opened lower at .9667 and rose to .9705, supported by higher oil/metals prices. As the DX rose, prices slid to a mid-day Lo of .9646, before moving above our Pivot level of .9668 as we begin afternoon trading. The DX rally and lower oil/metals prices sent prices lower into the close to end the day at .9670, 'flat' for the day. The s/t trend remains 'positive' w/expensive momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure. Key on the DX for direction. A lower open may find Support at .9637 and .9604, while an open above .9671 should find Resistance at .9704 and .9738.

Euro Currency (ECZ8):

The EC opened lower at 1.4700 and rose to 1.4739, before sliding to a mid-day Lo 1.4622 on a DX bounce. A firmer DX during the afternoon session sent the EC lower into the close of 1.4655, down 47 tics. The s/t trend remains 'positive' w/ firm momentum indicators. While reports indicate the EZ may currently be experiencing a 'technical' recession, sector rotation away from the DX continues to be in play. Longs need to tighten 'stops' or buy 'puts' to reduce exposure and be prepared for 'volatility' on the U.S. bailout decision. A lower open may fnd Support at 1.4596 and 1.4538, while an open above 1.4668 should find Resistance at 1.4726 and 1.4798.

Japanese Yen (JYZ8):

The JY opened lower at .9521 and slid to .9511, before bouncing to our Pivot level of .9557. Prices retraced to a mid-day Lo of .9491 and bounced into the close of .9524,down 43 tics. The s/t trend remains 'postive' w/ neutral momentum indicators. Carry-traders will key on the equity traders 'risk-tolerance' and follow their lead. Higher equities should see pressure on the JY as traders sell JY to fund purchases of higher yields. A lower open may find Support at .9477 and .9429, while an open above .9525 should find Resistance at .9573 and .9621.

Published on  Thu, Sep 25 2008, 13:53 GMT

Dollar 'Drops' on $1 .0 Trillion Bailout/Budget Concerns

Tue, Sep 23 2008, 09:15 GMT
by Bob Kozak

Alaron

Dollar Index (DXZ8):

The DX opened lower at 77.35 and rose to a morning Hi of 77.54, before retracing on concerns that the 'bailout' being proposed could increase to greater than $1 Trillion, after adding an additional $400B to insure MM funds. An increase in the budget-deficit in 09' of $31B and a 6.6% increase in the Nation Debt to $11.315T may see foreign investors standing on the sidelines until the 'dust' settles, reducing the buying of U.S. assets. Prices continued under pressure throughout the session as commodity prices 'surged', sending oil up $6.62 to $109.37, basis November and December Gold up $44.30 to $909.0. Prices continued lower into the close of 76.35, down 158 tics. The s/t trend remains 'negative' w/ weak momentum indicators. The flight to quality suggests that traders need more 'information' and a comfort level before believing the 'worst' is over. A lower open may find Support at 75.80 and 75.25, while an open above 76.84 could find Resistance at 77.39 and 78.43.

British Pound (BPZ8):

The BP opened higher at 1.8328 against the weaker DX. Prices slid to a morning Lo of 1.8278, before rising throughout the session to a daily Hi of 1.8513 and ending the session at 1.8506, up 234 tics. The s/t trend remains 'positive' w/firm momentum indicators. With odds increasing that the Fed may reduce rates 25bp at the Oct.28-29 FOMC meeting, the yield-gap w/ the BP makes the 5.0% yield or even a 4.5% yield more attractive. Traders will key on this weeks testimony of Fed Chairman Bernanke and Trea.Sec. Paulson, along with U.S. financial data. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.8622 and 1.8737, while an open below 1.8397 may find Support at 1.8282 and 1.8057.

Canadian Dollar (CDZ8):

The CD opened lower at .9518, dipped to .9516 and followed commodity prices higher throughout the session, as the DX 'wilted'. Prices hit a daily Hi of .9695 and drifted lower to a close of .9682, up 141 tics. The s/t trend remains 'positive' w/firm momentum indicators. A bail-out of the U.S. financial markets could pick up the demand for energy and another run to $150., helping Canada's export revenues. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at .9747 and .9813, while an open below .9630 may find Support at .9564 and .9447.

Euro Currency (ECZ8):

The EC opened higher 1.4550 and dipped to a morning Lo of 1.4516, before climbing against the weak DX to a daily Hi of 1.4790 and closing at 1.4780, up 337 tics. Traders rotated away from DX and into other major foreign currencies w/ higher yields. The s/t trend remains 'positive' w/ firm momentum indicators. Tighten 'stops' if your long or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.4912 and 1.5043, while an open below 1.4663 may find Support at 1.4532 and 1.4283.

Japanese Yen (JYZ8):

The JY opened higher at .9531 against the weaker DX and slid to a morning Lo of .9426, before following most other major foreign currency markets higher. Prices hit a daily Hi of .9569, before ending the day at .9559, up 144 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/neutral momentum indicators. Traders will key on the DX and equity markets for direction. A higher open should find Resistance at .9619 and .9679, while an open below .9509 may find Support at .9449 and .9339.

Published on  Tue, Sep 23 2008, 09:15 GMT

Dollar 'Drops' on Jobless Claims Increase

Fri, Aug 1 2008, 13:51 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened lower at 73.41 and slid to a morning Lo of 73.015 on a lower than expected Q2 GDP of +1.9% and an increase in the Jobless Claims of +44K, greater than the expected decrease of -5,000. As the energy markets retraced on the weaker economic data, the DX rebounded to a mid-day Hi at our Pivot level of 73.51, before drifting lower into the afternoon session. The DX slid to a close of 73.42, down 9 tics. The s/t trend remains 'positive' w/ firm momentum indicators.Traders will key on Friday's Payroll Report for direction. A higher open should find Resistance at 73.61 and 73.81, while an open below 73.31 may find Support at 73.12 and 72.82.

British Pound (BPU8):

The BP opened lower at 1.9722 and slid to a morning Lo of 1.9717 after Consumer Confidence slid to a record low of -39 in July and Home Prices slid -8.1% y/y. Weak economic U.S. data sent the BP to a morning Hi of 1.9865, before a fall in energy prices helped the DX rebound and BP retrace to a mid-day Pivot level of 1.9730. The BP bounced higher towards the close and ended the session at 1.9763, up 20 tics. The s/t trend remains 'negative' w/neutral momentum indicators. Despite the slowing economy, the attractive yield of 5.0% remains attractive as traders take direction from the DX. A lower open may find Support at 1.9698 and 1.9634, while an open above 1.9782 should find Resistance at 1.9846 and 1.9930.

Canadian Dollar (CDU8):

The CD opened higher at .9763 and slid to a morning LO of .9720 after a weaker than expected July GDP, showing a decrease of -0.1% vs the expected +0.2%. Prices rebounded on the DX sell-off, sending prices to a morning Hi of .9774, before falling to .9738 as we enter the afternoon session. The CD rebounded during the afternoon to .9772, before ending the day at .9764, up 2 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Lower oil prices continue to weigh on the CD as export revenue slows along with the global market economy. Key on the DX after Payroll Report for direction. A higher open should find Resistance at .9793 and .9820, while an open below .9756 may find Support at .9729 and .9692.

Euro Currency (ECU8):

The EC opened higher at 1.5578 after the July CPI showed the largest monthly jump of +4.1% since 1992. The inflationary data will likely pressure the ECB to consider another rate increase based on their 'hawkish' attitude towards inflation. Prices slid to a 1.5564, before bouncing to a morning Hi of 1.5665. A DX rebound sent prices to a mid-day Lo of 1.5537, before bouncing into the afternoon session. Prices rose into the close to end the session at 1.5557, up 24 tics. The s/t trend remains 'negative' w/ weak momentum indicators. A combination of a weaker DX and 'hawkish' comments from the ECB could see some short-covering and possibly spec interest at the 61.8% Fib Ret. level of 1.5521. A lower open mayf ind Support at 1.5506 and 1.5454, while an open above 1.5585 should find Resistance at 1.5637 and 1.5716.

Japanese Yen (JYU8):

The JY opened lower at .9261 and slid to a morning Lo at our initial Support level of .9247, before rebounding to a morning Hi of .9319 . Prices retraced to a mid-day Lo of .9266, before bouncing into the afternoon session. The JY bounced higher into the close and ended the session at .9292, up 20 tics. The s/t trend remains 'negative' w/ weak momentum indicators. A weak Payroll Report could spark a short-covering rally off the dble-btm low. A higher open should find Resistance at .9325 and .9357, while an open below .9286 may find Support at .9254 and .9215.

Published on  Fri, Aug 1 2008, 13:51 GMT

Dollar 'Retreats' on Continued Financial Concerns

Tue, Jul 29 2008, 14:23 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened lower at 72.90 and rose to a morning Hi at our Pivot level of 72.99, before sliding to our initial Support level of 72.81, as Financials are under pressure after PIMCO's Bill Gross stated that there could be as much as $1.0 Trillion in writedowns before the credit crunch is over. Minneapolis Fed President Gary Stern believes the 'credit crunch' will worsen. A sell-off in equity markets weighed on the DX as it traded around our Support level through to the close of 72.86, down 21 tics. The s/t trend remains 'positive' w/ topping momentum indicators. Traders will need further conviction that the 'credit-crunch' has stabilized enough for the economy gain strength, otherwise it will continue to weigh on the DX. A lower open may find Support at 72.73 and 72.61, while an open above 72.93 should find Resistance at 73.05 and 73.25.

British Pound (BPU8):

The BP opened lower at 1.9790 after a weak Housing Report showed a -4.4% drop in home prices in July from a year earlier. Despite the weak data, a weaker DX helped prices climb to a morning Hi of 1.9878, before topping out at the daily Hi at our initial Resistance level of 1.9894. The BP drifted lower into the close to end the session at 1.9877, up 57 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/neutral momentum indicators. Traders may be measuring the weakness in the U.K. eonomy against the weakness in the U.S. economy. Today, despite the weak Housing Report, the BP's 5.0% yield was on top. A higher open should find Resistance at 1.9917 and 1.9958, while an open below 1.9854 may find Support and 1.9813 and 1.9750.

Canadian Dollar (CDU8):

The CD opened lower at .9782 and slid to our initial Support level of .9768, before rising to a morning Hi of .9798 on a weaker DX and higher oil/metals prices. Prices dropped to the support level before posting a daily Lo of .9754 and bouncing to a close of .9767, down 33 tics. The s/t trend remains 'negative' w/ weak momentum indicators. The DX will continue to be key along w/ oil/metals prices. A lower open may find Support at .9740 and ..9713, while an open above .9781 should find Resistance at .9808 and .9849.

Euro Currency (ECU8):

The EC opened higher at 1.5703 and rose to a morning Hi of 1.5728, before sliding to a morning Lo of 1.5679. Prices bounced to our initial Resistance level of 1.5704 as we begin the afternoon session. A weak Gfk Institute German Consumer Confidence report for August showed a five year low of 2.1 vs 3.6 in July, which could weigh on prices. The EC managed to bounce to 1.5720 before ending the day at 1.5714, up 61 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. A higher open should find Resistance at 1.5746 and 1.5779, while an open below 1.5696 may find Support at 1.5663 and 1.5613.

Japanese Yen (JYU8):

The JY opened higher at .9311 and drift to a morning Lo of .9304, before climbing to a morning Hi of .9342 on DX weakness. Prices drifted to our Pivot level of .9330 as we enter the afternoon session. A bounce to .9341 found more sellers, which sent prices to a close of .9329 , up 36 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Traders continue to monitor the 'health' of the U.S. economy and could see higher prices on a weaker DX. A higher open should find Resistance at .9355 and .9380, while an open below .9316 may find Support at .9291 and .9252.

Published on  Tue, Jul 29 2008, 14:23 GMT

Sterling 'Lower' on Lower Retail Sales

Thu, Jul 24 2008, 14:20 GMT
by Bob Kozak

Alaron

British Pound (BPU8):

Sterling opened lower at 1.9793 after a weaker than expected Retail Sales report showed consumers tightening the belt on spending, dropping Sales 3.9% in June the most since 1986. Prices jumped to a morning Hi of 1.9806 after a weaker than expected U.S. Jobless Claim report sent the DX lower. The BP slid to 1.9741, before bouncing

Dollar Index (DXU8):

The DX opened higher at 73.055 and slid to 73.02 after Jobless Claims showed an increase of 34K to 406K. Prices bounced to 73.16 before drifting lower as traders await release of Existing Home Sales.

Canadian Dollar (CDU8):

The CD opened higher at .9895 and slid to .9887, before bouncing to .9906 as energy/metals prices find support.

Euro Currency (ECU8):

The EC opened 'flat' at 1.5633 and rose to 1.5650 on a higher U.S. Jobs report, before sliding to 1.5612 as the DX bounced.

Japanese Yen (JYU8):

The JY opened higher at .9308 as lower oil prices and a stronger DX should help the economy move forward and increase exports.

Published on  Thu, Jul 24 2008, 14:20 GMT

Yen 'Lower' As Carry−Traders Buy Higher Yields

Mon, Jul 21 2008, 15:31 GMT
by Bob Kozak

Alaron

Japanese Yen (JYU8):

The JY opened lower at .9502 as 'carry-traders' followed equtiy traders, taking on more risk and buying higher yields by borrowing the 'cheap' JY. Prices did bounce to .9513, before retacing to a morning Lo of .9473 ahead of a higher open for the equity markets. Prices recovered to a morning Hi of .9514, before higher equity prices saw carry-traders taking on more risk and pressuring the JY to a daily Lo of .9367, before bouncing to a close of .9403, down 158 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. A lower open may find Support at .9321 and .9239, while an open above .9449 should find Resistance at .9531 and .9659.

Dollar Index (DXU8):

The DX opened lower at 72.27 and slid to 72.18, before bouncing to 72.40 as equity markets move higher and oil prices lower. Prices dipped to 72.09 and bounced into the start of afternoon trading at 72.21. Lower oil prices and higher equity prices helped the DX to a daily Hi of 72.675, before sliding to a close of 72.495, up 16 tics. The s/t trend remains 'negative' w/ improving momentum indicators. Fed Funds futures traders increased the likelihood of a 25bp rate hike at the Oct. 28,-29 FOMC meeting to 74% vs. 52% Wednesday. With financials lending support to the market and oil prices lower, the temporary move could carry the DX higher. A higher open should find Resistance at 72.75 and 73.005, while an open below 72.42 may find Support at 72.165 and 71.835.

British Pound (BPU8):

The BP opened higher at 1.9948 and slid to 1.9903, before rebounding to 1.9986 as the DX trailed lower and oil prices higher. As oil prices reversed on the NG build, the DX rallied, sending the BP to a daily Lo of 1.9862, before bouncing into the close of 1.9903, up 4 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Higher inflation vs. slowing economy. Caught between a 'rock' and a 'hard place'. BoE will likely keep rates unchanged and try to contain inflation and hope oil prices and wages retrace. A lower open may find Support at 1.9848 and 1.9793, while an open above 1.9917 should find Resistance at 1.9972 and 2.0041.

Canadian Dollar (CDU8):

The CD opened 'flat'and slid to .9965, before rebounding to a morning Hi of 1.0014 along with oil/metals prices. The CD retraced to our Pivot level of .9970 as we enter the afternoon session. As energy and metals prices retraced and the DX rose, the CD retraced to a daily Lo of .9911, before bouncing to a close at .9927, down 51 tics. The s/t trend remains 'positive' w/ turning momentum indicators. Traders will key on the DX for direction and look for oil and metals to 'buffer' prices. A lower open may find Support at .9887 and .9848, while an open above .9951 should find Resistance at .9990 and 1.0054.

Euro Currency (ECU8):

The EC opened higher at 1.5813 and retraced to a morning Lo of 1.5767, before rebounding to a morning Hi of 1.5846. Prices drifted to 1.5812 as we enter the start of afternoon trading. A DX afternoon rally on lower oil prices sent the EC to a daily Lo of 1.5735, before bouncing to a close of 1.5770, up 11 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. The ECB will try to 'jawbone' rates higher to combat inflation, but the drag on exports could weigh on prices. Traders will key on the DX for direction. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.5721 and 1.5673, while an open above 1.5784 should find Resistance at 1.5832 and 1.5895.

Published on  Mon, Jul 21 2008, 15:31 GMT

Dollar Gives Back Early Gains, Despite Gov't Support

Tue, Jul 15 2008, 12:45 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened higher at 72.48 and rose to a morning Hi of 72.53 after Sec.Treasury Paulson reassured financial markets that the two largest private mortgage lenders, FNMA and FHLMC would receive help from the U.S. Treasury Dept. Prices retraced to a morning Lo of 72.215, as we head into the afternoon session. The DX posted a daily Lo of 72.11 and bounced into the close of 72.165, down 18 tics. The s/t trend remains 'negative' with weak momentum indicators. With earnings season upon us, traders will be aware of not only weak financials, but weaker confidence in a recovery from foreign money managers. Look for volatility off the morning economic data. A lower open may find Support at 71.99 and 71.815, while an open above 72.285 should find Resistance at 72.46 and 72.755.

British Pound (BPU8):

The BP opened higher at 1.9790, slid to a morning Lo of 1.9780 and rallied on DX weakness to a morning Hi of 1.9837. Prices slid lower into the afteroon session as central bankers key on the DX. As the DX continued to follow equtiy prices lower, pressure from a stronger than expected Producer Price Index should keep interest rates on 'hold' at 5.0%, as the BoE tries to lessen the rising inflation. The BP rose to a daily Hi of 1.9871, before drifting lower into the close to end the day at 1.9852, up 88 tics. The s/t trend remains 'positive'w/ firm momentum indicators. The DX will be in play as a number of economic reports should shed further light on the direction of the Greenback and the reaction of other majors. A higher open should find Resistance at 1.9901 and 1.9961, while an open below 1.9811 may find Support at 1.9751 and 1.9661.

Canadian Dollar (CDU8):

The CD opened higher at .9900 and dipped to .9897, before following most other major foreign currency markets higher as the DX retraced early gains on concerns of the two largest private mortgage lenders, FNMA and FHLMC. Prices rose to a morning Hi of .9949, before sliding into the start of afternoon trading. A choppy session saw prices drift lower into the close and end the day at .9941, up 44 tics. The s/t trend remains 'postive' w/ firm momentum indicators. Higher oil/metals prices should continue to support the CD and could break out above 'par' should the DX continues to lose confidence of traders. A higher open should find Resistance at .9976 and 1.0010, while an open below .9914 may find Support at .9880 and .9818.

Euro Currency (ECU8):

The EC opened lower at 1.5797, dipped to a morning Lo of 1.5794 and rebounded to a morning HI of 1.5863 on DX concerns. Prices slid into the afternoon session as markets adjusted to the U.S. mortgage bailout plan. After sliding to a late afternoon low of 1.5843, prices bounced into the close and ended the day at 1.5863, up 27 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure at these levels. Weak economic data will weigh on the EC as major institutional players are looking to sell 'rallies'. A lower open may find Support at 1.5789 and 1.5714, while an open above 1.5864 should find Resistance at 1.5939 and 1.6014.

Japanese Yen (JYU8):

The JY opened lower at .9404 and rose to a morning Hi of .9450 on DX weakness. Prices retraced to .9426, before continuing higher into the close to end the day at .9457 up 39 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. A higher open should find Resistance at .9485 and .9513, while an open below .9440 may find Support at .9412 and .9367.

Published on  Tue, Jul 15 2008, 12:45 GMT

Weak Economic Data Weighs on Dollar Index Ahead of FOMC

Wed, Jun 25 2008, 15:25 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened lower at 73.67 on higher oil prices and weaker equity prices. Prices touched a morning Hi of 73.70, before a weaker than expected Consumer Confidence of 50.4 v 58.1 in May and a larger than expected drop in the Richmond Fed Mfg.Survey sent prices to a morning Lo of 73.38. Lower oil prices and higher equity prices helped the DX rebound to a mid-day level of 73.60, before drifting lower towards the close of 73.595, down 22 tics. Traders will look for a less 'hawkish' tone in the Policy Statement after the 2:15 PM et rate decision, in light of today's weaker than expected economic data. The s/t trend remains 'negative' w/ neutral momentum indicators. A lower open may find Support at 73.33 and 73.08, while an open above 73.64 should find Resistance at 73.89 and 74.19.

British Pound (BPU8):

The BP opened higher at 1.9548 as traders expect the Fed to keep rates 'unchanged' at Wednesday's FOMC meeting. Prices retraced to a morning Lo of 1.9538, before weak U.S. economic data helped the BP bounce to a morning Hi of 1.9603, before sliding to 1.9572 as we begin afternoon trading. Prices trades in a tight range into the close of 1.9573, up 48 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Traders will adjust positions ahead of the Fed decision, expecting a weaker DX to send the BP higher.A higher open should find Resistance at 1.9617 and 1.9662, while an open below 1.9559 may find Support at 1.9514 and 1.9456.

Canadian Dollar (CDU8):

The CD opened lower at .9824 and slid to a morning Lo of .9820, before rebounding to a morning Hi at our initial Resistance level of .9867 on higher oil prices and weaker DX. Traders took profit at the Resistance levels, sending prices to .9847 as we enter the afternoon session. A late afternoon bounce in oil prices helped the CD hit a daily Hi of .9873, before closing at .9864, up 23 tics. The s/t trend reamains 'positive' w/ frim momentum indicators. A hgiher open should find Resistance at .9885 and .9907, while an open below .9583 may find Support at .9832 and .9799.

Euro Currency (ECU8):

The EC opened higher at 1.5501 and slid to a mornng Lo of 1.5494, before rebounding to a morning Hi at our initial Resistance level of 1.5545. Traders took profit/risk off the top, sending prices to 1.5515 as we head into the afternoon session. Traders continued to take profit/risk off the table through to the close of 1.5511, up 56 tics. The s/t trend remains 'positive' w/ neutral momentum indictors. We will see if the ECB comments on the rate decision and try to 'jawbone' the EC higher. A higher open should find Resistance at 1.5571 and 1.5630, while an open below 1.5498 may find Support at 1.5439 and 1.5366.

Japanese Yen (JYU8):

The JY opened lower at .9311, before following most other major foreign currencies higher to a morning Hi of .9359 on DX weakness. As the DX recovered, prices retraced to a morning Lo of .9298 and bounced into the afternoon session. Prices bouinced into the close to end the session at .9311, down 10 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ weak momentum indicators. With the BoJ looking to stave off a recession, keeping interest rates 'unchanged' at 0.5% will continue to weigh against more attractive rates. A lower open may find Support at .9275 and .9239, while an open above .9317 should find Resistance at .9353 and .9395.

Published on  Wed, Jun 25 2008, 15:25 GMT

Sterling 'Rebounds' on Strong Retail Sales

Fri, Jun 20 2008, 08:34 GMT
by Bob Kozak

Alaron

British Pound (BPU8):

The BP opened higher at 1.9569, slid to a morning Lo of 1.9558 and rose to a mid-day Hi of 1.9615 as higher than anticipated Retail Sales saw traders selling EC to take advantage of the 5.0% v 4.0% yield gap. With inflationary concerns increasing, the proposed rate cut should be postponed by the MPC, possibly through year end. Prices drifted lower towards the close and ended the session at 1.9606, up 141 tics.The s/t trend remains 'positive' w/ firm momentum indicators. A higher open should find Resistance at 1.9663 and 1.9720, while an open below 1.9558 may find Support at 1.9501 and 1.9396.

Dolllar Index (DXU8):

The DX opened higher at 74.00 as traders took advantage of a surge in the BP to sell EC by 'crossing' the 'pairs' with the DX. There is lower liquidity when FOREX traders try to 'cross' the BP/EC, so using the DX to acommodate higher liquidity help send the DX off the morning Lo of 73.79 back to a morning Hi of 74.00. Prices were helped by lower oil prices and the likihood of a rate increase by the Oct. 28-29 FOMC meeting. The DX drifted to a close of 73.87, up 3 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. The close above the 50% Fib Ret. level will be used as a Target Support. A higher open should find Resistance at 74.05 and 74.23, while an open below 73.82 may find Support at 73.64 and 73.41.

Canadian Dollar (CDU8):

The CD opened higher at .9849 and rose to a morning Hi of .9882, on higher than expected CPI data. As oil prices sold off, the CD slid to a morning Lo of .9844 and bounced into the afternoon session. Traders were selling the rallies throughout the afternoon, before ending the session at .9845, up 36 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. A higher open should find Resistance at .9884 and .9923, while an open below .9843 may find Support at .9804 and .9763.

Euro Currency (ECU8):

The EC opened lower at 1.5419 against the stronger BP and DX. The rally in the BP combined with the SNB keeping rates 'unchanged' saw traders taking profit/risk off the table. The SNB has followed the footprint of the ECB, which traders took as a sign that the 'hawkish' rhetoric is just that, 'jawboning'. Prices slid to a morning Lo of 1.5403 and climbed back to a morning Hi of 1.5447, before drifting lower towards the close to end the session at 1.5435, down 31 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. We will see if Trichet or the ECB 'Hawk', Alex Weber is sent to the podium to prime the pump. A lower open may find Support at 1.5377 and 1.5326, while an open above 1.5448 should find Resistance at 1.5499 and 1.5570.

Published on  Fri, Jun 20 2008, 08:34 GMT

Dollar Index 'Lower' On Prolonged Slowdown In Economy

Thu, Jun 19 2008, 12:14 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened higher at 74.05 as traders continue to focus on the likelihood that the Fed will increase s/t interest rates before year-end.Prices bounced to a morning Hi of 74.08, before sliding to a morning Lo at our Pivot level of 73.90 and bouncing into the afternoon session. Weaker equity prices and higher oil sent the DX to a mid-day Lo of 73.80, before ending the session at 73.84, down 8 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. More 'jawboning' ahead to support the DX, while awaiting results from this weekends meeting with OPEC members, to see if they will allocate more production to relieve higher Oil prices, or justify leaving production where it is. Traders will await Jobless Claims and Philly Fed Survey to determine direction. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 73.69 and 73.55, while an open above 73.95 should find Resistance at 74.09 and 74.34.

British Pound (BPU8):

The BP opened lower at 1.9403 after release of the June MPC minutes showing an 8-1 vote in favor of leaving rates 'unchanged' at 5.0%. While the ECB and Federal Reserve have been 'hawkish' in containing inflation and possibly raising rates, which has weighed on prices. As the DX retraced, the BP rose to a mid-day Hi of 1.9463, before drifting lower in early afternoon trading. As the DX drifted lower the BP rebounded to 1.9459, before ending the day at 1.9465, up 28 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ neutral momentum indicators. With no plan to increase rates, the BP may not be as attractive as the EC, but the BoE can lower rates by 25bp to stimulate the weak economy and still be competitive with a higher EC yield. We shall see. A higher open should find Resistance at 1.9514 and 1.9562, while an open below 1.9431 may find Support at 1.9383 and 1.9300.

Canadian Dollar (CDU8):

The CD opened lower at .9801 and slid to a morning Lo of .9785, before rebounding along with higher oil/metal prices toa mid-day Hi of .9826. Prices drifted lower towards the close and ended the session at .9809, down 9 tics. The s/t trend remains 'positve' w/ improving momentum indicators. Higher energy/metals prices and a weaker DX were supportive. If the anticipated rate 'cut' is now off the table, traders may find the CD more attractive. A higher open should find Resistance at .9829 and .9849, while an open below .9806 may find Support at .9786 and .9763.

Euro Currency (ECU8):

The EC opened lower at 1.5429 and slid to a morning Lo at our initial Support level of 1.5404, before a weaker DX and higher commodity prices sent the EC to a mid-day Hi of 1.5464. Higher commodity prices continue to merit the 'hawkish' tone of the ECB's need for a possible rate increase at next months rate meeting.Prices rose to a daily Hi of 1.5466, before closing at 1.5458, up 13 tics.The close above the 9-day MA changes the s/t trend to 'positive' w/ neutral momentum indicators. The proposed rate increase and a higher yield will continue to attract buyers, until the ECB retracts its 'hawkish' tone. A higher open should find Resistance at 1.5489 and 1.5519, while an open below 1.5441 may find Support at 1.5411 and 1.5363.

Japanese Yen (JYU8):

The JY opened lower at .9293 and rallied to a morning Hi of .9317, as carry-traders covered JY 'shorts' after the equity markets reversed in Europe after the Nikkei 225 was up 100+ points. Prices slid to a mid-day Lo of .9297, before rebounding on DX weakness to a daily Hi of .9330. The JY drifted into the close of .9317, up 10 tics. The s/t trend remains 'negative' w/ weak momentum indicators. More downside ahead as long as the yield-gap abroad is attractive. A higher open should find Resistance at .9342 and .9367, while an open below .9305 may find Support at .9280 and .9243.

Published on  Thu, Jun 19 2008, 12:14 GMT

Dollar Index 'Battered' by Weak Empire State Mfg., G−8

Tue, Jun 17 2008, 10:29 GMT
by Bob Kozak

Alaron

Dollar Index (DXU8):

The DX opened lower at 74.16 and retraced to a morning Lo at our secondary Support level of 73.86 after a weaker than expected NY State Mfg. Survey showed a decline of 8.68 v the expected decline of -1.0 points. Higher oil prices and a non-commital G-8 meeting weighed on prices. The DX bounced higher as we approach the afternoon session, helped by lower oil prices and higher equities and ended the session at 74.05, down 55 tics. The s/t trend remains 'positive' w/ firm momentum indicators. While a 'strong' dollar policy is acknowledged, it would be difficult for traders to bet against higher prices. A lower open may find Support at 73.74 and 73.44, while an open above 74.16 should find Resistance at 74.46 and 74.88.

British Pound (BPU8):

The BP opened higher at 1.9504 after a stronger than expected increase in the May Inflation data. Prices rose to a morning Hi of 1.9557 against the weaker DX, before sliding to 1.9506 as we head into the afternoon session. As the oil prices retreated and equity prices rose, Sterling drifted to 1.9493 as we come into the final hour of day session trading, before ending the day at 1.9503, up 170 tics. The close above the 9-day MA changes the s/t trend to 'positive' with neutral momentum indicators. Pressure will continue on the MPC to 'contain' inflation by raising rates if necessary, before trying to stimulate the economy later. The 5% yield continues to look attractive to carry-traders.

Canadian Dollar (CDU8):

The CD opened higher at .9714 and rose against the weaker DX and higher oil prices to .9793 as we approach the afternoon session. Lower crude prices weighed on the CD, sending prices to an afternoon low of .9754, before bouncing to a close of .9458, up 51 tics. The s/t trend remains 'negative' w/ weak momentum indicators. A rate cut will continue to weigh on prices A higher open should find Resistance at .9804 and .9851, while an open below .9751 may find Support at .9704 and .9651.

Euro Currency (ECU8):

The EC opened higher at 1.5391 after a stronger than expected EZ CPI report showing inflation accelerated to 3.7% in May, the highest level in 16 years. A weaker DX and higher oil prices continues to pressure the ECB to seek another rate hike as early as July. Prices rose to a morning Hi of 1.5452, before drifting to 1.5389 as we begin afternoon trading. The EC bounced into the close of 1.5418, up 136 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Pressure from today's CPI will continue weigh on the ECB to 'raise' rates at the next ECB meeting. Traders will key on Tuesday's U.S. economic data for direction. A higher open should find Resistance at 1.5487 and 1.5557, while an open below 1.5318 may find Support at 1.5313 and 1.5209.

Japanese Yen (JYU8):

The JY opened lower at .9290 and rose to a morning Hi of .9318 on DX weakness, before sliding to a morning Lo of.9282.Prices bounced to a mid-day Hi of .9311 and drifted lower as we approach the close, ending the day at .9297, up 5 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Higher inflation, higher rates and a larger yield gap for the JY to compete against. A higher open should find Resistance at .9324 and .9351, while an open below .9291 may find Support at .9264 and .9231.

Published on  Tue, Jun 17 2008, 10:29 GMT

Dollar 'Rebounds' w/ Pending Home Sales, Lower Oil

Tue, Jun 10 2008, 07:27 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):

The DX opened higher at 72.44, slid to a morning Lo of 72.41, and rose to a mid-day Hi of 72.98 after a better than expected Pending Home Sales report showed an increase of +6.3% over the previous month. Equity prices rebounded as oil prices got hit with some profit-taking, helping the DX as we move towards the closing half of the day. The DX posted a daily Hi of 73.02, before trailing to a close of 72.87, up 44 tics.The s/t trend remains 'negative' w/ firm momentum indicators. Talk of 'intervention' by Treasury Secretary Paulson got the attention of traders. While it is basically, 'jawboning', the message sent a positive tone. A higher open should find Resistance at 73.20 and 73.53, while an open below 72.69 may find Support at 72.35 and 71.83.

British Pound (BPM8):

The BP opened higher at 1.9790 and hopped to a morning Hi of 1.9792, after a higher than expected PPI increase of 1.6%, the fastest pace since 1986. This should keep interest rates on hold through the end of the year, according to BoE Governor Mervyn King. The rebound in the DX sent prices to a mid-day Lo of 1.9698, early in afternoon trading, before bouncing to a close of 1.9739, up 39 tics.The s/t trend remains 'positive' w/ firm momentum indicators. Traders will see if the DX can continue higher and key off it. A run to the Target Resistance level of 1.9821 will be the next test. A higher open should find Resistance at 1.9801 and 1.9863, while an open below 1.9730 may find Support at 1.9668 and 1.9597.

Canadian Dollar (CDM8):

The CD opened lower at .9790 and rose to a morning Hi of .9806, before sliding to a morning Lo of .9761 on DX strength and lower oil/metals prices. Traders are adjusting positions ahead of Tuesday's RBoC rate meeting, where a 25bp rate cut is likely to weigh further on prices. Short-covering off the May LO sent prices to .9791, before drifting lower into a close of .9775, down 34 tics. The s/t trend remains 'negative' w/ weak momentum indicators. While a potential rate cut has been discounted by traders, the $4.19 drop in oil prices also weighed on prices. A lower open may find Support at .9741 and .9708, while an open above .9795 should find Resistance at .9828 and .9882.

Euro Currency (ECM8):

The EC opened higher at 1.5776, before a stronger DX saw traders taking profit/risk off the table, after rising on comments from ECB President Trichet that a rate increase 'may' be necessary in July to help contain inflation. Prices retraced to a mid-day Lo of 1.5613, before bouncing towards the close of 1.5646, down 113 tics. The s/t trend remains 'positive' w/ turning momentum indicators. Will the DX get a boost from Fed Chrm. Bernanke's comments this evening. Continued DX strength will weigh on the EC and most other major foreign major currencies. A lower open may find Support at 1.5560 and 1.5473, while an open above 1.5699 should find Resistance at 1.5786 and 1.5925.

Japanese Yen (JYM8):

The JY opened lower at .9463 and bounced to a morning Hi of .9471, before a weaker 'coincident index' of 101.7 v a revised May index of +102.4, sent prices lower. The stronger DX weighed on prices and sent the JY to a morning Lo of .9405, before bouncing into the afternoon session and closing the day at .9427, down 93 tics. The s/t trend remains 'negative' w/ weak momentum indicators. We will see if carry-traders take on additional risk or sit on the sidelines. A lower open may find Support at .9361 and .9294, while an open above .9471 should find Resistance at .9538 and .9648.

Published on  Tue, Jun 10 2008, 07:27 GMT

Euro 'Rallies' on Hawkish Comments by Trichet

Fri, Jun 6 2008, 10:37 GMT
by Bob Kozak

Alaron

Euro Currency (ECM8):

The EC opened lower at 1.5392 and slid to a morning Lo of 1.5357 after the ECB left rates 'unchanged' at 4.0%. In a statement after the rate meeting, ECB President affirmed his ongoing concerns of containing inflaition, before stimulating the economy with a rate cut. His 'hawkish' tone suggested that the ECB would consider a rate hike if inflation were to increase. Traders covered 'shorts' and buyers drove the price to a mid-afternoon Hi of 1.5585 as we head into the last hour of trading. Prices hit the daily Hi of 1.5593, before sliding into the close of 1.5583, up 150 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ neutral momentum indicators. We could see further strength on carry-trade buying ahead of the U.S. Payroll report. Traders may take s/t profit/risk off the table ahead of the report, before entering further positions. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.5665 and 1.5747, while an open below 1.5511 may find Support at 1.5429 and 1.5275.

Dollar Index (DXM8):

The DX opened higher at 73.73 and rose to a morning Hi of 73.93 after a better than expected Jobless Claims report, showing a decrease of -18,000 fewer claims for unemployment. Hawkish comments from ECB President Trichet sent the EC higher and DX to a daily Lo of 73.03, before closing the day at 73.08, down 42.5 tics.The s/t trend remains 'positive' w/ turning momentum indicators. Traders will key on the Non-farm Payroll report and play-off the DX direction. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 72.76 and 72.44, while an open above 73.35 should find Resistance at 73.66 and 74.24.

British Pound (BPM8):

The BP opened lower at 1.9478 and continued lower as the DX rose. The BoE left rates 'unchanged' at 5.0%, but a rally in the EC sent the DX lower, pushing the BP to a mid-day Hi of 1.9561. Prices continued to rise into the close, hitting a daily Hi of 1.9588, before closing at 1.9581, up 48 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. Weakness in the housing sector should continue to weigh on prices and reflect the need of a rate cut, without suggesting needs to tighten, which should weigh on the BP. Remember, the BP w/ a 25bp proposed rate cut would still be more attractive in yield than the EC w/ a 25bp rate hike. A higher open should find Resistance at 1.9628 and 1.9674, while an open below 1.9537 may find Support at 1.9491 and 1.9400.

Canadian Dollar (CDM8):

The CD opened lower a .9784 and dipped to a morning Lo of .9781, before bouncing to a morning Hi of .9821 on DX weakness and higher oil/metals prices. With possible weaker Jobs data Friday and a rate cut next week, traders were taking advantage of volatility in other major players, leaving the CD to fend for itself. Prices rose to a daily Hi of .9828, before closing the day at .9815, down 18 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Lower rates ahead, should dictate lower prices, probably a the swing-low of .9760. Higher oil/metals could cushion the fall. A lower open may find Support at .9778 and .9741, while an open above .9818 should find Resistance at .9855 and .9895.

Japanese Yen (JYM8):

The JY opened lower at .9424 and slid to a morning Lo of .9399, before rebounding along with most other major foreign currency markets to a daily Hi of .9480. Prices slid to a close of .9468, down 57 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Higher equity prices could entice carry-trade activeity, sending prices lower ahead of the U.S. Payroll report. A higher open should find Resistance at .9519 and .9570, while an open below .9459 may find Support at .9408 and .9348.

Published on  Fri, Jun 6 2008, 10:37 GMT

Canadian Dollar 'Lower' on Likely Rate Cut

Thu, Jun 5 2008, 12:07 GMT
by Bob Kozak

Alaron

Canadian Dollar (CDM8):

The CD opened lower at .9901 and rose to a morning Hi of .9919, before retracing to a mid-day Lo of .9847, as a stronger DX and weaker commodity prices and a potential 'rate cut' weighed on the Loonie. Prices bounced into the afternoon session, trading in a narrow range at our initial Support level of .9863 as we head towards the close.Prices ended the session at .9833 down 74 tics. The s/t trend remains 'negative' w/ weak momentum indicators.The pending 25 bp rate cut on June 10th should see traders targeting the the swing Lo at .9756 and reacting to energy/metals prices accordingly. A lower open may find Support at .9789 and .9764, while an open above .9859 should find Resistance at .9893 and .9954.

Dollar Index (DXM8):

The DX opened 'flat' at 73.29, slid to a morning Lo of 73.26 and rose to a mid-day Hi of 73.54 on a better than expected Q1 Productivity report showing +2.6% v the expected +2.5%. Lower oil prices and higher equity prices helped the DX continue it recent rebound off the 71.915 Low on 5/27.Prices drifted lower towards the close and bounced to 73.49, up 20 tics. The s/t trend remains 'positive' w/ firm momentum indicators.With the Fed lending its support with a firm handly on inflation, rate cuts look to have ended and the next move looks to be higher. Anything close to the ADP Job forecast, showing an increase of +40,000 new private sector jobs would be better than the forecasted decline of - 40,000 jobs. A higher open should find Resistance at 73.60 and 73.71, while an open below 73.43 may find Support at 73.32 and 73.15.

British Pound (BPM8):

The BP opened lower at 1.9542 and retraced to a mid-day Lo of 1.9509, after weaker than expected Consumer Confidence report showed that growth in services dropped for the first time since 2003. The weakening economy also saw the PMI services index fall below the 50 level for the first time, hitting 49.8, since March 2003. Prices rebounded off the secondary Support level/ 61.8% fib retracement level to a1.9539, before trailing lower towards the close and ending the day at 1.9533, down 99 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Further declines in Housing Prices should weigh on the BP this week. We will see further adjustment ahead of the MPC meeting results as traders will also play off the ECB results and statement by Presindent Trichet. Technicians will look for a close above the 61.8% as a signal to cover 'short' positions. A lower open may find Support at 1.9489 and 1.9444, while an open above 1.9553 should find Resistance at 1.9598 and 1.9662.

Euro Currency (ECM8):

The EC opened lower a 1.5440 and rose to a morning Hi of 1.5475, ahead of stronger than expected U.S. economic data that sent prices to a morning Lo of 1.5414. Prices traded within a tight range ahead of Thursday's ECB rate meeting, where rates are expected to be 'unchanged' at 4.0%. The EC drifted lower into the close of 1.5433, down 34 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Traders will key on the ECB rate decision and the comments from ECB President Trichet for direction. A lower open may find Support at 1.5403 and 1.5374, while an open above 1.5439 should find Resistance at 1.5468 and 1.5504.

Japanese Yen (JYM8):

The JY opened lower at .9539 and rose to a morning Hi of .9566, before following most major foreign currencies lower against the stronger DX. Prices retraced to a morning Lo of .9488, before rebounding to a mid-day Hi of .9543. Prices consolided towards the close to end the session at .9525, down 16 tics. The s/t trend remains 'negative' w/ weak momentum indicators. While the BoJ keeps rates at 0.5% and inflation forces other central banks to keep maintain a tightening bias, the yield gap will still be attractive to s/t carry-traders, which should weigh on the JY. A lower open may find Support at .9484 and .9444, while an open above .9529 should find Resistance at .9569 and .9614.

Published on  Thu, Jun 5 2008, 12:07 GMT

Sterling 'Plummets' on Lenders Need for Cash

Tue, Jun 3 2008, 10:56 GMT
by Bob Kozak

Alaron

British Pound (BPM8):

The BP opened lower at 1.9580 after the U.K.'s largest mortgage lender, Bradford & Bingley Plc stated that it will need to sell stock at a discount to raise cash. The U.K. housing market continues to deteriorate as mortgage payments in arrears increases.Prices held above the 50% fib retracement level and bounced bounced to a mid-day Hi of 1.9659, before trailing lower towards the close of 1.9635, down 153 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ turning momentum indicators. Short-covering at the 50% fib ret..level of 1.9568 may be tested on further financial concerns. Remaining longs need to tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.9554 and 1.9472, while an open above 1.9655 should find Resistance at 1.9737 and 1.9838.

Dollar Index (DXM8):

The DX opened higher at 73.08 and rose to our initial Resistance level of 73.20 as a better than expected ISM Mfg. Index of 49.6 showed a +1.0 increase. Inflationary pressures rose from the Prices Paid section, which rose to 87.0 from April's 84.5. Prices retraced to a mid-day low at our initial Support level of 72.78 and bounced towards the close to end the day at 72.99, up 4 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. Further credit woes may weigh on prices. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 72.79 and 73.59, while an open above 73.00 should find Resistance at 73.20 and 73.41.

Canadian Dollar (CDM8):

The CD opened lower at 1.0040 and retraced against the stronger DX to a mid-day Lo at our 50% fib retracement level of .9968, before bouncing towards the close to end the day at .9981, down 70 tics. The s/t trend remains 'negative' w/ neutral momentum indicators.We will see if short-covering and bargain hunting can turn the CD around after the latest round of profit-taking. Traders will note the Factory Orders and oil/metals prices as a key for direction. A lower open may find Support at .9943 and .9904, while an open above 1.0006 should find Resistance at 1.0045 and 1.0108.

Euro Currency (ECM8):

The EC opened lower at 1.5506 and slid to a morning Lo of 1.5476, before rebounding to a mid-day Hi of 1.5580 on 'hawkish' comments from ECB President Trichet at the Euro Zone finance ministers meeting in Frankfort. As inflationary pressures continue, Trichet told attendees it was "no time for complacency'. The ECB will likely keep rate 'unchanged' at 4.00% in Thursday's ECB rate meeting. Prices retraced towards the close and ended the session at 1.5532, down 14 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. The rate meeting on Thursday may find traders adjusting positions, despite the 'on hold' jaw-boning by Trichet. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.5583 and 1.5633, while an open below 1.5529 may find Support at 1.5479 and 1.5425.

Japanese Yen (JYM8):

The JY opened higher at .9550 as carry-traders reversed positions, taking profit/risk off the table after European equity markets 'sold-off' on further financial concerns. Prices slid to a morning Lo of .9530, before short-covering and bargain-hunting sent prices to a mid-day Hi of .9620. The JY trailed lower towards the close to end the session at .9586, up 95 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. Weaker equity markets could see further short-covering from carry-traders, sending prices higher. A higher open should find Resistance at .9562 and .9538, while an open below .9519 may find Support at .9543 and .9500.

Published on  Tue, Jun 3 2008, 10:56 GMT

Dollar 'Climbs' on Higher Q1 GDP

Fri, May 30 2008, 10:38 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):

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.

British Pound (BPM8):

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.

Canadian Dollar (CDM8):

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.

Euro Currency (ECM8):

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.

Japanese Yen (JYM8):

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.

Published on  Fri, May 30 2008, 10:38 GMT

Dollar Gets 'Boost' from Durable Goods, Ex−Trans

Thu, May 29 2008, 14:45 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):

The DX opened higher at 72.60 as lower oil prices and higher equity prices improve the economic outlook. A better than expected Durable Goods report, showed that ex-transports was +2.5% and sent the DX to a morning Hi of 72.835. A rebound in oil prices sent the DX to a morning Lo of 72.52, before bouncing into the afternoon session. Prices ended the session at 72.63, up 21 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ improving momentum indicators. Traders will see if equity prices are higher overseas, which could attract carry-trade activity. The GDP and Jobless claims may limit early action, as traders will await the report before committing positions. A higher open should find Resistance at 72.91 and 73.20, while an open below 72.55 may find Support at 72.26 and 71.89.

British Pound (BPM8):

The BP opened lower at 1.9713 and slid to a morning Lo at our secondary Support level of 1.9676 on the U.S. Durable Goods report. Prices rebounded to a morning Hi of 1.9800 as oil prices recovered, sending the DX lower. Prices drifted lower into the afternoon session, touching a mid-day Lo of 1.9765, before bouncig towards the close and ending the day at 1.9773, up 42 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Carry-traders may take on additional risk and add the 5.00% yield ahead of the GDP and Jobs data. A continuation of DX strength should see longs taking profit/risk off the table and test the 9-day MA of 1.9673 level. A higher open should find Resistance at 1.9823 and 1.9874, while an open below 1.9750 may find Support at 1.9699 and 1.9626.

Canadian Dollar (CDM8):

The CD opened lower at 1.0046 as lower oil/metals prices saw traders taking profit/risk off the table.As oil/metals prices recovered and the DX retraced, the CD rose to a mid-day Hi of 1.0108 as we enter the afternoon session. Prices retraced to a mid-day Lo of 1.0080, before bouncing into the close of 1.0098, up 45 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ firm momentum indicators. The bargain-hunting and rebound of oil prices provided support, along with an improved outlook for the U.S. economy. Key on the DX-CL move for direction of the CD. A higher open should find Resistance at 1.0125 and 1.0152, while an open below 1.0081 may find Support at 1.0054 and 1.0010.

Euro Currency (ECM8):

The EC opened lower at 1.5625 and retraced to a morning Lo of 1.5595 against the stronger DX. Prices bounced into the afternoon session as oil prices rebounded, sending the DX lower as we begin afternoon trading. The EC rose to a mid-day Hi of 1.5631, before drifting lower towards the close to end the session at 1.5620, down 67 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ weaker momentum indicators. The 'inflation' factor should keep rates 'unchanged' at 4.00%, despite the slowing of economic growth. Sound familiar? Watch the DX for direction after the GDP. Longs should tighten 'stops' or buy 'puts' to reduce exposure.A lower open may find Support at 1.5561 and 1.5502, while an open above 1.5654 should find Resistance at 1.5713 and 1.5806.

Japanese Yen (JYM8):

The JY opened lower at .9546 and followed most major foreign currencies lower to a morning Lo of .9505, as the DX rose on stronger economic data. Prices rebounded to a morning Hi of .9583 as the DX followed equity prices lower and carry-traders covered 'short' JY positiions. The JY consolidated around our secondary Support level of .9569 as we approach the close, ending the session at .9563, down 37 tics. The s/t trend remains 'negative' w/weak momentum indicators. The higher close in U.S. equity markets should attract more carry-trade activity, which should weigh on prices. Traders may take profit/risk off the table ahead of U.S. GDP data and watch the DX price for direction. A test of the s/t Target Support at the .9484 level could see 'stops' adding momentum to lower prices. A lower open may find Support at .9500 and .9438, while an open above .9568 should find Resistance at .9630 and .9698.

Published on  Thu, May 29 2008, 14:45 GMT

Sterling 'Rises' As Rate−Cut Odds Decrease

Fri, May 23 2008, 09:53 GMT
by Bob Kozak

Alaron

British Pound (BPM8):

The BP opened higher at 1.9805 against a weaker Dollar, higher oil prices and inflation concerns that should keep rates 'unchanged' at the June 4-5 MPC meeting. A less than expected decline in Retail Sales helped prices bounce to 1.9820, before a DX bounce on the better than expected Jobless Claims sent the BP lower. Prices slid to a morning Lo of 1.9748, before bouncing into the afternoon session. As the DX rose, the BP retraced to a daily Lo of 1.9744, before closing the session at 1.9749, up 100 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Traders will key off the DX reaction to Existing Home Sales, before leaving for the Holiday weekend. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.9828 and 1.9908, while an open below 1.9739 may find Support at 1.9659 and 1.9570.

Dollar Index (DXM8):

The DX opened higher at 72.10 and slid to 72.05, before a decline in Jobless Claims sent prices up to our Pivot level of 72.22. Traders will key on energy prices and Friday's Existing Home Sales ahead of a Holiday weekend. Prices rose to a mid-day Hi of 72.37, before trailing lower into the afternoon session. Prices bounced to a Daily Hi of 72.41, before closing at 72.40, up 32 tics. The s/t trend remains 'negative' w/ weak momentum indicators. The close above the 61.8% Fib level may attract technicians, but a negative Existing Home Sales report could weigh on prices. Shorts may take profit-risk off the table ahead of the long Holiday weekend. A higher open should find Resistance at 72.56 and 72.72, while an open below 72.25 may find Support at 72.08 and 71.76.

Canadian Dollar (CDM8):

The CD opened higher at 1.0160, but retraced on a weaker Retail Sales report to a 1.0121 and a bounce in the DX. Prices rebounded to our opening level, before profit-taking in the energ/metals and the rising DX sent prices back to our Pivot level of 1.0134 as we begin afternoon trading. Prices continued to trade on either side of our Pivot level of 1.0134, before closing at 1.0142, down 9 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. Direction of oil/metals should dictate s/t direction. Longs need to tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.0118 and 1.0094, while an open above 1.0145 should find Resistance at 1.0169 and 1.0196.

Euro Currency (ECM8):

The EC opened lower at 1.5738 after a weaker than expected New Industrial Orders report and slid to 1.5708 against a stronger BP and firmer DX. Prices bounced to a morning Hi of 1.5743, before retracing to a morning Lo of 1.5680 against the firmer DX. The firmer DX continued to press the EC lower into the close of 1.5681, down 78 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. Hawkish tones continue to support the possibility of a rate hike, which could see traders buying the 'dips'. Longs should still tighten 'stops' or buy 'puts' to reduce exposure ahead of the Holiday weekend. A lower open may find Support at 1.5639 and 1.5596, while an open above 1.5717 should find Resistance at 1.5760 and 1.5838.

Japanese Yen (JYM8):

The JY opened lower at .9701 and retraced to .9647 against a stronger BP and firmer DX. Pressure from a stronger DX sent the JY to a morning Lo of .9617 and traded in a thin range as we begin the afternoon session. Traders took profit/risk off the table towards the close, sending prices to a daily LO of .9589 and closing at .9592, dow 119 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. Traders will key off the DX and the Home Sales report. A lower open may find Support at .9539 and .9487, while an open above .9642 should find Resistance at .9694 and .9797.

Published on  Fri, May 23 2008, 09:53 GMT

Euro 'Higher' on German Ifo Business Confidence

Wed, May 21 2008, 14:54 GMT
by Bob Kozak

Alaron

Euro Currency (ECM8):

The EC opened higher at 1.5735 after a stronger than expected German Ifo business confidence index rose +1.1 points to 103.5, vs. expected -0.4 points. Prices slid

Dollar Index (DXM8):

The DX opened lower at 72.185 as a stronger Euro and higher oil prices weighed on the Greenback. Prices bounced to 72.30, before drifting sideways as traders adjust positions ahead of the DOE and FOMC Minutes data.

British Pound (BPM8):

The BP opened lower at 1.9620 against the stronger EC and weaker mortgage lending data, showing a decrease of -8% in lending during April. Prices bounced to 1.9625, before sliding

Canadian Dollar (CDM8):

The CD opened higher at 1.0157 after a stronger than expected CPI report showing an increase in core inflation of 1.5% y/y, reducing the odds of a rate cut in the near future.Prices slid to a morning Lo of 1.0123, before bouncing

Japanese Yen (JYM8):

The JY opened higher at .9688 against a weaker DX, higher energy costs and lower equity prices. With the Nikkei Index down 233 points, 'risk-aversion' increased and carry-traders took profit/risk off the table, covering short JY positions and pushing the JY to .9694, before sliding to.9662.

Published on  Wed, May 21 2008, 14:54 GMT

Dollar 'Higher' on Leading Economic Indicators Report

Tue, May 20 2008, 15:29 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):

The DX opened lower at 72.91 and slid to a morning Lo of 72.86 as higher oil prices continued to weigh on the economy and consumers. A better than expected Leading Economic Indicators report from the Conference Board of +0.1, sent prices to a morning Hi of 73.31 as traders covered shorts and bid equities higher. Prices drifted lower to 73.18 as we enter the start of afternoon trading.

British Pound (BPM8):

The BP opened lower at 1.9488 and rose to a morning HI of 1.9509 as the latest House Price Index showed an up tick in the monthly reading. As the DX rebounded on the LEI report, traders took profit/risk off the table, sending prices to a morning Lo of 1.9410, before bouncing into the afternoon session.

Canadian Dollar (CDM8):

The CD opened higher at 1.0057 and slid to a morning Lo of1.0052, before rising to a morning Hi of 1.0098 on higher oil/metals prices and less gloom in the U.S. economic outlook. Prices slid to a mid-day level of 1.0085 and drifted lower into the close of

Euro Currency (ECM8):

The EC opened lower at 1.5556 and rose to a mornng Hi of 1.5570 as 'hawkish' comments from ECB President Trichet that "there's no room for compalcency" in its quest to curb inflation. Prices dipped to a morning Lo of 1.5463 on the DX rally, but rebounded to a mid-day Hi of 1.5494. The EC

Japanese Yen (JYM8):

The JY opened higher at .9626 and slid to a morning Lo of .9565 on the DX short-covering rally. Prices rebounded towards the close, hitting .9609, before closing the session at .

Published on  Tue, May 20 2008, 15:29 GMT

Canadian Dollar 'Higher' on Inflation Proxy Play

Fri, May 16 2008, 13:14 GMT
by Bob Kozak

Alaron

Canadian Dollar (CDM8):

The CD opened higher at .9984, slid to morning Lo of .9970 and rose to a morning Hi of 1.0005 on DX weakness and higher energy/metals prices. A weaker than expected drop in Mfg. Shipments of -1.6% sent prices to a mid-day level of .at our Pivot of .9979. Profit-taking in oil and metals pressured prices to mid-day Lo of .9935, before rebounding towards the close to end the session at .9988, up 34 tics. While the s/t outlook for the CD is 'positive' and momentum indicators are firm, a rate cut may be needed to stimulate the ecoonomy, which should weigh on prices. However, we are seeing some traders looking at the large amounts of energy/minerals/grain as a proxy play, that should hedge against rising commodity prices. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.0017 and 1.0046, while an open below .9976 may find Support at .9947 and .9906.

Dollar Index (DXM8):

The DX opened lower at 73.47 against the stronger EC and slid to a morning Lo of 73.26 on weaker Jobless Claims and Industrial Production/Capacity Utilization, before bouncing on the weak/better than expected Philly Fed Survey report. Prices rose to a mid-day level of 73.46 as we begin the afternoon session. A technical problem on the floor of the exchange suspended the trading session, with the DX trading at 73.46 and with stronger bids as the price of oil retraced ti a mid-day low of $120.65. The DX re-opened at a mid-day Hi of 73.55 and drifted lower into the close of 73.495, down 7 tics. The s/t trend remains 'positive' w/ neutral momentum indicators. Weaker economic data could still weigh on prices. Longs should tighten 'stops' or buy 'puts' to reduce exposure.

British Pound (BPM8):

The BP opened lower at 1.9373 and rose to a mid-day Hi of 1.9456 against the weaker DX, before drifting lower into the start of afternoon trading. As energy prices retraced and the DX rose, the BP slid to a mid-day Lo of 1.9385, before rising into the close of 1.9405. The s/t trend remains 'negative' w/ weak momentum indicators. With the Inflation rate increasing and rates on 'hold' for at least the next quarter, the yield-gap could attract s/t buyers. A lower open may find Support at 1.9357 and 1.9310, while an open above 1.9407 should find Resistance at 1.9454 and 1.9504.

Euro Currency (ECM8):

The EC opened higher at 1.5453 and rose to a morning Hi of 1.5496 against a weaker DX. Stronger EZ GDP and weaker U.S. economic data accounted for the early move, before prices slid to a morning Lo of 1.5434. Prices bounced higher into the afternoon session, before profit-taking in the energy sector sent equty prices higher, strengthened the Dollar and sent the EC to 1.5396, before being bid higher into the close of 1.5430, down 4 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. With rates on hold at 4.0% and comments from ECB membe Alex Weber suggesting a rate 'increase' is not off the table, we could see higher prices on a close above the 9-day MA of 1.5445. A lower open may find Support at 1.5376 and 1.5321, while an open above 1.5450 should find Resistance at 1.5505 and 1.5579.

Japanese Yen (JYM8):

The JY opened higher at .9532 and followed most other major foreign currency markets to a morning Hi of .9592 against the weaker DX. Prices drifted lower into the start of the afternoon session and bounced off the Pivot level of .9532 to our initial Resistance level of .9561. Prices rose into the close to end the session at .9562, up 49 tics.The s/t trend remains 'negative' w/ weak momentum indicators. Higher equity markets could entice carry-trade activity, which should weigh on prices. A higher open should find Resistance at .9598 and .9635, while an open below .9556 may find Support at .9519 and .9477.

Published on  Fri, May 16 2008, 13:14 GMT

Dollar 'Firm' on Weakening Inflation, Lower Oil

Thu, May 15 2008, 14:07 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):

The DX opened higher at 73.58 and rose to a morning Hi of 73.66 ahead of the CPI report. A lower than expected drop in the 'core' rate to +0.1% m/m, and +2.3% y/y suggested that inflation may be easing and rate increases may not have to be implemented as soon as origninally thought. Prices slid to a morning Lo of 73.39 and bounced into the afternoon session and climbing towards the close of 73.565, up 13 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Will slowing inflation take the need of a rate increase off the table? Odds of keeping rates 'unchanged' at 2.00% at the June 25th FOMC meeting increased to 90%. Higher equity prices in Japan may entice carry-traders to seek higher yields, which could weigh on the DX ahead of a number of economic reports, most notable would be Jobless Claims. A lower open may find Support at 73.30 and 73.04, while an open above 73.65 should find Resistance at 73.91 and 74.25.

Canadian Dollar (CDM8):

The CD opened higher at 1.0022 and rose to a morning Hi of 1.0033, continuing its four day run on growing optimisim that the 'worst' is over and a global recovery will heal all wounds. Prices slid to a mid-day Lo at our Pivot of .9960 after a weaker than expected U.S. CPI report that showed 'core' inflation lower than expected. Prices bounced into the afternoon session to an Hi of .9997, before sliding towards the close to end the session at .9964, down 1 tic. The s/t trend remains 'positive' w/ firm momentum indicators. Despite weaker energy/metals prices, the optimistism expressed of a firmer global environment may be short-lived. A lower open may find Support at .9916 and .9869, while an open above .9975 should find Resistance at 1.0022 and 1.0081.

British Pound (BPM8):

The BP opened lower at 1.9360 and rose to a morning Hi of 1.9428, after the U.S. CPI report sent the DX lower. As the DX recovered, prices slid to a morning Lo of 1.9347, before bouncing into the aftrnoon session. Prices rose to a mid-day Hi of 1.9411, before drifting lower towards the close and ending the session at 1.9391, down 15 tics. With higher inflation and a slowing economy and weak housing sector, the U.K. may be following the U.S. economy's foot-steps towards 'stagflation'. Rate cuts will take a back-seat to curtail higher inflation, which may call for a rate increase, before a decrease. Lets see if s/t carry-traders take the 5.00% yield as equity managers bid the Nikkei higher. A higher open should find Resistance at 1.9442 and 1.9492, while an open below 1.9377 may find Support at 1.9327 and 1.9262.

Euro Currency (ECM8):

The EC opened lower at 1.5414 and rose to a morning Hi at our Pivot level of 1.5463, before sliding to a morning Lo of 1.5410. Prices recovered to 1.5450 as we head into the afternoon session. The EC bounced to a mid-day level of 1.5461, before trailing lower towards the close to end the session at 1.5434, down 20 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. Pressure from comments of France's Finance Minister Christine Lagarde that the EC was 'over-valued' by up to 20% contributed to some of the risk being taken off the table. We will see if the yield-gap against the DX can attract s/t carry-traders on higher equity prices. A higher open should find Resistance at 1.5474 and 1.5513, while an open below 1.5423 may find Support at 1.5384 and 1.5333.

Japanese Yen (JYM8):

The JY opened lower at .9515 and followed most other major foreign currencies higher to a morning Hi of .9560, before drifting to a morning Lo of .9510 as the DX and equity prices moved higher. Prices bounced into the afternoon session, but slid to a daily Lo of .9508, before closing the day at .9513, down 48 tics. The s/t trend remains 'negative' w/ momentum indicators. Traders will test previous Support at the .9490 level, but a higher Nikkei could see carry-trade selling hit 'stops' below and pressure the JY further. The s/t trend remains 'negative' w/ weak momentum indicators.A lower open may find Support at .9482 and .9451, while an open above .9532 should find Resistance at .9563 and .9613.

Published on  Thu, May 15 2008, 14:07 GMT

Euro 'Firms' on 'Hawkish' Comments from ECB President

Fri, May 9 2008, 13:00 GMT
by Bob Kozak

Alaron

Euro Currency (ECM8):

The EC opened lower at 1.5315 and retraced to a morning Lo of 1.5285 after the ECB decided to keep rates 'unchanged' at 4.00%. Pressure from a higher Dollar, after the better than expected Jobless Claims report showing a decrease of 18,000 fewer on unemployment rolls weighed on the EC. Prices rebounded to a morning Hi of 1.5415 after ECB President Trichet's comments were 'hawkish' on keeping a close watch on the CPI until inflationary pressures decrease to a comfortable level. Prices traded lower into the close as some traders took profit/risk off the table ahead off the weekend, with the EC ending the session at 1.5375, up 40 tics. The s/t trend remains 'negative' w/ weak momentum indicators. The DX may go higher and could close the yield gap, especially w/ many analysts suggesting the 'worst' may be over for the U.S. economy as the EU slows. A higher open should find Resistance at 1.5427 and 1.5480, while an open below 1.5358 may find Support at 1.5305 and 1.5236.

Dollar Index (DXM8):

The DX opened higher at 73.80 and rose to a morning Hi at our initial Resistance level of 73.94 after a better than expected Jobless Claims report, showing a decrease of -18,000 on the unemloyment rolls.Prices retraced to a morning Lo of 73.43 and bounced to our Pivot level of 73.61 as we begin afternoon trading. The DX traded in a tight range into the close and ended the session at 73.66, flat. The s/t trend remains 'positive' w/ 'firm' momentum indicators. Will the economy be pulled 'down' by higher energy & food (not included in core inflation) or cling by its 'fingernails' and claw back to a snails pace? Tough to talk about raising rates, but the Fed may have to continue to pull another rabbit out of its hat to keep the economy out of an 'official' recession. A lower open may find Support at 73.37 and 73.08, while an open above 73.72 should find Resistance at 74.00 and 74.34.

British Pound (BPM8):

The BP opened higher at 1.9495 as the BoE left rates 'unchanged' at 5.00%. Prices dipped to a morning Lo of 1.9473 as the DX moved higher on better Jobless Claims. Prices bounced to a morning Hi of 1.9569, before sliding into the afternoon session and continuing down to a daily Lo of 1.9473, before closing at 1.9478, up 6 tics.The s/t trend remains 'negative' w/ weak momentum indicators. The BoE quarterly 'Inflation Report' coming out on May 14th will give a good indication of when or if the MPC will cut rates in June. Some traders took the opportunity to sell the rally ahead of what they suspect will show the economy needs some economic stimulus. A lower open may find Support at 1.9448 and 1.9418, while an open above 1.9503 should find Resistance at 1.9533 and 1.9588.

Canadian Dollar (CDM8):

The CD opened lower at .9858 and slid to a morning Lo of .9851 on a weaker than expected decrease in Housing Starts, down -12% and anticipation of a 'weak' job report on Friday. Prices bounced to a morning Hi of .9892, before sliding back to a mid-day lo of .9837, as we enter the afternoon session as traders took further 'risk' off the table, sending prices to a daily Lo of .9819 and ending the session at .9822, down 108 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ weaker momentum indicators. Higher oil and commodity prices lent some support, but not enough to cover a weaker than expected 'jobs report' on Friday. A lower open may find Support at .9797 and .9773, while an open above .9844 should find Resistance at .9868 and .9915.

Japanese Yen (JYM8):

The JY opened higher at .9602 and slid to a morning Lo of .9592, before rebounding to a morning Hi of .9691. Prices drifted lower as we enter the afternoon session, but rose into the close to end the day at .9634, up 77 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ improving momentum indicators. A lower open may find Support at .9597 and .9561, while an open above .9639 should find Resistance at .9675 and .9717.

Published on  Fri, May 9 2008, 13:00 GMT

Dollar 'Rallies' on 'One & Done' Rate Cut; For now!

Mon, May 5 2008, 10:15 GMT
by Bob Kozak

Alaron

Dollar Index (DXM8):
The DX opened higher at 73.17, dipped to a morning Lo of 73.13 and rose to a mid-day Hi at our secondary Resistance level of 73.525 in 'thin' Holiday trading, as European and Asian markets observe May Day. The 'one & done' theory on rate cuts has attracted institutional buyers as a greater than expected increase in personal spending and rally in equity prices support the move to a daily Hi of 73.585, before drifting to a close of 73.47,up 75 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Traders will key on the Payroll Report and look for direction from 'carry-traders' coming back to a stronger equity market. Will carry-traders follow the lead of equity traders and take on more 'risk' or stand on the sidelines until the release of the Payroll Report? We shall see. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 73.80 and 74.14, while an open below 73.24 may find Support at 72.91 and 72.35.

British Pound (BPM8):
The BP opened lower at 1.9808 and retraced against the DX to a morning Lo of 1.9654 in thin May Day trading. The BP rose against the EC after the BoE said in its 'financial stability report' that risk appetite will return gradually in the coming months. As the DX rallied, prices traded along the lower initial Support level of 1.9650 as we begin the afternoon session. Prices rose towards the close and ended the session at 1.9678, down 151 tics. The reversal-close below the 9-day MA changes the s/t trend to 'negative' w/ 'neutral' momentum indicators. Will the 5.00% yield attract traders at these levels? A weaker Payroll Report could see higher prices. A lower open may find Support at 1.9604 and 1.9529, while an open above 1.9728 should find Resistance at 1.9803 and 1.9927.

Canadian Dollar (CDM8):
The CD opened lower at .9890 against the stronger DX. Weaker 'commodity' prices and slowing economic conditions may see further need for economic stimulus, according to BoC Governor Mark Carney. Prices fell to a morning Lo of .9761, before bouncing into the afternoon session and rising towards the close to end the day at .9812, down 142 tics. Lower commodity prices, lower revenues, weaker economic forecast and lower rates, should weigh on prices. The reversal-day close below the 9-day MA changes the s/t trend to negative w/ neutral momentum indicators. A lower open may find Support at .9737 and .9662, while an open above .9836 should find Resistance at .9911 and 1.0010.

Euro Currency (ECM8):
The EC opened lower at 1.5485 and touched a morning Hi of 1.5493, before retracing to a mid-day Lo at our Weekly initial Support level of 1.5401 and bouncing into the afternoon session. Prices rose as shorts covered, sending the EC higher towards the close and ending the session at 1.5430, down 179 tics.The s/t trend remains negative w/ weak momentum indicators. The Payroll Report and carry-traders will look for follow-thru buying of the DX, otherwise the EC should correct and recover. A lower open may find Support at 1.5349 and 1.5268, while an open above 1.5482 should find Resistance at 1.5563 and 1.5696.

Japanese Yen (JYM8):
The JY opened lower at .9629 and rose to morning Hi of .9668, before retracing to a mid-day Lo at our initial Support level of .9584. Prices bounced towards the close and ended the session at .9606, down 44 tics. The s/t trend remains negative w/ weak momentum indicators. The Support level of .9560 has held over the last week, despite weak economic data. We could find some technical buying at the 61.8% Fib level on any test and close above .9503. A lower open may find Support at .9566 and .9527, while an open above .9625 should find Resistance at .9664 and .9723. Shorts should tighten 'stops' or buy 'call' to reduce exposure.

Published on  Mon, May 5 2008, 10:15 GMT

Euro 'Lower' on Weak German Ifo Report

Fri, Apr 25 2008, 12:14 GMT
by Bob Kozak

Alaron

Euro Currency (ECM8):

The EC opened lower at 1.5723 after a weaker than expected German Ifo Business Confidence Index fell to a two year Low of 102.4 vs. the expected 104.3. Prices continued lower to a morning Lo of 1.5643 after the DX rose on better than expected Jobless Claims and Durable Goods orders, ex. autos. Prices continued lower as the DX followed U.S. equity prices higher, sending the EC to a mid-day Lo of 1.5604, before bouncing into the close of 1.5651, down 208 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ 'weaker' momentum indicators. Watch for a possible 'reversal' by carry-traders' looking to take advantage of the large-range day. A higher Nikkei is the key, but watch the DX for follow-through buying. A lower open may find Support at 1.5543 and 1.5447, while an open above 1.5701 should find Resistance at 1.5797 and 1.5955.

Dollar Index (DXM8):

The DX opened higher at 72.445 against a weaker Euro and rose to a morning Hi of 72.83 after a better than expected Jobless Claims and Durable Goods Orders (ex.auto). A weaker New Home Sales report weighed on prices, before a bounce in financial stocks and lower oil prices triggered a rally and pushed the DX to a mid-day Hi of 72.945 and drifting lower towards the close of 72.775, up 72.5 tics. The s/t trend remains 'positive' w/ 'improving' momentum indicators. The large range up day was up on 'negative' Euro news. Now we need to see follow-through buying by funds and institutions to move higher. A higher open should find Resistance at 73.13 and 73.48, while an open below 72.59 may find Support at 72.23 and 71.69.

British Pound (BPM8):

The BP opened lower at 1.9683 against the rising DX, as traders covered DX short positions and took profit/risk off the table. Higher Retail Sales and upward revisions to January and February were unable to support prices against the rising DX. The BP retraced to a morning Lo of 1.9614, before bouncing into the afternoon session and ending the day at 1.9685, down 45 tics. The close below the 9-day MA changes the s/t tr