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The Currency Futures Report

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Sterling Continues To Attract Value Buyers

Thu, May 28 2009, 06:23 GMT
by Bob Kozak

Alaron

British Pound (BPM9):

Sterling opened higher at 1.5966 and rose to a Daily Hi at our secondary level of Resistance of 1.6084 as traders continued to add to what were considered 'undervalued' levels. While the Euro saw some proftit-taking after the ECB said further rate cuts were possible, traders rotated into Sterling as fund-managers look for higher prices. Traders took a little off the top today after stalling at the Resistance level, sending prices lower into the close of 1.6045, up 120 tics.The s/t trend remains 'positive' w/over-bot momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.6111 and 1.6177, while an open below 1.6018 may find Support at 1.5952 and 1.5859.

Dollar Index (DXM9):

The DX opened higher at 80.525 and drifted to a morning Lo of 80.035 as traders show concern about possible loss of its AAA credit rating and less need for safe-haven assets. Higher Crude Oil prices and continued strength in Sterling weighed on prices, until equity markets retraced and risk-aversion helped prices higher into the day-session close of 80.415, up 21 tics. Prices moved higher on globex, hitting 80.98 ahead of the globex close. The s/t trend remains 'negative'w/weak momentum indicators. Traders will adjust positions ahead of the 'end-of-month close, which could see some extended volatility. Shorts should tighten 'stops' or buy 'calls' to reduces exposure. A higher open should find Resistance at 80.68 and 80.96, while an open below 80.36 may find Support at 80..08 and 79.76.

Published on  Thu, May 28 2009, 06:26 GMT