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The Currency Futures Report

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Euro Follows Equities Higher After Confidence Improves

Fri, May 29 2009, 05:50 GMT
by Bob Kozak

Alaron

Euro Currency (ECM9):

The Euro opened lower at 1.3867 against the Dollar, before following equity markets higher as traders rotated out of the safe-haven securities and increasing their risk appetite for higher returns. A better than expected EZ economic confidence report rose +2.1 to a six month Hi of 69.3, pushing the EC to a mid-day Hi of 1.3981, before drifting lower into the close of 1.3960, up 44 tics. The s/t trend remains 'positive' w/firm momentum indicators. The s/t trend remains 'positive'w/topping momentum indicators. Traders will key look for help from higher equity markets. End of month repositioning could see an increase in volatility ahead of the weekend. A higher open should find Resistance at 1.4030 and 1.4101, while an open below 1.3911 may find Support at 1.3840 and 1.3721.

Dollar Index (DXM9):

The DX opened higher at 80.93 as concerns that tighter credit would weigh on the recovery effort. Better than expected economic data on Advanced Durable Goods sent equity markets higher and the DX to a morning Lo of 80.315, before bouncing above our Pivot level of 80.47 and ending the day-session at 80.50, up 8.5 tics. The s/t trend remains 'negative' w/ weak momentum indicators. An increase in risk-appetite by equity traders overnight could weigh on the Dollar. A lower open may find Support at 80.14 and 79.79, while an open above 80.67 should find Resistance at 81.02 and 81.55.

Japanese Yen (JYM9):

The Yen opened lower at 1.0313 as traders and investors sought higher returns by selling JY and investing in higher yielding securities. Prices slid to a morning Lo of 1.0285, before bouncing to 1.0359 and drifting lower to a close of 1.0322, down 184 tics. The close below the 10-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. A continuation of higher equity prices in Asian markets could weigh on the Yen. A lower open may find Support at 1.0238 and 1.0154, while an open above 1.0369 should find Resistance at 1.0453 and 1.0584.

Published on  Fri, May 29 2009, 05:55 GMT