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The Currency Futures Report

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Dollar 'Slides' As Risk−Appetite Increases

Thu, Jul 16 2009, 05:38 GMT
by Bob Kozak

Alaron

Dollar Index (DXU9):

The DX opened lower at 79.60 as equity markets moved higher after Intel Corp.
posted better than expected earnings, increasing the risk-appetite of traders as they rotate out of safe-haven assets. Prices slid to a daily Lo of 79.42, before ending the day-session at 79.46, down 91 tics. The s/t trend remains 'negative' w/weak momentum indicators. Traders will key on the equity markets to see if the buying continues over-seas, which should weigh on the DX and possibly test the Target Lo of 78.83 on 6/2. A lower open may find Support at 79.19 and 78.93, while an open above 79.69 should find Resistance at 79.95 and 80.45.

Canadian Dollar (CDU9):

The CD opened higher at .8902 against the weaker DX and higher commodity prices. Optimism that the global recession may have made a positive turn sent equtiy markets higher, along with oil prices. The CD moved higher through the afternoon, hitting a day-session Hi of .8999, before closing at .8994, up 149 tics. The s/t trend remains 'positive' w/firm momentum indicators. Higher equity prices would benefit the CD, however, any profit-taking in the equity markets, especially at the .8988 61.8% Fib level could weigh on prices. A higher open should find Resistance at .9057 and .9121, while an open below .8936 may find Support at .8872 and .8751.

Euro-Currency (ECU9):

The EC opened higher at 1.4085 and followed equity markets higher throughout the session, as traders took on more risk, sending the safe-haven assets, Treasuries and DX lower throughout the day. Prices rose to a daily Hi of 1.4137, before closing at 1.4130, up 195 tics. The close above the 10-day MA changes the s/t trend to 'positive' w/improving momentum indicators. Higher equity prices 'over-seas' could see the EC challenge the Target Hi of 1.4202 on 7/1. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 1.4190 and 1.4250, while an open below 1.4077 may find Support at 1.4017 and 1.3904.

Published on  Thu, Jul 16 2009, 05:41 GMT