Alaron Currency Comment

CHICAGO - Aug 4/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

The following information and technical indicators are designed to assist you in your decision making process for investing in the Currency Market. I strongly suggest each investor have a plan to follow for each trade that will determine: entry level, profit objective and risk tolerance, to help alleviate the emotional swings of trading. If you are looking for assistance in developing a strategy, give me a call at 800.462.4691.

For those of you looking for a predetermined risk level, i.e. worst case scenario, you may want to explore purchasing options and /or spreads as an alternative to futures. Call me for specific recommendations.

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The DX opened higher at 84.93 and rose to our initial Resistance level of 84.97, before pressure from 25bp rate increases by the BoE and the ECB, along with a 'hawkish' statement by Trichet, sent the DX to a morning Lo of 84.65. Prices rebounded to a day-session Hi at our secondary Resistance level of 85.10, before sliding to 85.03 as we head into the afternoon session. Traders started to take more risk off the table towards the close, pushing the DX lower to a close of 84.80, down 3 tics. Technicals will give-way to the Payroll Report that should give a 'thumbs' up/down, based on the number of jobs. The trade is suggesting a 'pause' by the Fed, which should send the DX lower, but if Jobs come in > 150,000, the DX should move higher and hit a bunch of 'stops'. Be cautious and 'Wait' for the results! A lower open may find Support at 84.58 and 84.35, while an open above 84.87 should find Resistance at 85.10 and 85.39.

CANADIAN DOLLAR (CDU6):

The CD opened higher at our initial Resistance level of .8912 and took advantage of a lower DX to post a morning Hi at .8919. As the DX rebounded and the energy/metals complex got hit with profit-taking, the CD retraced to a morning Lo of .8881, before bouncing to .8888 as we begin afternoon trading. As the DX retraced the CD followed most other major foreign currencies higher toward the close, ending the session at .8900, up 8 tics. The CD faired well, despite the rate hikes and lower energy/metals prices. The s/t trend remains 'positive' with improving momentum indicators, but should the U.S. Payroll report boost the DX, the CD could take a hit, along with metals. A higher open should find Resistance at .8919 and and .8938, while an open below .8900 may find Support at .8881 and .8862.

BRITISH POUND (BPU6):

The BP opened higher at 1.8869 after the BoE raised rates by 25bp to 4.75%, sending the BP to a morning Hi of 1.8930. Prices retraced to a morning Lo at our secondary Resistance level of 1.8855 and bounced to 1.8860 heading into the afternoon session. Prices continued higher into the close and ended the session at 1.8903, up 100 tics. The 'gap-open' higher and strong close, along with improving momentum indicators could see the BP reach for a test of the May Hi at 1.9020. 'Longs' should tighten 'stops' ahead of the Payroll Report to reduce exposure. A higher open should find Resistance at 1.8937and 1.8971, while an open below 1.8896 may find Support at 1.8862 and 1.8821.

EURO-CURRENCY (ECU6):

The EC opened lower at our initial Support level of 1.2819 and rose to a morning Hi of 1.2870 after 'hawkish' comments from ECB President Trichet, suggesting future rate increases could be forthcoming. Prices retraced to a morning Lo at our secondary Support level of 1.2799, before bouncing to 1.2813 as we move into the afternoon session. Prices continued higher into the close; ending the day at 1.2846, up 3 tics. The doubt about 'future' rate increases shows in the 3 tic move. A lower DX should propel the EC and take out the July Hi of 1.2920. Time for 'longs' to tighten stops or purchase a 'put' ahead of the Payroll Report. A higher open should find Resistance at 1.2878 and 1.2909, while an open below 1.2838 may find Support at 1.2807 and 1.2767.

. JAPANESE YEN (JYU6):

The JY opened lower at .8756 and rose to a morning Hi of .8775 on DX weakness, before retracing to a morning L of .8724 on the DX rebound. Prices bounced to .8729 as we approach the afternoon session. The JY benefitted from the DX weakness and closed the session at .8754, down 36 tics. The s/t trend remains 'positive', but weak, as higher interest rates and higher energy prices could take its toll. A higher open should find Resistance at .8778 and .8802, while an open below .8751 may find Support at .8727 and .8700.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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