Alaron Currency Comment

CHICAGO - Aug 8/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

U.S. DOLLAR INDEX (DXU6):

The DX opened higher at 84.56 and slid to a morning Lo of 84.53, before bouncing to a morning Hi at our Resistance level of 84.68. Prices dipped to 84.62 as traders patiently await the FOMC results and statement.The Fed left rates 'unchanged' at the 5.25% level and in a 'dovish' statement said "some inflation risks remain"and further changes will be 'data dependent'. The DX sold-off on the announcement as traders took further risk off the table and purchased other major foreign currencies. Prices dropped to a daily lo of 84.28, before rebounding to a close of 84.48, down 5 tics. The 'outside-day', down close continues the 'negative' trend as momentum indicators weaken and suggest lower prices ahead. A lower open may find Support at 84.26 and 84.04, while an open above 84.50 should find Resistance at 84.72 and 84.96.

CANADIAN DOLLAR (CDU6):

The CD opened higher at .8952, hit a morning Hi of .8953 and retraced to a morning Lo at our Pivot level of .8930, before bouncing to .8939 as we enter the afternoon session. As the energy/metals complex retraced and the DX recovered into the close, the CD fell to a daily Lo of .8915, before rebounding to a close of .8928, down 19 tics. The 'inside-day', down close maintains the 'positive' s/t trend, but weaker momentum indicators and lack of support from the energy/metals complex could weigh on prices.A lower open may find Support at .8911 and .8894, while an open above .8932 should find Resistance at .8949 and .8970.

BRITISH POUND (BPU6):

The BP opened higher at 1.9075 and slid to a morning Lo of 1.9058, before rebounding to our Pivot level of 1.9087 as we head into the afternoon session. As the DX retraced on the FOMC report, the BP rose to a daily Hi at our secondary Resistance level of 1.9161, before retracing to a close of 1.9106, up 34 tics. The s/t trend remains 'positive', but momentum indicators are 'over-bought', suggesting possible consolidation or profit-taking ahead. Longs should tighten 'stops' or purchase a 'put' to reduce exposure. A lower open may find Support at 1.9054 and 1.9001, while an open above 1.9107 should find Resistance at 1.9160 and 1.9213.

EURO-CURRENCY (ECU6):

The EC opened lower at 1.2873 and slid to a morning Lo at 1.2860, before bouncing to 1.2880. Traders continued to 'square-away' positions ahead of the FOMC report as the EC dipped to 1.2871 as we begin the afternoon session. The EC rose to a daily Hi of 1.2926 after the FOMC announcement, but s/t profit-taking sent prices to a daily Lo of 1.2850, before recovering to 1.2889 at the close, up 13 tics. The s/t trend remains 'positive', with 'stochastics' suggesting an over-bought bias with a 'bearish-divergent' setup. Longs should tighten 'stops' or purchase a 'put' to reduce exposure. A higher open should find Resistance at 1.2927and 1.2964, while an open below 1.2888 may find Support at 1.2851 and 1.2812.

. JAPANESE YEN (JYU6):

The JY opened higher at .8741 and rose to a morning HI of .8750, before sliding to our initial Support level of .8730 as the DX rose against most major currencies. As we begin the afternoon session, the JY bounced to our Pivot level of .8745 and rose to a daily of .8780 after the FOMC announcement, but sold-off to a daily LO at our secondary Support level of .8715, before rebounding into the close of .8749, up 9 tics. The s/t trend remains 'negative' as s/t momentum indicators weaken, suggesting consolidation at the Target Support level 18-day MA of .8700. A higher open should find Resistance at .8781 and .8813, while an open below .8748 may find Support at .8716 and .8683.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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