Alaron Currency Comment

CHICAGO - Aug 10/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

U.S. DOLLAR INDEX (DXU6)

The DX opened weaker at 84.48 ahead of the perceived increasing Trade Deficit, but rallied on the better than expected increase to only $64.8B, down from the revised $64.97B in May. Prices rose to a morning Hi of 85.21, before sliding to 85.11 as we begin the afternoon session. Prices drifted lower towards the close and ended the session at 84.95, up 45 tics.The 'outside-day', up-close above the 9-day MA changes the s/t trend to 'positive', as the short-covering rally could see more of it on the expected Retail Sales report. Momentum indicators have improved, but the DX will need to attract fresh 'longs' to move higher, otherwise traders could take profits home over the weakend, sending the DX lower. A higher open should find Resistance at 85.35 and 85.74, while an open below 84.81 may find Support at 84.42 and 83.88.

CANADIAN DOLLAR (CDU6):

The CD opened higher at .8949, hit a morning Hi of .8950 and retraced to a morning Lo of .8870 as the DX rallied and energy prices retraced on the 'terrorism' threat in the U.K.. Prices bounced to .8890 as we begin the afternoon session. The CD managed to claw out another 4 tics to close the session at .8894, down 46 tics. After not being able to take-out Monday's Hi of .8960, traders didn't need much to take risk/profit off the table on the terrorist news. The close below the 9-day MA changes the s/t trend to 'negative' as momentum indicators weaken, suggesting lower prices. A combination of lower energy prices and no 'near-term' rate increases will weigh on the CD. A lower open may find Support at .8858 and .8822, while an open above .8906 should find Resistance at .8942 and .8990.

BRITISH POUND (BPU6):

The BP opened lower at 1.9052 after reports of a 'foiled' terrorist plot to destroy a number of aircraft leaving Heathrow Airport bound for the U.S. Prices bounced to a morning Hi of 1.9070, before a DX rally sent prices to a morning Lo of 1.8878, before bouncing to 1.8900, heading into the afternoon session. As the DX retraced towards the close, shorts covered and pushed prices higher to end the session at 1.8948, down 110 tics. The close above the 9-day MA maintains the 'positive' s/t trend, but weaker momentum indicators and concerns of further threats could see traders taking more risk/profit off the table ahead of the weekend. A lower open may find Support at 1.8861 and 1.8773, while an open above 1.8965 should find Resistance at 1.9053 and 1.9157.

EURO-CURRENCY (ECU6):

The EC opened lower at 1.2884 and rose to a morning Hi at our Pivot level of 1.2900, before pressure from a stronger DX sent prices tumbling to a morning Lo of 1.2779, before bouncing to 1.2793 as we begin the afternoon session. Prices continued higher into the close as the DX weakened, sending the EC to a close of 1.2827, down 64 tics. The close below the 9-day MA changes the s/t trend to 'negative' as momentum indicators weaken, suggesting lower prices ahead. Traders will 'eye' the DX for direction; looking for lack of follow-through buying to add to EC positions. A lower open may find Support at 1.2771 and 1.2714, while an open above 1.2835 should find Resistance at 1.2892 and 1.2956.

JAPANESE YEN (JYU6):

The JY opened higher at .8756 and rose to a morning HI at our secondary Resistance level of .8760, before sliding to our initial Support level of .8692 as the DX rose against most major currencies. As we begin the afternoon session, the JY bounced to .8701 and rose as the DX retraced, to end the session at .8719, down 5 tics. The 'outside-day', down close maintains the s/t 'negative' trend, as momentum indicators continue lower, suggesting lower prices ahead. Despite the better than expected increase in consumer confidence and expansion of the Yuan trading band, the rate desparity will continue to weigh on prices if the MOF doesn't. A lower open may find Support at .8687 and .8656, while an open above .8724 should find Resistance at .8755 and .8792.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

DISCLAIMER: The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.