Alaron Currency Comment

CHICAGO - Sep 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 85.42 and rose to a morning Hi at our Weekly secondary Resistance level of 85.63 after worries about 'inflation' crept into the picture again on Wednesday's economic data. Short-covering saw traders taking profit/risk off the table in most major foreign currencies. Prices drifted to 85.40 as we enter the start of afternoon trading. Prices bounced higher into the close to end the session at 85.49, up 45 tics. The s/t trend remains 'positive' as momentum indicators move higher, suggesting higher prices ahead. We will need to see follow-thru buying to confirm any change from 'pause' to 'increase' in the minds of traders. A higher open should find Resistance at 85.72 and 85.97, while an open below 85.39 may find Support at 85.14 and 84.81.

CANADIAN DOLLAR (CDU6):

The CD opened higher at .9050 and bounced off the morning Hi of .9051, before pressure from a stronger DX and a weaker energy/metals complex sent prices down to a morning Lo at our initial Support level of .9005. Prices bounced to .9012 as we enter the afternoon session. Prices traded in a tight range to end the session at .9013, down 35 tics. The close below the 9-day MA changes the s/t trend to 'negative' as momentum indicators weaken. Lower energy/metals prices and a stronger DX could weigh further on prices. A lower open may find Support at .8995 and .8977, while an open above .9023 should find Resistance at .9041 and .9069.

BRITISH POUND (BPU6):

The BP opened lower at 1.8736 as traders took profit/risk off the table after the BoE left rates 'unchanged' and sent prices to a morning Lo of 1.8707. Prices rebounded to our secondary Support level of 1.8768 at the start of afternoon trading. Sellers took over the afternoon session, sending prices lower into the close of 1.8756, down 95 tics. The s/t trend remains 'negative' and momentum indicators continue to weaken, suggesting a test of the 50% Fib Ret. level of 1.8681 as Target Support. A lower open may find Support at 1.8714 and 1.8671, while an open above 1.8749 should find Resistance at 1.8792 and 1.8827.

EURO-CURRENCY (ECU6):

The EC opened lower at 1.2735 and slid to a morning Lo of 1.2713 as pressure from a stronger JY and DX forced traders to take profit/risk off the table. Prices bounced to a morning Hi at our secondary Support level of 1.2760 as we begin the afternoon session. Lack of follow-thru buying at the Res/Support level of 1.2760 saw sellers control the afternoon session, sending the EC to a close of 1.2742, down 82 tics. The close below the 9-day MA changes the s/t trend to 'negative' as momentum indicators weaken, looking to 'hold' above the 50% Fib Ret. level of 1.2725. A higher open should find Resistance at 1.2766 and 1.2791, while an open below 1.2740 may find Support at 1.2715 and 1.2689.

. JAPANESE YEN (JYU6):

The JY opened higher at our initial Resistance level of .8608 as traders focus on the G-7 conference and addressing the 'floundering' JY. Short-covering sent the price to a daily Hi at our secondary Resistance level of .8615, before retracing to a morning Lo of .8583. As we begin the afternoon session, the JY bounced to .8608 and drifted in a tight range to a close of .8604, up 12 tics. The s/t trend remains 'positive' and momentum indicators 'firm' on the G-7 comments. A higher open should find Resistance at .8618 and .8633, while an open below .8601 may find Support at .8586 and .8569.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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