Alaron Currency Comment

CHICAGO - Sep 18/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

U.S. DOLLAR INDEX (DXU6):

The DX opened higher at 85.70 after Treasury Sec.Paulson reinerated the need for a 'stronger Dollar' at the G-7 conference. Prices rose to a morning Hi of 85.72 , before pressure from a short-covering rally in the EC sent the DX to a morning Lo of 85.50. The DX bounced to 85.60 as we begin the afternoon session. Prices retraced towards the close, hitting a daily Lo of 85.43, as traders take further profit/risk off the table ahead of the weak housing data. The s/t trend remains 'positive', with momentum indicators suggesting lower prices ahead. A lower open may find Support at 85.35 and 85.23, while an open above 85.56 should find Resistance at .85.68 and 85.89.

CANADIAN DOLLAR (CDZ6):

The CD opened lower at our initial Support level of .8939 and slid to a morning Lo of .8936, before climbing to a morning Hi at our initial Resistance level of .8984, as the DX retraced and the energy/metals complex moved higher. Prices drifted to .8974 as we approach the afternoon session. The CD continued to lose ground towards the close and ended the session at .8969, up 8 tics. With energy/metals prices providing a 'positive' influence, the CD was had trouble capitalizing on the move. With the BoC on 'hold', higher rates may be attracting more attention. The s/t trend remains 'negative' with weak momentum indicators, suggesting further consolidation. A higher open should find Resistance at .8990 and .9011, while an open below .8963 may find Support at . 8942 and .8915.

BRITISH POUND (BPZ6):

The BP opened lower at 1.8787 and slid to a morning Lo at our initial Support level of 1.8764, before climbing to a morning Hi at our Pivot level of 1.8715 as we enter the afternoon session. As the DX continued to fade, the BP rose to a daily Hi of 1.8828, before ending the day at 1.8826, up 22 tics. The prospect of a rate increase continues to attract buyers after the recent retracement. The s/t trend remains 'positive' with momentum indicators suggesting consolidation ahead of the FOMC meeting Wednesday. A higher open should find Resistance at 1.8848 and 1.8870, while an open below 1.8806 may find Support at 1.8784 and 1.8742.

EURO-CURRENCY (ECZ6):

The EC opened higher at our Pivot level of 1.2730 and slid to a morning Lo of 1.2734, before rebounding to a morning Hi at our initial Resistance level of 1.2758 after further 'promises' by the ECB to be 'vigilant' about containing inflation, suggesting higher rates are coming. Prices slid to 1.2734 as we begin the afternoon session. As the DX continued to fade, traders pushed the EC to a daily Hi of 1.2770, before ending the day at 1.2765, up 40 tics. The s/t trend remains 'negative', as momentum indicators are beginning to recover, suggesting higher prices. A higher open should find Resistance at 1.2782 and 1.2799, while an open below 1.2753 may find Support at 1.2736 and 1.2707.

JAPANESE YEN (JYZ6):

The JY opened lower at our initial Support level of .8578 as non-supportive comments from the G-7 summit and soft-talk about further rate increases from the BoJ sent prices to a morning Lo of .8560. The JY rebounded to a morning Hi of .8590, before sliding to .8580 as we head into the afternoon session. Prices recovered during the afternoon and rose to a daily Hi of .8590, before ending the day at .8588, down 18 tics. The 'negative' trend continues as traders fade the rallies, posting a new contract low. The JY is will need help from a lower DX and signs of a recovery to replace the lack of further 'rate' increases. A higher open should find Resistance at .8599 and .8609, while an open below .8579 may find Support at .8569 and .8549.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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