Alaron Currency Comment

CHICAGO - Oct 6/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

U.S. DOLLAR INDEX (DXU6):

The DX opened lower at 85.53 as traders await statements from the ECB and BoE rate decisions. With another Fed member being worried about 'persistant' inflation, the DX rose to a morning Hi at our initial Resistance level of 85.75, before retracing to our Pivot level of 85.63 as we begin the afternoon session. With the ECB raising the expected 25bp, traders were looking for more 'hawkish' comments from Trichet. The BoE left rates 'unchanged', disappointing traders looking for the rate increase. Prices traded in a narrow range towards the close and ended the day at 85.66, up 10 tics. The s/t trend remains 'positive' and momentum indicators are moving 'higher' going into Friday's Payroll Report. Less than 100,000 new jobs should weigh on prices. A higher open should find Resistance at 85.79 and 85.91, while an open below 85.62 may find Support at 85.50 and 85.33.

CANADIAN DOLLAR (CDZ6):

The CD opened lower at .8895 and retraced to a morning Lo at our initial Support level of .8877, before a rebound in the energy/metals complex helped push prices to a morning Hi of .8897 as we begin the afternoon session. Prices rose to and closed at a daily Hi of .8903, up 7 tics. The s/t trend remains 'negative' as momentum indicators look to recover from 'over-sold' areas. A weaker DX and higher metals/energy prices will be needed. A higher open should find Resistance at .8912 and .8920, while an open below .8894 may find Support at .8886 and .8868.

BRITISH POUND (BPZ6):

The BP opened weaker at 1.8832 as disappointed traders looking for the 25pb rate increase took further profit/risk off the table, sending prices to a morning Lo of 1.8762, before bouncing to 1.8784 as we begin the afternoon session. Prices managed to recover during the afternoon, climbing to a close of 1.8802, down 71 tics. The s/t trend remains 'negative' as momentum indicators turn lower, suggesting further correction. The U.S. Payroll report will be focus for traders looking to add/reduce positions. The 'hoped-for' proposed rate increase could still come as soon as next month, but will traders hang tough until the next MPC meeting? A higher open should find Resistance at 1.8835 and 1.8869, while an open below 1.8799 may find Support at 1.8765 and 1.8729.

EURO-CURRENCY (ECZ6):

The EC opened higher at 1.2768 on the anticipated 25bp rate increase to 3.25% by the ECB and rose to a morning Hi at the initial Resistance level of 1.2770, before a less 'hawkish' statement by ECB President Trichet sent the EC to a morning Lo of 1.2719. Prices bounced off the low towards the close and ended the day at 1.2740, down 22 tics. The s/t trend remains 'negative' as momentum indicators continue south, suggesting further weakness. A lower open may find Support at 1.2716 and 1.2692, while an open above 1.2743 should find Resistance at 1.2767 and 1.2794.

. JAPANESE YEN (JYZ6):

The JY opened higher at .8593 after 'bullish' comments from Deputy Finance Minister Toshiro Muto, suggesting that the BoJ could raise rates before December. The JY rose to a morning Hi at our Weekly Pivot level of .8598, before retracing to our initial Resistance level of .8574. Prices rebounded to .8585 as we begin the afternoon session. Prices drifted lower during the afternoon and ended the session at .8579, up 13 tics. The s/t trend remains 'negative' with momentum indicators firming, suggesting another attempt to move off the recent low. A lower open may find Support at .8569 and .8560, while an open above .8584 should find Resistance at .8593 and .8608.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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