Alaron Currency Comment

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

U.S. DOLLAR INDEX (DXU6):

The DX opened lower at 85.21 and rose to a morning Hi of 85.49 on better than expected economic reports on Jobless Claims, down 20,000 and a reduction in the Trade Deficit of $ 4.66B. Prices retraced to a morning Lo of 84.90, as comments from China's central bank Governor Xiaochuan stated that the BoC has a plan to diversify its $ 1 Trillion foreign currency reserves. Although this has been on the table for some time, traders took it as an opportunity to take further profit/risk off the table and rotate into other major foreign currencies. As we begin the afternoon session, the DX is trading at 85.00. The DX managed to close the session at 85.03, down 21 tics. The s/t trend remains 'negative' with weak momentum indicators. Another close below the Target Support level of 85.08 may trigger further selling as 'diversification' talk has traders taking risk/profit off the table. A lower open may find Support at 84.79 and 84.55, while an open above 85.14 should find Resistance at 85.38 and 85.73.

CANADIAN DOLLAR (CDZ6):

The CD opened lower at .8836 and slid to a morning Lo of .8832, before rebounding to a morning Hi of .8873 on a weaker DX and higher energy/metals prices. Prices drifted to .8866 as we begin the afternoon session. The CD could only add 3 tics to close at .8869. Weak. Needs help from higher energy prices. A higher open should find Resistance at .8884 and .8899, while an open below .8858 may find Support at .8843 and .8817.

BRITISH POUND (BPZ6):

The BP opened lower at our initial Support level of 1.9025 and retraced to a morning Lo of 1.8980 after 'dovish' comments from MPC officials stating that only 'one' more rate increase may be needed to 'cool' the housing market and wage pressures, if energy prices and inflationary pressures subside. As the DX retraced on comments from Bank of China official Xiaochuan about their plans to diversify the

$1Trillion foreign reserve, the BP rebounded to a morning Hi of 1.9092, before sliding to 1.9071 as we begin afternoon trading. Prices drifted lower towards the close to end the session at 1.9059, down 4 tics. The s/t trend remains 'positive' with momentum indicators 'firm'. Will only one more rate increase have traders taking profit/risk off the table? The market may consolidate before gaining strength on DX weakness. A higher open should find Resistance at 1.9107 and 1.9156, while an open below 1.9044 may find Support at 1.8995 and 1.8932.

Euro Currency (ECZ6):

The EC opened higher at our secondary Resistance level of 1.2821 and rose to 1.2825, before favorable economic U.S. reports sent the EC to a morning Lo at our initial Support level of 1.2777. As the DX sold-off on Bank of China Governor Xiaochuan renewed comments about diversifing the $ 1Trillion in foreign reserves, traders bid the EC to a morning Hi of 1.2871, before sliding to 1.2852 as we begin the afternoon session..

. JAPANESE YEN (JYZ6):

The JY opened lower at our secondary Support level of .8507 and followed most other major foreign currencies lower, hitting a morning Lo of .8472, before rebounding on the comments from Bank of China officials about diversifing their $ 1 Trillion foreign reserve portfolio. Prices rose to a morning Hi of .8530 and slid to .8521 as we begin the afternoon session.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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