Alaron Currency Comment

CHICAGO - Feb 9/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Euro Currency (ECH7):

The EC opened lower at our initial Support level of 1.3010 after the ECB decision to leave rates 'unchanged' at 3.50%. Traders awaited comments from ECB President Trichet to see if they would reflect a 'hawkish' or 'dovish' tone. 'Strong Vigilence' was enough to push prices to a morning Hi of 1.3063 as further rate increases have been preceded by this 'hawkish' phrase. Prices drifted to 1.3050 as we enter the afternoon session and rose towards the close to end the session at 1.3061, up 31 tics. The s/t trend remains 'positive' w/ 'firm' momentum indicators. Perception of higher rates could attract more buyers after the statement from the G-7 conference. A higher open should find Resistance at 1.3079 and 1.3098, while an open below 1.3045 may find Support at 1.3026 and 1.2992.

Dollar Index (DXH7):

The DX opened higher at 84.86, hit a morning Hi of 84.87 and retraced to a morning Lo of 84.57, before bouncing to 84.59 as we head into the afternoon session. With the Fed on 'hold' and traders looking for a rate 'cut' by Q4, traders rotated out of DX and into the EC. Pressure from this weekend's G-7 meeting may have traders taking profit/risk off the table if the JY would spike higher. Traders continued to sell the DX, sending prices to a daily Lo of 84.54, down 7 tics. The s/t trend remains 'negative', w/ weaker momentum indicators. A weak economic reporting day shows speeches by two Fed members, which could alter trading, but the emphasis will be on 'comments' from the G-7 conference. A lower open may find Support at 84.39 and 84.23, while an open above 84.64 should find Resistance at 84.80 and 85.05.

Canadian Dollar (CDH7):

The CD opened lower at our initial Support level of .8438 and slid to a morning Lo at our secondary Support level of .8427, before a better than expected increase in Housing Starts, up 17% in Jan., helped send the CD to a mid-day Hi at our initial Resistance level of .8459. Prices rose into the close to end the day at .8466, up 20 tics. Supportive energy prices helped the CD off the 'new' intraday Low as traders will look for help from an 'employment' report to 'stop the bleeding'. A higher open should find Resistance at .8480 and .8495, while an open below .8454 may find Support at .8439 and .8413.

British Pound (BPH7):

The BP opened lower at 1.9576 after the BoE left rates 'unchanged' at 5.25%, disappointing traders hoping for another 'surprise' increase. Prices jumped to a morning Hi of 1.9605, before retracing to a morning Lo of 1.9543, as the EC gained strength. The BP bounced higher towards the close to end the session at 1.9578, down 112 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ weaker momentum indicators. With 'weak' longs out of the way, we will look at the swing Lo of 1.9479 as Target Support and look to add to longs on breaks with a 'stop' at 1.9469. A higher open should find Resistance at 1.9608 and 1.9637, while an open below 1.9575 may find Support at 1.9546 and 1.9513.

Japanese Yen (JYH7):

The JY opened lower at .8280 ahead of the start of the G-7 conference in Germany. Pressure from a stronger EC and lack of impetus to raise rates weighed on prices. The JY bounced off the morning Lo of .8277 to a mid-day Hi of .8303, before drifting sidways and ending the session at .8303, down 30 tics. The close below the 9-day MA changes the s/t trend to 'negative' with weaker momentum indicators. Traders could adjust positions ahead of 'comments' that could cause volatility. Spec's could 'bottom fish', hoping for a 'short-covering' rally. A higher open should find Resistance at .8313 and .8323, while an open below .8295 may find Support at .8285 and .8267.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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