Alaron Currency Comment

CHICAGO - Feb 12/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Japanese Yen: (JYH7):

The JY opened lower at our secondary Support level of .8241, during a Holiday session in Japan. Prices rebounded to a morning Hi at our Pivot level of .8265, as comments out of this weekend's G-7 conference 'cautioning traders to be aware of making one-way bets', may lead to a short-covering rally. The JY traded lower heading into the afternoon session against a stronger DX. Although no 'official' reprimands about Japan's currency came forth, European officials continue to look for alternatives to pushing the BoJ for rate increases. Could there by a hint of 'intervention' in the air on behalf of other Central Banks? Is that why the G-7 may be giving 'ample warning' to carry-traders to watch their assets? Prices ended the quiet Holiday session at .8244, down 17 tics. The s/t trend remains 'negative' with weak momentum indicators. Shorts should tighten 'stops' or purchase a 'put' to reduce volatility. A lower open may find Support at .8235 and .8226, while an open above .8250 should find Resistance at .8259 and .8274.

Dollar Index (DXH7):

The DX opened higher at 84.99 as traders continue to hear the 'inflation drum beating' by Fed officials ahead of Fed Chrm. Bernanke's testimony on the Hill this week. Some flight to 'safety' over further involvement in Iran may be weighing on prices as the DX continues to trade in a 100 tic range. Prices rose to a morning Hi of 85.04, before retracing to a morning Lo of 84.61 and rebounding to a close of 85.00, up 25 tics. With a full economic calendar this week and Fed Chrm.Bernanke's testimony, expect a volatile trading week. The s/t trend remains 'positive' with firm momentum indicators. A higher open should find Resistance at 85.19 and 85.38, while an open below 84.90 may find Support at 84.71 and 84.42.

Canadian Dollar (CDH7):

The CD opened higher at .8548, hit a daily Hi of .8551 and retraced to a morning Lo of .8511 as weaker energy prices pressured prices lower. Prices continued to weaken along with energy prices, hitting a daily Lo of .8510, before closing at .8513, down 31 tics. The s/t trend remains 'positive' with weaker momentum indicators. Although sellers may decide to take profit/risk off the top, lack of fresh buyers could look to sell the rallies. Energy prices need to move higher to help the economy, otherwise we could traverse in a bottom channel for awhile. A lower open may find Support at .8498 and .8484, while an open above .8525 should find Resistance at .8539 and .8566.

British Pound (BPH7):

The BP opened lower at 1.9465 and retraced to a morning Lo of 1.9442 against a stronger DX. Prices rebounded to a morning Hi of 1.9492, before reversing to 1.9468 in mid-day trading. Prices traded within a thin range and ended the session at 1.9469, down 33 tics.The s/t trend remains 'negative' with weaker momentum indicators. Traders will look for help in the release of a stronger CPI and higher Housing Prices, which could strengthen the need of a rate increase and higher prices. A higher open should find Resistance at 1.9493 and 1.9518, while an open below 1.9468 may find Support at 1.9443 and 1.9418.

Euro Currency (ECH7):

The EC opened lower at 1.2980 and slid to a morning Lo of 1.2976 against a stronger DX. Prices rebounded to a morning Hi at our secondary Support level of 1.2990 and continued to find lack of buyers at that level. Prices retraced towards the close and ended the session at 1.2982, down 45 tics. The close below the 9-day MA changes the s/t trend to 'negative' with weaker momentum indicators. Traders will look for help from Tuesday's GDP and ZEW to pressure rates and prices. A higher open should find Resistance at 1.2990 and 1.2998, while an open below 1.2982 may find Support at 1.2974 and 1.2966.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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