Alaron Currency Comment

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

Japanese Yen: (JYH7):

The EC opened higher at 1.3227, after remarks by ECB council member Klaus Liebscher suggested rates would increase further. Prices retraced to a morning Lo of 1.3198, then rose to a morning Hi at our secondary Resistance level of 1.3245 as we approach the afternoon session. Prices drifted lower towards the close and ended the day at 1.3239, up 73 tics. The close above the 9-day MA changes the s/t trend to 'positive' while momentum indicators improve. A recent forecast for increased strength in the German economy helped support the rally. A higher open should find Resistance at 1.3261 and 1.3284, while an open below 1.3230 may find Support at 1.3207 and 1.3176.

Dollar Index (DXM7):

The DX opened lower at 83.54 as concerns about 'sub-prime' lender New Century Financial Corp. increased 'risk' awareness, prompting 'carry-traders' to cover positions and rotate out of the DX. Prices rose to a morning Hi at our initial Support level of 83.69, before sliding to a morning Lo of 83.50 as we head into the afternoon session. Prices tried unsuccessfully to recover, before sliding to a daily Lo of 83.47 and closing the session at 83.55, down 36 tics. The close 'at' the 9-day MA of 83.55 maintains a 'positive' s/t trend, but weaker momentum indicators suggest lower prices likely. A lower open may find Support at 83.36 and 83.18, while an open above 83.66 should find Resistance at 83.84 and 84.14.

Canadian Dollar (CDM7):

The CD opened higher at .8567 on DX weakness and a more optimistic outlook after last weeks 'jobs' report. Prices slid to a morning Lo of .8555, before rising to a morning Hi of .8584. Lower energy prices may contain the gain as a warmer forecast will offset gains. Prices retraced towards the close and ended the session at .8566, up 10 tics. With a 'rate-cut' fear taken off the table, traders 'covered' short positions, but lack of follow-thru buying suggests further selling is possible. A lower open may find Support at .8553 and .8539, while an open above .8568 should find Resistance at .8582 and .8597.

Japanese Yen (JYM7):

The JY opened higher at .8604 as carry-traders reduced exposure to increased risks and 'covered' positions, after a U.S. 'sub-prime' lender, New Century Financial Corp., said it lacks cash to pay lenders. Prices rose to a morning Hi of .8638, before retracing to a morning Lo of .8602 as we begin the afternoon session.The JY fell to a daily Low of .8598, before bouncing towards the close to end the day at .8609, up 37 tics. The s/t trend remains 'negative' with 'neutral' momentum indicators. A slower U.S. economy could effect the exporters and reduce the need for upward pressure on rates. Traders will look at this weeks economic data and watch for any further developments from 'sub-prime' lenders that could lead to further short-covering. A lower open may find Support at .8592 and .8575, while an open above .8615 should find Resistance at .8632 and .8655.

British Pound (BPM7):

The BP opened higher at 1.9372 and continued the 'sell-off' from the 'globex' Hi of 1.9428, brought about by comments from ECB council member Klaus Liebscher, stating that inflation worries merit further rate increases. A recent increase in growth of the German economy from a 2.1% in Dec. to 2.8% today added to the gains, closing the yield gap with the BP. Prices retraced to a daily Lo of 1.9240, before rebounding towards the close to end the session at 1.9312, up 2 tics. The s/t trend remains 'negative' with weak momentum indicators. Produced prices rose 0.3% in Feb., more than expected 0.2%. Will the BoE 'tweak' rates another 25bps? Watch housing prices for a key. A higher open should find Resistance at 1.9376 and 1.9440, while an open below 1.9308 may find Support at 1.9244 and 1.9176.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak@alaron.com

www.alaron.com

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