Aluminium yesterday traded with the positive node and settled 0.29% up at 102.6 supported by better-than-expected 2Q GDP of Germany and France but prices came under renewed pressure after a jump in exchange stocks and on waning hopes that producers, particularly in China, will make much-needed output cuts to remove some of excess in supply that has hurt prices. As inventories surged 29,000 mt and longs stayed cautious toward entering market, LME aluminum met strong resistance at the 10-day moving average and later pared early gains. The US July PPI and retail sales data released later in the day were quite inspiring, easing market risk aversion, but weakened possibility of QE3 by the US on the other hand. In response, the US dollar index rose, limiting upward momentum of aluminum. LME aluminum only touched a high of USD 1,864/mt before slipping to an intraday low of USD 1,847.3/mt at the tail of trading. Finally, LME aluminum gained USD 2.5/mt or 0.13% to close at USD 1,859/mt. Latest LME aluminum inventories were up 29,000 mt to 4,896,725 mt. Meanwhile, the brief upturn of US economy will lower investor’s expectation on introduction of stimulus measures by the Fed, which may push up the US dollar index and weigh on prices. In yesterday's trading session aluminium has touched the low of 102.2 after opening at 102.3, and finally settled at 102.6. For today's session market is looking to take support at 102.3, a break below could see a test of 101.9 and where as resistance is now likely to be seen at 102.9, a move above could see prices testing 103.2.
Trading Ideas:
Aluminium trading range for the day is 101.9-103.2.
Aluminium ended with gains supported by better-than-expected 2Q GDP of Germany and France
Prices came under pressure after jump in LME stocks and on waning hopes that producers will make output cuts
US July PPI and retail sales data released were quite inspiring, easing market risk aversion
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