Aluminium yesterday traded with the positive node and settled 1.43% up at 108.45 and headed for its first week of gains, snapping four weeks of declines,as the European Central Bank's moves to support ailing banks reduced the threat of the euro zone financial crisis spreading. Aluminium demand has been very strong over recent months, particularly in China. Indian demand growth has slowed and may suffer as the impact of tight monetary policy becomes clearer. Production growth in West Asia slowed but was at 19 per cent in the year till July, as the impact of new capacity additions faded. High-cost producers in China are likely to cut production if prices decline and that will help prevent deeper falls. But the ongoing sovereign crisis in the euro zone, the US debt downgrade and worries about global growth caused a sharp pullback in global equities. Concerns that governments may be running out of tools to keep the global economic slowdown from worsening has left equities from Brazil to Hong Kong and Frankfurt in bear markets. In yesterday's trading session aluminium has touched the low of 106.9 after opening at 107.35, and finally settled at 108.45. For today's session market is looking to take support at 107.2, a break below could see a test of 105.9 and where as resistance is now likely to be seen at 109.5, a move above could see prices testing 110.5.

Trading Ideas:

Aluminium trading range is 105.9-110.5.

Aluminium settled up as the ECB's moves to support ailing banks reduced the threat.

Aluminium demand has been very strong over recent months, particularly in China.

High-cost producers in China likely to cut production if prices decline and that will help prevent deeper falls.