Aluminium yesterday traded with the positive node and settled 0.09% up at 110 tracking LME aluminum for three-month delivery dropped to an intraday low of USD 2,116/mt last Friday after Standard & Poor’s downgraded 9 euro zone countries. Better than expected Michigan University Index and leading indicators from the US came later and helped the metal narrowing loss to USD 19.3/mt or 0.89% closing at USD 2,141.3/mt. As the euro zone debt crisis worsens, LME aluminum to give away more gains in last week to test support at the 30-day moving average. The moving band should be USD 2,100-2,150/mt. It was announced on January 13th that Standard & Poor’s would cut credit rating of some European countries, fueling risk aversion sentiment and weighing down non-US dollar currencies. In response, the US dollar advanced significantly on risk aversion buying. Deposits at European central banks recorded a new high of EUR 489.9 billion last Thursday, stoking market concern over support for real economy. In addition, auction of Italy’s government bond was moderate, making investors cautious over the European debt crisis. In yesterday's trading session aluminium has touched the low of 109.9 after opening at 109.9, and finally settled at 110. For today's session market is looking to take support at 109.9, a break below could see a test of 109.8 and where as resistance is now likely to be seen at 110.1, a move above could see prices testing 110.1.

Trading Ideas:

Aluminium trading range is 109.8-110.1.

Aluminum dropped last Friday after Standard & Poor’s downgraded 9 euro zone countries.

Better than expected Michigan University Index and leading indicators from the US came later and helped the metal.

Light stock replenishment demand at lower prices is expected at large downstream businesses.