Aluminium yesterday traded with the negative node and settled -1.03% down at 111.2 tracking LME aluminum which opened at USD 2,280/mt and hit USD 2,310/mt supported by gains in oil prices during initial trading on Tuesday. The metal dropped and closed down 1.15% at USD 2,248/mt, however, after US home and manufacturing data came out missing expectations and causing more worries towards US economic recovery. European and US investors continued to close euro positions, helping push up US dollar index to above 5-dma. Meanwhile, US economic data released last night was disappointing, showing that US CCI in Jan fell to 61.1, down from the revised 64.8 in Dec and much lower than market expectation of 68.0, which spurred investor concerns over the recovery of US economy and in turn resulted in mixed US stocks. In addition, China will release the mfg PMI for January today. As a result, a large number of investors exited the market after profit-taking, depressing prices, and LME prices accelerated declines at the end of trading. The US dollar index standing steady above 79 has been weighing on aluminum markets. For today's session market is looking to take support at 110, a break below could see a test of 108.9 and where as resistance is now likely to be seen at 112.9, a move above could see prices testing 114.6.

Trading Ideas:

Aluminium trading range is 108.9-114.6.

Aluminium dropped nearly 1% as US economic data released was disappointing.

US home and mfg data came out missing expectations and causing more worries towards US economic recovery.

LME aluminum to struggle at the 10-day moving average and move between USD 2,200-2,270/mt.