Aluminium yesterday traded with the negative node and settled -0.36% down at 109.9 as LME aluminum settled USD 4.8/mt or 0.22% higher at 2,194.8/mt on Tuesday, as investors confidence cooled following a rebound of the US dollar index to above 79 and as US consumer confidence index came out almost in line with expectation. Profit-taking by shorts still was the major driver of higher prices. LME aluminum look to test resistance at USD 2,200/mt and move between USD 2,170-2,215/mt during today’s trading. We have seen some support after Fed chief Bernanke said that “continued accommodative policies” are needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement. Markets interpreted the comments as an indication the central bank will maintain its ultra-loose monetary policy and reinforced the view that further easing from the central bank may be possible. The possibility of further easing weighed heavily on the U.S. dollar, which traded at a four-week low against the euro and the Swiss franc and a five-month low against the pound. In yesterday's trading session aluminium has touched the low of 109 after opening at 110.3, and finally settled at 109.9. For today's session market is looking to take support at 109.2, a break below could see a test of 108.4 and where as resistance is now likely to be seen at 110.5, a move above could see prices testing 111.1.

Trading Ideas:

Aluminium trading range for the day is 108.4-111.1.

Aluminium dropped as market see a hefty supply surplus, cumulatively in excess of 8.5 million tonnes.

China is likely to keep giving tax rebates to exporters of aluminium products this year to encourage the exports.

Chinese producers would raise spot exports if London Metal Exchange aluminium prices rose above $2,300.