Aluminium yesterday traded with the positive node and settled 1.18% up at 115.40 as support seen after the Fed’s decisions in its interest meeting overnight. The Fed announced QE3 in order to maximize employment in a context of price stability and to promote a stronger economic recovery. The Federal Reserve will purchase $40 billion a month in mortgage-backed securities until the outlook for jobs improves and will keep interest rates exceptionally low until at least 2015. In response, the US dollar plunged to near 79. LME aluminum broke through $2,100/mt to a fresh record high of $2,123.89/mt. As positive factors brought by QE3 have been digested some earlier, investors’ enthusiasm will fade, weakening gains of aluminum prices. The introduction of QE3 should lift markets effectively over the near term. The central bank's unconventional debt buying action is directly associated with economic situation, suggesting the Fed's clear change in monetary policy directions. In response, the financial market rose rapidly and the Dow Jones Industrial Average surged 1.55% to the highest since late 2007. In yesterday's trading session aluminium has touched the low of 113.75 after opening at 114, and finally settled at 115.4. For today's session market is looking to take support at 114.2, a break below could see a test of 112.9 and where as resistance is now likely to be seen at 116.3, a move above could see prices testing 117.1.

Trading Ideas:

Aluminium trading range for the day is 112.9-117.1.

Aluminium gains as market focus shifted to the Fed’s decisions in its interest meeting

Fed also announced to keep the super low interest rates until mid-2015.

Aluminium daily stocks at Shanghai exchange came up by 6488 tonnes