Aluminium yesterday traded with the positive node and settled 0.89% up at 106.35 on covering-up of short positions as support seen from the rising spot demand and a firming trend in global markets supported the upside in aluminium. LME aluminum surged as much as 4.36% overnight to USD 1,993/mt, a new high since June 11th, amid strong short covering induced by rapidly increasing expectations on easing policies from both China and Europe. As investors wait for easing policies, their confidence for aluminum is far from strong, and shorts may return if aluminum prices climb higher. LME aluminum is expected to meet resistance at USD 2,000/mt and move between USD 1,945-1,995/mt. Market is attentive to the actions of ECB after signal of stimulating growth were sent from the EU summit. May PPI data released by Eurostat indicate continuous decline in inflation and offered room for ECB to further lower interest rate. Market expects ECB will cut interest rate by 25 basis points. Market expectations drove base metals to rise. In yesterday's trading session aluminium has touched the low of 105.05 after opening at 105.65, and finally settled at 106.35. For today's session market is looking to take support at 105.2, a break below could see a test of 104 and where as resistance is now likely to be seen at 107.5, a move above could see prices testing 108.6.

Trading Ideas:

Aluminium trading range for the day is 103.95-108.55.

Aluminium gains amid strong short covering induced by rapidly increasing expectations on easing policies

As investors wait for easing policies, their confidence for aluminum is far from strong, and shorts may return

Aluminium daily stocks at Shanghai exchange came down by 199 tonnes