Aluminium on MCX settled up 0.28% at 124.30 settled flat up as support seen with investors exercising caution ahead of a slew of Chinese economic data and U.S. President-elect Donald Trump's inauguration. While LME aluminium fell by nearly 1 percent to $1,816.50 a tonne after reaching its highest since May 2015 overnight. Ahead of Trump's inauguration, Federal Reserve Chair Janet Yellen said the U.S. central bank should continue to raise interest rates slowly to keep jobs plentiful and inflation low, with monetary policy still modestly accommodative. While Aluminium prices had rallied sharply in last 1month period but now seems to be capped as sentiments can change as Alcoa said it has reached a deal with Australia's government to restart lost production at its Portland aluminum smelter. The smelter has been running at only a third of its 300,000-tonnes-per-year capacity since a statewide blackout in December. After years of excess supply the global aluminium market may be turning a corner, as China seeks to cut capacity and the incoming Donald Trump administration ratchets up trade threats against the world’s largest producer of the lightweight metal. A glut of aluminium in recent years has decimated the US aluminium industry, where smelters were forced to shut down as Chinese imports rose. Now, after tackling excess capacity in coal and steel in 2016, there are signs Chinese authorities are turning their focus to aluminium, according to official and media reports. Now technically market is getting support at 123.8 and below same could see a test of 123.2 level, And resistance is now likely to be seen at 124.9, a move above could see prices testing 125.4.

Trading Ideas:

Aluminium trading range for the day is 123.2-125.4.

Aluminium prices consolidate in yesterday's session as the dollar recovered and investors are uncertain about price direction.

Market participants to the sidelines on uncertainty is US President-elect Donald Trump’s inauguration on Friday and the impending Chinese New Year

Alcoa said it has reached a deal with Australia's government to restart lost production at its Portland aluminum smelter.