Zinc yesterday traded with the negative node and settled -0.44% down at 100.9 as successful German and Portuguese treasury bill auctions eased concerns over European financial pressure.
In this context, the euro rose against the US dollar. LME Zinc prices overnight surged to breakthrough the USD 2,000/mt level, touching USD 2,025 /mt, and with prices finally closing at USD 2,009/mt, up USD 18.8/mt. Yields of Portugal’s government bond rose to record high of 14.54% on Wednesday.
In addition, the Fitch may cut Italy’s sovereign credit rating by two notches and Germany also cut economic growth expectation for 2012, weighing on market sentiment.
News from the US reported that the negotiation between Greece and its private debtors may reach an agreement before this week, and the Greek officials later expressed that agreement may be reached before this week, boosting optimism towards Greek debt negotiation.
In response, the euro advanced and LME base metal prices largely closed with gains, which boosted Shanghai base metal prices as well. Market is focusing the Greek debt negotiation.
It is expected that the European debt crisis will be eased to certain extent if agreement is reached on debt swap.
Otherwise, Greek will face debt default risk. In yesterday's trading session Zinc has touched the low of 100.55 after opening at 101, and finally settled at 100.9.
For today's session market is looking to take support at 100.3, a break below could see a test of 99.7 and where as resistance is now likely to be seen at 101.8, a move above could see prices testing 102.7.
Trading Ideas:
Zinc trading range is 99.7-102.7.
Zinc can get support from successful German and Portuguese treasury bill auctions eased concerns over Euro financial pressure.
Support seen on news that the IMF was seeking to raise funds to tackle the euro zone debt crisis tempered worries over European funding.
European debt crisis will be eased to certain extent if agreement is reached on debt swap otherwise, Greek will face debt default risk.
Courtesy: Kedia Commodities
Looking for Agri Research? Visit research.commodityonline.com
