Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by 1.05% to settled at 3202 while prices down 1.3 rupees.
Now MCX Aluminium is getting support at 141.1 and below same could see a test of 140.1 levels and resistance is now likely to be seen at 143.3, a move above could see prices testing 144.5.
Aluminium on MCX settled down 0.91% at 141.95 have been hit hard by escalating trade wars and the perceived risks to global growth and demand.
Metals fell the most among commodities, with nickel, tin and aluminium dropping to multi-month lows as China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on $200 billion of Chinese goods.
As shorts significantly added their positions, the SHFE contract slumped to a low of 13,865 yuan/mt before it recovered some losses.Aluminium was less vulnerable than other nonferrous metals as supplies of bauxite were tight and as alumina prices rebounded on production cuts. Longs entered the market at low prices.
The nonferrous complex is likely to recover some losses tonight if there are no significant economic and political developments. Last night the US dollar index gained 0.66% to close at 94.72 as its inflation data came in stronger than expected.
Market anxiety continued to ramp up after the Trump administration started the process of imposing tariffs on a further $200 billion of imports from China. A day ahead traders will watch the US consumer price index (CPI) in June and its weekly initial claims for unemployment benefits are the key factors to watch today.
--Aluminium trading range for the day is 140.1-144.5.
--Aluminium remained under pressure from fears of an escalation in the U.S.-China trade war.
--Aluminium buyers in south China were keen to purchase at low prices in the falling market
--China's inventory of primary aluminium across eight major markets, including SHFE warrants, fell 6,000 mt over the weekend.
Courtesy: Kedia Commodities