MCX Zinc under short covering; Resistance seen at 187.1
Commodity Online | August 13 2019
UPDATED 09:50:31 IST

MCX Mentha Oil likely to move in a range of 1317.3-1341.9

MCX Aluminium may trade between 138.9-140.5 levels

MCX Nickel under long liquidation; Support seen at 1112.7

MCX Zinc under short covering; Resistance seen at 187

MCX Copper under short covering; Resistance seen at 447.4

Technically Zinc market is under short covering as market has witnessed drop in open interest by 21.82% to settled at 3272 while prices up 3.35 rupees.

Now MCX Zinc is getting support at 183 and below same could see a test of 180.6 levels, and resistance is now likely to be seen at 187.1, a move above could see prices testing 188.8. 

Zinc on MCX settled up 1.84% at 185.25 on short covering and in absence of a substantial increase in social inventories. Strong Chinese export data suggested that demand in the world's largest metals consumer might hold up better than expected.

China's exports unexpectedly returned to growth in July on improved global demand despite escalating U.S. trade pressure, but the rebound may be short-lived as Washington prepares to slap even more tariffs on Chinese goods.

The better-than-expected trade readings helped buoy Asian stock markets, which suffered a heavy selloff earlier in the week as the Sino-U.S. trade war intensified and the yuan skidded to 11-year lows. China's exporters and their U.S. customers have been whipsawed in recent months by trade uncertainties, with the fallout rippling through global suppliers from Germany to Singapore.

The United States raised tariffs on a large number of Chinese goods in May, after trade negotiations broke down, and Beijing retaliated. Pressured by weak demand at home and abroad, China's economic growth cooled to a near 30-year low of 6.2% in the second quarter.

Other major data over the coming week is expected to show a loss of momentum in July, reinforcing views that Beijing will need to roll out more support measures. The U.S. dollar's dominance will come to an end if the Federal Reserve gives in to pressure from financial markets and President Donald Trump and chops interest rates another 50 basis points this year.

Trading Ideas:
--Zinc trading range for the day is 180.6-188.8.
--Zinc gained on short covering and in absence of a substantial increase in social inventories.
--China's exports unexpectedly returned to growth in July on improved global demand despite escalating U.S. trade pressure.
--Pressured by weak demand at home and abroad, China's economic growth cooled to a near 30-year low of 6.2% in the second quarter.

Courtesy: Kedia Commodities

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