Aluminium settled down -1.83% at 118.25 on worries that the US Fed may bring QE3 to an end kept markets cautious. Markit Flash US Manufacturing PMI for August, Dallas Fed Manufacturing Activity and the Conference Board's leading indicators all capped expectations. Initial jobless claims last week were worse than expected, but the average claim over the past four months was still the lowest level since November 2007. US stocks rose as a result, but some longs pulled out of the market amid concerns that these positive data may prompt the US Fed to taper off QE3 in September. HSBC's flash China Manufacturing PMI for August climbed above 50.1, a 4-month high. The flash manufacturing PMI in the euro zone also rose to 51.3, the fastest expansion in two years. US flash manufacturing PMI rose to a 5-month high of 53.9. These data signal sustainable global economic recovery. On the other hand, worries that the US Fed may bring QE3 to an end kept markets cautious. As a result, the US dollar index rose, causing LME aluminum to fall back after hitting high. LME aluminum dropped further to below USD 1,900/mt as longs took profits, and finally ended the day at USD 1,882.3/mt, down USD 19.8/mt or 1.04%. Positions decreased by 8,890 lots to 758,685 lots. LME aluminum inventories were down 8,675 mt to 5,431,600 mt. Technically market is under long liquidation as market has witnessed drop in open interest by -8.82% to settled at 2110 while prices down -2.2 rupee, now Aluminium is getting support at 116.7 and below same could see a test of 115 level, And resistance is now likely to be seen at 121.3, a move above could see prices testing 124.2.

Trading Ideas:

Aluminium trading range for the day is 115-124.2.

Aluminium ended with losses on worries that the US Fed may bring QE3 to an end kept markets cautious.

Euro zone business activity across has picked up this month at a faster pace than expected, led by Germany

Aluminium daily stocks at Shanghai exchange came down by 2019 tonnes