Aluminium settled down -2.66% at 120.65 as the dollar rose against a basket of currencies, but was underpinned by steady Chinese demand and the prospect of a slow revival in global growth. Pressure seen as contracts to purchase previously owned U. S. homes fell for a second straight month in July, a sign that rising mortgage rates are taking the steam out of America's housing market recovery. While pressure seen after United Co. Rusal, the world's largest aluminum producer, reported a second-quarter loss and said it will further reduce production this year. Rusal posted a net loss of $458 million in the three months ended June 30, compared with net income of $19 million in the first quarter, the Moscow-based company said today in a statement to the Hong Kong exchange. Also Global aluminum producers including Rusal and Alcoa Inc. (AA) have announced output curbs as a glut in capacity weighed on prices of the lightweight metal. Rusal today said it will target cutting its production by 357,000 metric tons in 2013, up from a March estimate of 300,000 tons. Prices rallied in the morning session on MCX as Rupee decreased to a record low, falling 3.6% in one session, slipping 2.9% in the last trading session, and posting the biggest decline since 1991. Technically market is under long liquidation as market has witnessed drop in open interest by -40.42% to settled at 1020 while prices down -3.3 rupee, now Aluminium is getting support at 117 and below same could see a test of 113.4 level, And resistance is now likely to be seen at 127.1, a move above could see prices testing 133.6.

Trading Ideas:

Aluminium trading range for the day is 113.4-133.6.

Aluminium dropped as risk aversion sentiment resulting from Syria crisis will exert downward pressure on prices

Technically market is under long liquidation as market has witnessed drop in open interest by -40.42% to settled at 1020

Aluminium daily stocks at Shanghai exchange came down by 1366 tonnes