Aluminium on MCX settled up 0.91% at 127.25 rallied on fresh high tracking firmness from LME aluminium which climbed high as $1,873, the highest since May 2015, held close to 20-month highs buoyed by reports of possible capacity cuts in China. Support seen as China is drawing up plans that would halt about 3.3 million tonnes of operational aluminium capacity during the winter to combat air pollution. Also China's top environment watchdog delivered verbal warnings last month to Chalco, the nation's top aluminium producer, for failing to deal with pollution appropriately, state news agency Xinhua had reported. Overall basemetal complex was trading in the range in earlier session as prices is the Lunar New Year holiday, starting Jan. 27, which is expected to subdue metals demand this month as Chinese factories close, sometimes for two to three weeks, while yesterday gain's seen after dollar dropped below 100 level mark amid concerns of U. S. protectionism under the newly-formed administration of President Donald Trump. Trump formally withdrew the United States from the Trans-Pacific Partnership on Monday, saying he would seek one-on-one trade deals with countries that would allow Washington to quickly terminate them "if somebody misbehaves". The dollar wallowed near seven-week lows in Asian trade, pressured by concerns about the impact of U. S President Donald Trump's protectionist trade stance. Trump's nominee for Treasury Secretary Steven Mnuchin was quoted by Bloomberg as saying that an excessively strong dollar was negative in the short term, which put additional pressure on the currency. Technically now Aluminium is getting support at 125.6 and below same could see a test of 123.8 level, And resistance is now likely to be seen at 128.7, a move above could see prices testing 130.

Trading Ideas:

# Aluminium trading range for the day is 123.8-130.

# Aluminium prices continued its firm trend after reports of potential capacity cuts in China.

# China is drawing up plans that would halt about 3.3 million tonnes of operational aluminium capacity during the winter.

# China's top environment watchdog delivered verbal warnings last month to Chalco, for failing to deal with pollution appropriately.