Aluminium yesterday traded with the positive node and settled 0.09% up at 109.8 as the US May Michigan Consumer Confidence climbed to a new high since October 2007, beating expectations. However, debt woes of Greece and Spain continued to weigh on market. LME aluminum hit a high of USD 2,030/mt and fell back to settle up only USD 4/mt or 0.2% at USD 2,014/mt. Strong pressure was felt at the 10-day moving average while strong support showed at USD 2,000/mt. Positions increased slightly by 412 lots. Latest LME aluminum stocks dropped 12,425 mt to 4,943,900 mt. Though European debt worries will not easily fade, improving consumer confidence in Europe and the US will boost commodities. LME aluminum is expected to struggle at the 5-day moving average and hover between USD 2,010-2,030/mt. University of Michigan's May CCI was 79.3, the highest since October 2007, higher than the forecast of 77.8, compared to 76.4 in April. European news continued to dominate the market, most of which was negative. Catalonia asked for financing support from the government, making the situation of debt-ridden Spain even worse. Risk appetite plummeted due to concerns over Greece and Spain's banking sector, causing base metal prices to drop sharply after hitting a 20-month high. For today's session market is looking to take support at 109.7, a break below could see a test of 109.5 and where as resistance is now likely to be seen at 109.9, a move above could see prices testing 110.

Trading Ideas:

Aluminium trading range for the day is 109.5-110.

Aluminium seen firm as the US May Michigan Consumer Confidence climbed to a new high since October 2007, beating expectations.

Global production of aluminium edged up by 131,000 tonnes annualised in April – IAI

European news continued to dominate the market, most of which was negative.