Aluminium yesterday settled down -1.68% at 105.5 on profit booking amid rise in LME stocks by 3,725 mt despite of decline in US dollar. Data on Wednesday showed manufacturing activity in China at an 11-month low in July, pointing to more challenges for a country where year-on-year economic growth has fallen in nine of the last 10 quarters. Better-than-expected industrial growth in the European Union, coupled with a rise in planned U.S. business spending and strong home sales data, only partially offset concerns about the slowdown in China. Moreover, investors may be getting nervous that any Chinese government stimulus program may not be enough to stem the tide of weakening demand. US economic data released overnight were mixed. Durable goods orders rose more than expected by 4.2% in June, but initial jobless claims in the week ending July 20 were worse than expected. Goldman Sachs cut its forecast for US Q2 GDP growth following these figures, weighing LME base metals prices down. In China, funds outstanding for foreign exchange pointed to negative growth in June. Cloudy monetary policy is jittering investors. Markets are now expecting the People's Bank of China (PBOC) to launch reverse repurchase now that the PBOC has not launched repurchase for six consecutive months. Technically market is under fresh selling as market has witnessed gain in open interest by 27.4% to settled at 3641 while prices down -1.8 rupee, now Aluminium is getting support at 104.60 and below same could see a test of 103.70 level, And resistance is now likely to be seen at 106.60, a move above could see prices testing 107.70.

Trading Ideas:

Aluminium trading range for the day is 103.7-107.7.

Aluminium ended lower on profit booking amid rise in LME stocks by 3,725 mt despite of decline in US dollar

Durable goods orders rose 4.2% in June and building permits were revised up to a 6.8% decline, suggesting recovery in the US economy.

Aluminium daily stocks at Shanghai exchange came down by 2302 tonnes