Aluminium settled down -1.45% at 118.7 as investors took profits out of caution ahead of the release of a draft of economic data. US Consumer Confidence Index hit a 6-year high, but home price index in large US cities missed forecasts. Growing geopolitical tensions dampened market sentiment. The Standard & Poor’s/Case-Shiller 20-city home price index, released Tuesday, rose at the lowest rate of 9.3% in May since February 2013, shy of the expected 10% increase. Market participants thus predicted that the US property market faced headwinds in recovering. The Conference Board’s consumer confidence index for July came in at 90.9, hitting a refreshed high last seen in October 2007 and soundly beating the estimated 85.4. The index has been increasing for a third straight month, pointing to the robust labor market and market optimism towards the US economic outlook. However, major US stocks fell after the US initiated another round of sanctions against Russia. The banks being targeted in this round of sanctions included VTB, the Bank of Moscow, and the Russian Agriculture Bank. Market caution ahead of the release of a series of import economic data may leave the most active SHFE aluminum contract vulnerable at RMB 14,000/mt, with prices expected between RMB 13,980-14,050/mt on Wednesday. In China’s physical market, buying interest of traders will wane, with spot discounts of RMB 20-60/mt expected over SHFE 1408 aluminum contract. Technically market is under long liquidation as market has witnessed drop in open interest by -7.25% to settled at 4403 while prices down -1.75 rupee, now Aluminium is getting support at 118.2 and below same could see a test of 117.6 level, And resistance is now likely to be seen at 119.7, a move above could see prices testing 120.6.

Trading Ideas:

Aluminium trading range for the day is 117.6-120.6.

Aluminium dropped as investors took profits out of caution ahead of the release of a draft of economic data.

Growing geopolitical tensions dampened market sentiment.

US Consumer Confidence Index hit a 6-year high, but home price index in large US cities missed forecasts.