Zinc settled up 0.59% at 136.35 as the dollar headed for the longest losing streak since July, making commodities priced in greenbacks more attractive. China's Central Work Economic Conference set five major tasks for 2015 on Thursday, putting it as a priority to maintain stable economic growth. The Chinese government pledged to focus on the balance of economic restructuring and growth to avoid sharp fluctuations in the economy. The Conference also emphasized the effectiveness in fiscal policy and flexibility in monetary policy, implying that the deficit rate may exceed 2.5% in 2015. Markets expect the government to unleash more accommodative monetary policy next year. Major Economic indicators released overnight were mixed. LME zinc prices opened at USD 2,186/mt, and dipped to USD 2,153.5/mt as poor CPI from Germany and France fueled market concerns over deflation in the euro zone. But US November retail sales grew most sharply over the past eight months, and the number of US initial jobless claims last week fell short of market expectations. US November import price index dropped 1.5%. This boosted European and US stocks and LME zinc prices. LME zinc prices closed at USD 2,187.5/mt, up USD 3.5/mt or 0.16%. Value added at China's large industrials in November and fixed assets investment will be announced today. Growing market expectations that China will lower deposit reserve ratio boosted market confidence. Technically market is under short covering as market has witnessed drop in open interest by -4.75% to settled at 3127 while prices up 0.8 rupee, now Zinc is getting support at 134.8 and below same could see a test of 133.1 level, And resistance is now likely to be seen at 137.5, a move above could see prices testing 138.5.

Trading Ideas:

Zinc trading range for the day is 133.1-138.5.

Zinc rebounded as the dollar headed for the longest losing streak since July, making commodities priced in greenbacks more attractive.

Factory-gate deflation in China deepened last month and consumer prices climbed at the slowest pace since 2009, signaling room for further monetary easing.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.