Zinc yesterday traded with the positive node and settled 0.1% up at 104.05 tracking LME zinc market overnight which opened high at $ 1,875/mt, but slid to $ 1,843/mt due to pressures from the shorts. Thanks to strong support at the low end, LME zinc prices later rallied to $ 1860/mt. LME zinc prices advanced, as market expectations over an interest rate cut in the euro zone increased following positive news from the EU summit, with prices briefly reaching $ 1,893/mt. Later, the euro-zone manufacturing PMI data hit a new low since June 2009, and meanwhile, the US ISM manufacturing data for June was 49.7 weighing down market sentiment. Markets gradually absorbed positive news from the EU summit, and the disappointing PMI data from major economies reignited market worries. Metal's gained after European leaders unexpectedly reached an agreement on measures to help resolve the ongoing debt crisis in the euro zone. After a two-day summit in Brussels, EU leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt and also agreed to set up a joint banking supervisory body for the euro area. In addition to the direct recapitalization of Spain’s banks, euro zone bailout funds will be able to purchase government debt in order to keep down borrowing costs. For today's session market is looking to take support at 103.3, a break below could see a test of 102.5 and where as resistance is now likely to be seen at 105, a move above could see prices testing 105.9.

Trading Ideas:

Zinc trading range for the day is 102.48-105.88.

Zinc gained as market expectations over an interest rate cut in euro zone

Markets gradually absorbed positive news from EU summit and disappointing PMI data reignited market worries.

Euro-zone manufacturing PMI data hit a new low since June 2009, and US ISM manufacturing data for June was 49.7 weighed on market.