Zinc settled down -1.16% at 123.45 in the line of expectation and tracking LME zinc prices which pushing down to USD 1,955/mt, but then rallying. The US dollar index plummeted to 81, its second lowest since June, with the euro against the US dollar strengthening. This sent LME zinc prices up, closing at USD 1,986/mt, down USD 2.0/mt or 0.10%. The Chicago Fed National Activity Index (CFNAI) in July fell short of expectations, but US retail sales data showed some improvement. Moody's has revised its outlook for US states from negative to stable, citing growth in state revenues and reserves. Market players remained cautious ahead of the minutes of the Fed's July meeting, due out on Wednesday, for further indications as to when the central bank may start to unwind its USD85 billion-a-month asset purchase program. U. S. data on initial jobless claims and the housing sector later in the week will also be closely watched. Traders have closely been looking out for U. S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases. Any improvement in the U. S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months. Technically market is under long liquidation as market has witnessed drop in open interest by -15.12% to settled at 3256 while prices down -1.45 rupee, now Zinc is getting support at 121.7 and below same could see a test of 119.9 level, And resistance is now likely to be seen at 124.9, a move above could see prices testing 126.3.

Trading Ideas:

Zinc trading range for the day is 119.9-126.3.

Zinc dropped as investors closed positions ahead of the release of the minutes of the Fed's latest policy meeting.

The Chicago Fed National Activity Index (CFNAI) in July fell short of expectations, but US retail sales data showed some improvement.

Zinc daily stocks at Shanghai exchange came down by 3670 tonnes