Zinc settled up 0.42% at 118.2 as support seen tracking recovery in LME prices after the euro stopped falling. Market remained cautious prior to the Fed's policy meeting. Euro zone July industry output dropped by 1.5%, its largest decline since September 2012, increasing concerns over euro zone economy. Besides, despite Syria issue appears to have eased, investor concerns continued to grow. News from Europe was mostly negative. But Bank of England President Carney said they will consider using additional stimulus measures if economy falls again, boosting the market. Euro zone industry output in July was down 1.5%, lower than the 0.6% growth revised in June, with annualized data falling by 2.1%, also lower than the 0.4% decline revised in June. Greece's June unemployment rate rose to 27.9%, hitting a new high. It was reported Slovenia will likely apply for bailout to European Stability Mechanism. The number of US initial jobless claims last week decreased to 292,000, much lower than the forecast of 330,000, and the lowest since April 2006, triggering market fears of an and of QE3. The US dollar index jumped. But Labor Department officials pointed out the drop in initial jobless claims may due to computer system upgrading of some states, pushing down the US dollar index again, and allowing base metals prices to gain back some losses. Technically market is under short covering as market has witnessed drop in open interest by -1.69% to settled at 2730 while prices up 0.5 rupee, now Zinc is getting support at 117.2 and below same could see a test of 116 level, And resistance is now likely to be seen at 119.2, a move above could see prices testing 120.

Trading Ideas:

Zinc trading range for the day is 116-120.

Zinc settled up as support seen tracking recovery in LME prices after the euro stopped falling.

Market remained cautious prior to the Fed's policy meeting.

Zinc daily stocks at Shanghai exchange came down by 397 tonnes