Zinc settled up 0.12% at 127.60 tracking LME zinc prices which overnight opened at USD 2,068/mt, dipping to USD 2,060.8/mt during Asian trading hours before rising, then hovering around USD 2,080/mt. But US December retail sales were upbeat, boosting the US dollar index to end a three-day losing streak. LME zinc prices rolled back intraday gains, and closing at USD 2,068.3/mt, down USD 0.8/mt or 0.04%. The U. S. is set to release data on retail sales for December as well as reports on import prices and business inventories later Tuesday. Market players have closely been looking out for U. S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to scale back stimulus. Data on Friday showed that the U. S. economy added just 74,000 jobs in December, the smallest increase since January 2011 and well below expectations for 196,000 new jobs. The unemployment rate fell to a five-year low of 6.7% last month from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%. Despite the disappointing data, Atlanta Federal Reserve President Dennis Lockhart voiced his support of further tapering to the one already announced in December on Monday. The central bank is scheduled to meet January 28-29 to review the economy and assess policy. The Fed's stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar. Technically market is getting support at 127.1 and below same could see a test of 126.4 level, And resistance is now likely to be seen at 128.7, a move above could see prices testing 129.6.

Trading Ideas:

Zinc trading range for the day is 126.4-129.6.

Zinc gained as investors continued to absorb effects from the negative US non-farm employment data, with the US dollar seen under pressure

The US retail sales and core retail sales both exceeded expectation in December, with the latter staging the biggest rise since February 2013

Zinc daily stocks at Shanghai exchange came down by 176 tonnes