Aluminium settled up at 111.00 as the dollar fell and funds piled into the market, but the metal's gains remained vulnerable to the debt crisis in Europe, central bank meetings and key macro-economic data this week, including a US job report on Friday. The unexpected expansion in the US manufacturing sector increased in September and an improvement in employment helped lift most markets on Monday, including base metals, and pushed the dollar lower as investors' appetite for riskier assets improved. But euro zone factories suffered their worst quarter since early 2009, and factory activity in China also contracted, suggesting the world's No. 2 economy lost momentum for a seventh consecutive quarter. Despite aluminium prices remaining low, with plentiful supplies of the light metal available, Norsk Hyrdo is not planning to make further production cuts. With China, the world's largest aluminium producer, failing to cut capacity in response to industry calls for cutbacks, western producers, including Norsk Hydro, have been at the forefront of reducing output. Norsk Hydro has significantly curtailed capacity since 2008, most recently 180k tonnes of annual output at the Kurri Kurri smelter in Australia. For today's session market is looking to take support at 109.9, a break below could see a test of 108.7 and where as resistance is now likely to be seen at 111.7, a move above could see prices testing 112.3.

Trading Ideas:

Aluminium trading range for the day is 108.73-112.33.

Aluminium gains as dollar fell and funds piled into market, but metal's gains remained vulnerable to debt crisis in Europe

A weaker dollar tends to lift base metals as it makes them cheaper for investors holding alternative currencies.

In the euro zone manufacturing put in its worst performance in the three months to September since 2008 financial crisis