Aluminium yesterday settled down by -0.84% at 100.20 as Q1 GDP in France, Spain and Italy contracted. Germany's GDP pointed to slight growth in the first quarter, but still missed forecasts. As a result, Q1 GDP in the euro zone declined 0.2%, contracting for a sixth straight quarter. The US dollar index surged above 84 on weak European economic data. It was later announced that the US industrial production fell sharply in April and New York Fed manufacturing unexpectedly pointed to contraction in May. These discouraging figures dampened market sentiment, but also raise expectations that the US Fed will not scale back asset buying for the time being, forcing the US dollar index to give back gains. LME aluminum was capped under USD 1,850/mt during European trading session, with the low-end price at USD 1,821/mt. LME aluminum recovered most of its losses at the tail of trading on dip-buying by longs, and finally ended the day down 0.54% at USD 1,845.5/mt. The light metal will remain in negative territory on downbeat economic indicators. Also Li Keqiang, Premier of the State Council said yesterday that stimulus policy and government investment alone are not enough to accomplish this year's economic target. Market mechanism should play an important role. His remarks dashed hopes for easing monetary policy by China's central bank. Technically market is under long liquidation as market has witnessed gain in open interest by 15.21% to settled at 6970 while prices down -0.85 rupee, now Aluminium is getting support at 99.1 and below same could see a test of 98 level, And resistance is now likely to be seen at 101.3, a move above could see prices testing 102.4.

Trading Ideas:

Aluminium trading range for the day is 98-102.4.

Aluminium dropped weighed by disappointing Economic figures from the euro-zone area

US April industrial production dropped more than expected by a seasonally adjusted 0.5% and capacity utilization rate slid to 77.8%.

Aluminium daily stocks at Shanghai exchange came down by 343 tonnes