Aluminium settled down -0.13% at 119.35 on profit booking on Saturday while on Friday prices rallied as euro zone's Consumer Confidence Index for August, released last Friday, rose to a 2-year high of -15.6, pushing the euro higher. New home sales in the US dropped to an annualized 394,000 in July, well below expectations and triggering anticipation that the US Federal Reserve will keep QE3 in place. As such, the US dollar index slid, pushing base metals prices up. However, investors exited the market to avoid risks before the weekend, preventing LME aluminum from advancing above $1,900/mt, which finally closed at $1,897.5/mt, up 0.81%. While Aluminum buyers in Japan, will probably win their first reduction in three quarters for fees they pay to producers after premiums in the U. S. and Europe slumped, three executives said. Premiums for the three months starting in October are likely to fall to the lowest level of the year from this quarter's $249 to $251 a metric ton over the LME cash price, said the executives, representing buyers and sellers. They asked not to be identified because the talks, which begin this week, are private. The rates to obtain aluminum tumbled the most in 20 months in Europe last month and retreated from a record in the U. S. as lawmakers and regulators scrutinized long waiting times to withdraw metal from warehouses. The auto industry is the biggest user of rolled-aluminum products in Japan after the construction and can-manufacturing sectors. Demand fell as car sales in Japan shrank 13 percent in the first half because of an end to subsidy payments by the government to buyers of fuel-efficient models. Technically market is getting support at 119 and below same could see a test of 118.7 level, And resistance is now likely to be seen at 119.6, a move above could see prices testing 119.9.

Trading Ideas:

Aluminium trading range for the day is 118.7-119.9.

Aluminium ended with small losses as investors exited the market to avoid risks before the weekend

Business activity in euro zone in August expanded at its fastest pace in more than two years and the German economy rebounded markedly in Q2

Prices can drop as demand fell as car sales in Japan shrank 13 percent in the first half because of an end to subsidy payments by the government.