Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 19 August 2014

Aluminium settled up 0.87% at 122.1 as some investors regarded recent losses as overdone but gains were capped after new home prices in top metal consumer China fell in July for the third month in a row. Figures from the National Association of Home Builders (NAHB) showed on Monday that US homebuilder sentiment rose in August to a 7-month high of 55 from 53, hovering above the 50 mark for a second consecutive month. China’s new home sales prices were reportedly down for a third straight month in July, indicating the downturn in housing market was still impairing China’s growth. Foreign direct investment also dropped unexpected for the first time in 17 months, as manufacturing companies in Japan, Europe and the US cut spending. This week, base-metal investors will be monitoring further economic data releases from China and the US, as well as the release of minutes from the US Federal Open Market Committee's latest meeting and speeches by US Federal Reserve chair Janet Yellen and European Central Bank President Mario Draghi. In China, foreign direct investment slumped 17% YoY in July to USD 7.81 billion, well below expectations and June’s level. 64 of 70 medium and large cities saw real estate prices fall in August. Home prices in Beijing and Shanghai dropped 1.3% and 1.4%, respectively, from a month earlier. Investors should remain cautious on Tuesday before the release of a series of economic data, including US July CPI, manufacturing PMIs from China, the euro zone and the US. Technically market is under fresh buying as market has witnessed gain in open interest by 10.21% to settled at 6410, now Aluminium is getting support at 120.9 and below same could see a test of 119.7 level, And resistance is now likely to be seen at 122.9, a move above could see prices testing 123.7.