Aluminium yesterday traded with the positive node and settled 1.41% up at 106.40 as weak manufacturing activities of China and the euro zone in August raised hopes for easing monetary policies. Markets are pining great hopes on detailed bond-buying program to be introduced in ECB meeting on September 6, causing market risk appetite to grow and pushing commodities to rise. In response, LME aluminum staged a strong rebound during European session and broke through the 5-day moving average to a high of $1,930/mt, the highest since July 20. However, trading volumes contracted 9,258 lots due to the US Labor Day. Aluminum prices will edge up, thanks to expectations for easing policies. LME aluminum should test support at $1,900/mt and move between 1,900-1,950/mt on Tuesday. The euro held its ground on Tuesday even after Moody's changed the outlook on its EU rating, with hopes running high the ECB will unveil a plan tackle the region's debt crisis later this week. Investors saw weak regional and global economic data as raising the prospect for further stimulus from central banks to underpin growth. In yesterday's trading session aluminium has touched the low of 104.75 after opening at 104.95, and finally settled at 106.4. For today's session market is looking to take support at 105.2, a break below could see a test of 104 and where as resistance is now likely to be seen at 107.1, a move above could see prices testing 107.8.

Trading Ideas:

Aluminium trading range for the day is 104.03-107.83.

Aluminium ended higher as weak manufacturing activities of China and euro zone in August raised hopes for easing monetary policies

Markets are pining great hopes on detailed bond-buying program to be introduced in ECB meeting on September 6

Moody's Investors Service has changed its outlook on the Aaa rating of the European Union to negative