Aluminium yesterday traded with the positive node and settled 2.11% up at 113.50 as risk appetite grew amid stimulus from the US and the EU, LME prices extended upward momentum, with positions and trading volumes climbing to intra-year high. Also china’s imports were down as much as 2.6% YoY in August and above-scale industrial added value dropped 0.3 percentage points, highlighting aggravated downward risks of the Chinese economy and raising expectations for policy easing by the People’s Bank of China. Downbeat US nonfarm payrolls in August also pushed hopes for QE3 by the Fed in its interest rate meeting this Wednesday. The rebound of the US dollar index was curbed as a result, helping commodities to extend gains. LME aluminum trended up after a high open overnight and touched a high of $2,065/mt, the highest since May 21, pointing to gains for seven consecutive trading days. Positions increased by 4,155 lots to 729,107 lots. Finally, LME aluminum ended the day up $44.5/mt or 2.20% to close at $2,064/mt. Aluminum prices will move narrowly, as investors are staying wary ahead of the rulings from the Germany Supreme Court and the Fed interest rate meeting due on Wednesday. For today's session market is looking to take support at 111.8, a break below could see a test of 110.2 and where as resistance is now likely to be seen at 114.3, a move above could see prices testing 115.2.

Trading Ideas:

Aluminium trading range for the day is 110.17-115.17.

Aluminium ended higher as raising expectations for policy easing by the People’s Bank of China supported prices

China’s imports unexpectedly dropped 2.6% YoY in August while exports grew only 2.7% YoY, both missing forecasts

Downbeat US nonfarm payrolls in August also pushed hopes for QE3 by Fed in its interest rate meeting this Wednesday