Aluminium settled 0.35% up at 113.65 despite risk appetite faded and investors are staying cautious ahead of the rulings by the Germany’s Constitutional Court and the Fed interest rate meeting on Wednesday and Thursday. As Moody's warned that it might downgrade the US credit rating, the US dollar index dived below 80. In response, LME aluminum surged to a fresh three-month high of $2,080/mt, pointing to gains for a seventh straight trading day. Market sentiment is expected to be cautious and longs are expected to exit market after profit-taking before the Germany Constitutional Court’s vote over ESM. It was reported that Germany parliamentarians submitted appeal opposing the ECB’s bond-buying and asked the constitutional court to postpone ESM vote. However, Angela Merkel later said that the government would make vote over ESM on time. Market is looking at a positive outcome from the German constitutional court vote. Currently, the Fed is holding a two-day interest rate meeting, and will reveal the latest interest rate result on 5:00 am on Friday Beijing time, with expectation over QE3 growing. For today's session market is looking to take support at 112.7, a break below could see a test of 111.7 and where as resistance is now likely to be seen at 114.2, a move above could see prices testing 114.8.

Trading Ideas:

Aluminium trading range for the day is 111.72-114.82.

Aluminium gains despite risk appetite faded and investors are staying cautious ahead of rulings by Germany’s Constitutional Court

Also supporting commodities was a series of spending and subsidy announcements by China

Germany parliamentarians submitted appeal opposing ECB’s bond-buying and asked constitutional court to postpone ESM vote