Aluminium settled -0.77% down at 109.80 as pressure seen aid to Spain and Greece met resistance, aggravating the debt crisis in the euro zone. The downbeat US new home sales for August also added to concerns. In this context, risk aversion grew, pushing the US dollar index up to 80 and weighing down commodities. LME aluminum lacked upward momentum and dropped to $2,062.8/mt. LME aluminum only managed to regain some losses at the tail of trading before finally ending the day down $20/mt or 0.95% to close at $2,080/mt. Investors will scramble to exit the market as the slump of the Shanghai Index below 2,000 points for the first time in three and a half years dampened market confidence. Support can be seen as US home prices rose for a sixth straight month in July in the latest sign of a sustainable housing market recovery, while a jump in consumer confidence this month offered a harbinger that Americans are ready to loosen their spending. Meanwhile China's central bank said that it will "fine tune" policy to cushion the economy against global risks and that the country's economy has showed signs of stabilsing while the trend of inflation remains stable. The China will be shut from Sept. 29 to Oct. 7 for the Mid-Autumn and Chinese National Day holidays. For today's session market is looking to take support at 109.2, a break below could see a test of 108.6 and where as resistance is now likely to be seen at 110.6, a move above could see prices testing 111.3.

Trading Ideas:

Aluminium trading range for the day is 108.63-111.33.

Aluminium ended lower as downbeat US new home sales for August  added to concerns.

Aid to Spain and Greece met resistance, aggravating the debt crisis in the euro zone.

LME aluminum only managed to regain some losses at the tail of trading before finally ending down USD 20/mt