Zinc yesterday traded with the negative node and settled -0.14% down at 110.15 overnight fell but then rose. The market remained cautious prior to the decision of ESM by German constitutional court and the policy meeting of the US Federal Reserve. During European and US trading hours, Moody’s warned it might downgrade US AAA rating, and expectations of QE3 implementation increased. LME base metal prices largely closed with gains overnight. 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 Federal Reserve 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. In yesterday's trading session zinc has touched the low of 108.85 after opening at 110.15, and finally settled at 110.15. For today's session market is looking to take support at 109.1, a break below could see a test of 108 and where as resistance is now likely to be seen at 111, a move above could see prices testing 111.9.

Trading Ideas:

Zinc trading range for the day is 107.98-111.88.

Zinc dropped as market remained cautious prior to the decision of ESM by German constitutional court

Market is looking at a positive outcome from the German constitutional court vote.

Zinc daily stocks at Shanghai exchange came up by 1367 tonnes