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Wednesday, July 6, 2022

MCX Zinc under fresh selling; Resistance seen at 173.5

Natural gas market under fresh selling; Support seen at 188.5

Crude Oil market under long liquidation; Support seen at 4590

MCX Nickel under fresh selling; Support seen at 898.8

Silver market under fresh selling; Support seen at 37820

MCX Aluminium under fresh selling; Resistance seen at 141.8

Technically Zinc market is under fresh selling as market has witnessed gain in open interest by 27.24% to settled at 5914 while prices down 6.6 rupees.

Now MCX Zinc is getting support at 173.5 and below same could see a test of 171.5 level, And resistance is now likely to be seen at 179, a move above could see prices testing 182.5.

Zinc on MCX settled down 3.63% at 175.35 on fresh selling as prices retreat again anticipations of excess zinc supplies grew and China’s factory activity growth weakened in July.

LME Zinc led the decline with a 1.7% drop to $2,590 per tonne, after the disappointing release of China’s Caixin manufacturing PMI for July – easing to 50.8 from 51 and below the expected 50.9 – has dampened sentiment, although a stronger manufacturing PMI in Japan that climbed to 52.3 from 51.6 was encouraging.

Sentiments remain weak after U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday. Last night the US dollar index inched up to 94.7 overnight after the Federal Reserve concluded a two-day meeting on monetary policy and kept interest rates unchanged.

The decision on interest rates was widely expected, but the central bank upgraded its view on the economy, calling it “strong”. Both LME and SHFE base metals fell across the board overnight. China’s Caixin manufacturing PMI declined to 50.8 in July from June’s 51.0, lower than the expected 51.

A reading above 50 indicates expansion, while a reading below that signals contraction. Now day ahead key factors to watch today will be US initial jobless claims last week, factory orders and durable goods orders in June.

Trading Ideas:
–Zinc trading range for the day is 171.5-182.5.
–Zinc dropped weighed down by a stronger dollar and after growth in China’s manufacturing sector cooled for a second month.
–Investors fear an escalating trade war between US and China could hit global growth, and prominent U.S. business groups have condemned Trump’s aggressive tariffs.
–Weak consumption in the low season shrank spot zinc premiums in the Shanghai market.

Courtesy: Kedia Commodities            

Source: Commodityonline.com

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