MCX Aluminium likely to move in a range of 134.6-139.6

Technically MCX Aluminium is getting support at 135.5 and below same could see a test of 134.6 level, And resistance is now likely to be seen at 138, a move above could see prices testing 139.6.

Aluminium on MCX settled down 1.02% at 136.40 dropped on profit booking tracking LME aluminium prices eased 0.8 percent to $1,907, having scaled its highest since Dec. 24. The U.S. lifted sanctions on aluminum giant Rusal on Jan. 27 following the company’s compliance with the removal of the Russian oligarch Oleg Deripaska — along with several other influential Russians, identified due to their ties with Russian President Vladimir Putin — from its board and parent company.

Given that Section 232 tariffs on imports of aluminum remain in place, this should limit ingot price decreases from the removal of sanctions on Rusal; this could be bearish for ingot prices. Now market players looked ahead to comments from Federal Reserve Chair Jerome Powell for further hints about the outlook for monetary policy in the months ahead.

Powell is scheduled to deliver opening remarks and answer questions on monetary policy at a town hall meeting with teachers in Washington, D.C.. The U.S. central bank last week signaled that its three-year drive to tighten monetary policy is close to an end due to rising headwinds to the economy.

Meanwhile, markets digested U.S. President Donald Trump’s State of the Union address on Tuesday, in which he raised the prospect of another shutdown should his demand for border wall funding not be met.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.1% at 95.92, its best level since Jan. 25. A stronger dollar can be a negative for commodities priced in the currency, making them more expensive to users of other currencies.

Trading Ideas:
–Aluminium trading range for the day is 134.6-139.6.
–Aluminium dropped on profit booking trade tensions between Washington and Beijing ease.
–China’s services sector maintained its growth in January, a Caixin survey showed.
–Chalco said that it was implementing “flexible production” on about 200,000 mt/year of capacity at its Shandong Huayu facility.

Courtesy: Kedia Commodities