Long liquidation seen in MCX Zinc; Support seen at 193.3

Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 3.44% to settled at 4044 while prices down 0.4 rupees.

Now MCX Zinc is getting support at 193.3 and below same could see a test of 192.2 level, And resistance is now likely to be seen at 196.1, a move above could see prices testing 197.8.

Zinc on MCX settled down 0.21% at 194.45 on MCX as Rupee climbed nearly 15 paise and the 10-year bond yields declined 0.56 per cent after RBI’s MPC lowered the repo rate by 25 basis points to 6.25 per cent at the central bank’s sixth bi-monthly policy review.

While yesterday LME zinc rose 0.1 percent to $2,706 a tonne, after it pulled back from a seven-month high touched on Tuesday. Zinc has been on the climb this year, defying broader macroeconomic gloom and a previous consensus that its bull run was well and truly over.

Mixed view was prevailed in the market as Industrial output in Europe’s biggest economy, Germany, registered an unexpected fourth consecutive monthly decline in December, data showed on Thursday, while the Bank of England said Britain faces its weakest economic growth in a decade.

While US President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. Also the remarks confirmed comments from administration officials who said the two men were unlikely to meet before the deadline, dampening hopes of a quick trade pact and sparking a drop in U.S stock markets.

Trading Ideas:
–Zinc trading range for the day is 192.2-197.8.

–Zinc steadied as prices bucked the weaker trend as an environmental crackdown in China created shortages of refined metal.
–China’s zinc output came in at 4.53 million tonnes in 2018, according to a survey of smelters by Antaike.
–Concern about nearby zinc supplies has been fuelled by one company holding between 50 percent and 79 percent of LME zinc warrants and cash contracts.

Courtesy: Kedia Commodities