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29 FEBRUARY 2016 AL CIRCLE

LME aluminium to stay high this week, may retrace to $1,527

1MINS READ
Aluminium at London Metal Exchange (LME) will hover at highs this week after another step forward, according to the latest study by Shanghai Metals Market (SMM). SMM sees LME aluminium trading above $1,550 per tonne, with eyes on China PMI and US employment data.

Demand recovery will push alumiinum stocks back down. This will drive SHFE aluminium up to near 1,500 yuan per tonne. Spot discounts in China will stay around 80 yuan per tonne, and trading will become brisk with return of processors.

LME aluminium faces a resistance at $1,585 per tonne and may retrace to a support at $1,527.

The resistance is provided by the 23.6 percent Fibonacci retracement on the fall from the November 6, 2014 high of $2,078.75 to the November 23, 2015 low of $1,432.50. The metal has been hovering below this barrier for four days, suggesting an exhaustion of the bounce from $1,432.50.

Most likely, aluminium will seek a support at $1,527, the 14.6 percent level. A break above $1,585 could open the way towards the next resistance at $1,641, the 38.2 percent Fibonacci retracement on the fall from the May 6, 2015 high of $1,977 to $1,432.50.

Tagged with:

Aluminium Price LME SMM

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