Aluminium prices rose to a three-week high on Wednesday. The price was supported as traders expected that the US announcement of sanctions against Russia over the death of opposition leader Alexei Navalny could cause supply disruptions.
However, industry sources said Russia imposed a 200% tariff on US aluminium last March is already banned, and traders and funds that bet at lower prices have hedged their positions in the face of direct sanctions.
US sanctions would mean that any aluminium company trading in dollars would no longer be able to touch the Russian metal. The problem would be exacerbated if the sanctions were applied retroactively, as 90% of aluminium stocks in London Metal Exchange warehouses come from Russia.
Three-month aluminium prices rose to $2,269 per tonne on the London Metal Exchange, the highest price since a year . February 1st. Trading rose 1.5% to $2,227 a tonne.
The US will announce sanctions against Russia on Friday. They target the defense and industrial bases of the country. China’s key consumer stimulus measures are also supporting base metals. China announced its biggest mortgage cut on Tuesday to support its housing market.
Technical Outlook – Aluminium
Aluminium prices rose from an intraday low of 198.25 and touched a high of 202 before closing at 199.30. In the last two trading sessions, prices moved in an upward direction.
When a bullish candlestick appeared on the chart, prices moved in a positive direction. In addition, prices received strong support from the corresponding levels of last month, which form a double bottom.
Furthermore, the prices are trading above the short-term moving average and the RSI 14 and its 9 SMA provide a favorable crossover.
All the technical aspects mentioned above point to the positive side of the near future. However, prices should rise above 202.50 to take profits between 205.50 and 208.00.
Otherwise, any drop to 197.50-197 could attract buying action with stops below 195.20
Commodity Samachar
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