LME aluminium may retest resistance at $1,754 this week

• The resistance is identified as the 38.2pc retracement of a downtrend from $1,866 to $1,685.
• The trend looks very sideways. Such a characteristic suggests a deep reversal of the sharp fall from the Jan. 22 high of $1,834.

SINGAPORE: LME aluminium may retest a resistance at $1,754 per tonne this week, a break above which could lead to a gain to $1,776.

The resistance is identified as the 38.2pc retracement of a downtrend from $1,866 to $1,685.

The trend looks very sideways. Such a characteristic suggests a deep reversal of the sharp fall from the Jan. 22 high of $1,834.

Support is at $1,711, a break below which could cause a fall into the range of $1,685-$1,698.

On the hourly chart, the pattern from the Feb. 4 low of looks like a rising wedge, which may consist of five waves.

The fifth wave labelled e is expected to start around $1,720 and travel towards the range of $1,742-$1,760.