Aluminium is trading at the highest level since 2011 following a military coup in Guinea. Military seized control over the country in West Africa that is one of the key bauxite miners in the world. Following heavy processing, bauxite becomes aluminium, a material used in production of cars or cans for drinks. Almost all of bauxites mined in Guinea are sent to China and Guinea accounts for more than half of all bauxite reaching China.
Weekend's coup has greatly boosted uncertainty for aluminium traders. On one hand, the volatile situation in the country at the moment threatens supply of a key material used in production of aluminium. On the other hand, military leaders vow that they want mining production to continue and said they will honor all existing mining agreements. Price gains on the aluminium market have been limited so far and look more as a continuation of the ongoing uptrend rather than a reaction to potentially major disruption in supply.
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ALUMINUM trades at the highest level since May 2011. The major long-term resistance to watch can be found in the 3,150 area, where the 127.2% exterior retracement of 2011-2015 drop can be found as well as the potential range of the breakout from a double bottom pattern. Monthly interval. Source: xStation5
We can take a look at a lower interval (D1) in order to determine potential short-term resistance levels. The first one to watch can be found at 161.8% exterior retracement of the May 2021 correction (2,790 area). On the other hand, near-term support levels to watch in case ALUMINIUM launches correction can be found at 2,535 (previous price reactions and upward trnedline) and 2,470 (lower limit of market geometry). Daily interval. Source: xStation5
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