Updates prices

By Julian Luk

London Sept 16 (Reuters) -Aluminium prices rose through key resistance levels on Monday, supported by lower inventory, a weaker dollar and expectations the U.S. Federal Reserve will this week announce a bigger interest rate cut.

Three-month aluminium on the London Metal Exchange (LME) CMAL3 was up 2% at $2,518 a metric ton at 1555. Gains pared after rising 3% to $2,545, the highest since Aug. 28.

On a technical level, the light metal, widely used in auto-making and packaging, was still strong after a 5.2% rally last week, a trader said.

It broke through the 100-day moving average of $2,480 earlier in the session to create further upward momentum. It had already surpassed the 21-day, 50-day and 200-day averages.

Systemic buying from commodity trading advisers, or CTA, was evident Monday morning, according to brokerage Marex. These funds buy and sell based on signals from numerical models.

A large futures position also remained on the LME to buy aluminium in October and sell in November 0#LME-FBR. The premium, or backwardation, rose to about $16 a ton for the October contract over November MALV24-X24.

Prices have been boosted by a shrinking aluminium supply that has fallen to its lowest in 18 weeks. The inventory in LME's registered warehouses dropped to 820,850 tons, having fallen 18% over the last three months. MALSTX-TOTAL

Among macro factors, the dollar weakened to its one-year low against the Japanese yen on Monday in anticipation the U.S. central bank will opt for a larger 50 basis point cut. .DXY

Lower interest rates could pressure the U.S. currency and make dollar-priced metals cheaper for holders of other currencies.

Markets in China, the biggest aluminium consumer, are closed until Wednesday for a public holiday.

Weekend data showed industrial output growth in China slowed to a five-month low in August, while retail sales and new home prices weakened further.

For other metals, LME copper CMCU3 went up 0.9% to $9,388 a ton, lead CMPB3 was unchanged at $2,044, tin CMSN3 ticked up 0.4% at $31,920 and nickel CMNI3 rose 2% to $16,260, LME zinc CMZN3 was up 1.3% at $2,941.5.

Reporting by Julian Luk in London, additional reporting by Mai Nguyen in Hanoi; editing by Barbara Lewis and Jonathan Oatis

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