Nickel settled up 0.81% at 882 swung between small gains and losses, as market players looked ahead to key U. S. economic data later in the day for further indications on the future course of U. S. monetary policy. The US retail sales and core retail sales released overnight both exceeded expectations in December, with the latter staging the biggest rise since February 2013, helping placate the market hit by previous disappointedly weak job data. As a result, US stocks showed strong rebounds. Charles Plosser, president of the Philadelphia Federal Reserve and a voting member of the FOMC this year, backed the Fed's decision to start paring back the asset purchasing program, and said he favored ending the quantitative easing by late 2014. Dallas Fed chief Richard Fisher, also a voting member, said he will use his vote to support QE tapering in January. The US dollar index thus ended up 0.16%, weighing on base metal prices. In the euro zone, the industrial output for November rose by 1.8% MoM, the largest growth since May 2010, indicating that the euro zone economy in Q4 2013 was recovering slightly faster than Q3 2013. The UK December CPI increased by 2% YoY, hitting the target set by the Bank of England for the first time in four years. While support is expected as government halted mineral ore exports in an attempt to promote processing domestically. Global nickel prices and mining shares rallied in the first trading day after the ban in the world's top nickel ore exporter. Technically market is getting support at 877.7 and below same could see a test of 873.4 level, And resistance is now likely to be seen at 885.9, a move above could see prices testing 889.8.

Trading Ideas:

Nickel trading range for the day is 873.4-889.8.

Nickel rose amid speculation about a scarcity after Indonesia, the biggest producer of the metal from mines, barred ore exports.

The global nickel market may move to a deficit next year as the export ban, which took effect Jan. 12, curbs Chinese production

Fed official admitted that uncertainties surrounding the economy have reduced, and expressed his support to Fed's decision to begin scaling back the bond buying program.