Nickel settled up 1.79% at 882.30 boosted in the thin trading volumes as key market China celebrated the Lunar New Year. Support seen after the news that Norilsk Nickel reported a 5% year-on-year decrease in its nickel production in 2013. Volumes overnight were thin as expected. Heading into next week, the key data point for base metals may well be the official manufacturing PMI for China due for release. The December print was 51. Bloomberg consensus expectations for the January print are 50.5. Market note that the average m/m decline for Jan is 0.25 and as a result we would read any drop in the PMI of more than 0.25 as a bearish outcome. However, the price impact may be limited given that the flash PMI and the HSBC PMI have already signalled the downturn in manufacturing. From US side on Wednesday, the Fed said it would scale back its monthly asset purchase program by another USD10 billion to USD65 billion a month, citing improvements in the labor market. The central bank said it will keep a close eye on economic indicators before deciding to wind down its stimulus program even further. Data released on Thursday showed that the U. S. economy grew 3.2% in the fourth quarter, in line with expectations. On Friday, U. S. data showed that consumer spending rose 0.4% in December, above expectations for an increase of 0.2%. In the week ahead, investors will be keenly anticipating Friday's U. S. nonfarm payrolls report for January after December's report showed that the economy added far fewer jobs than expected. Now Nickel is getting support at 868.3 and below same could see a test of 854.3 level, And resistance is now likely to be seen at 890, a move above could see prices testing 897.7.

Trading Ideas:

Nickel trading range for the day is 854.3-897.7.

Nickel settled up boosted in the thin trading volumes as key market China celebrated the Lunar New Year.

Destatis said that German Retail Sales fell to a seasonally adjusted -2.5 per cent from 0.9 per cent in the preceding month.

The price impact may be limited given that the flash PMI and the HSBC PMI have already signalled the downturn in manufacturing.