Nickel settled down -0.89% at 881.8 on profit booking due to the sluggish US January retail sales data. European Central Bank's monthly report anticipates economy will likely face downward risk, pushing down LME nickel prices. The US retail sales fell 0.4% MoM in January, the biggest fall since June 2012, with December’s figure also revised downward. Barclays lowered its forecast for US Q4 GDP growth from 2.6% to 2.2% in the wake of the poor data. Credit Suisse cut forecast for the US growth in Q1 2014 from 2.6% to 1.6%. Initial jobless claims were 339,000 last week, worse than expectation. US stock market was not significantly affected, but the US dollar index declined 0.5%, helping ease pressure on base metals. In China, the People’s Bank of China (PBOC) did not conduct open market operation this week. As RMB 330 billion of reverse repos matured during the Chinese New Year holiday and an additional RMB 120 billion of reverse repos should mature this week, the PBOC will drain a net RMB 450 billion from market. That being said, lower overnight repo rates indicated that liquidity remained ample.  LME nickel prices opened at USD 14,395/mt overnight, with the high end of the price range USD 14,449/mt, and finding support at USD 14,122/mt. Finally, LME nickel prices closed at USD 14,200/mt, down USD 180/mt from the previous trading day. Inventories fell by 3,412 mt, to 265,256 mt. Technically market is under fresh selling as market has witnessed gain in open interest by 33.85% to settled at 5983 while prices down -7.9 rupee, now Nickel is getting support at 874.2 and below same could see a test of 866.5 level, And resistance is now likely to be seen at 893.6, a move above could see prices testing 905.3.

Trading Ideas:

Nickel trading range for the day is 866.5-905.3.

Nickel ended with losses on profit booking due to the sluggish US January retail sales data

European Central Bank's monthly report anticipates economy will likely face downward risk

Technically market is under fresh selling as market has witnessed gain in open interest by 33.85% to settled at 5983