Nickel settled up 0.27% at 901.5 on speculation that a global surplus will shrink amid a ban on exports of unprocessed ores in Indonesia. Supplies outpaced demand by 197,000 metric tons last year, the World Bureau of Metal Statistics said. US January housing starts were down 16% MoM, the largest decline in three years. The US dollar index hit a low of 79.9 before the result of FOMC policy meeting was released, with market players cautious, supporting prices. News out of the US overnight was mixed. Although the FOMC meeting did not put forward any new policies, the meeting still delivered a clear message to markets that the US Federal Reserve would cut by USD 10 billion on the QE stimulus package per month as planned. Some policy makers in the meeting even raised the possibility of an earlier hike of the interest rate. US January PPI grew by 1.2% YoY and 0.2% MoM, both beating forecasts. The nation's January building permits reached an annualized amount of 937,000, down 5.4% MoM and below expectations, and its housing starts totaled 880,000, missing forecasts as well. Nevertheless, these two housing indicators were positive in the east areas plagued by severe cold weather, raising concerns over US economic recovery. Barclays thus lowered its forecast for US Q1 GDP growth to 1.9% from 2.2%, and the US dollar index also fell back to the 80 mark on Wednesday. Technically market is under short covering as market has witnessed drop in open interest by -0.86% to settled at 5533 while prices up 2.4 rupee, now Nickel is getting support at 897.2 and below same could see a test of 892.9 level, And resistance is now likely to be seen at 908.3, a move above could see prices testing 915.1.

Trading Ideas:

Nickel trading range for the day is 892.9-915.1.

Nickel gained on speculation that a global surplus will shrink amid a ban on exports of unprocessed ores in Indonesia.

Minutes from FOMC's January meeting indicated the Fed may continue to cut its asset purchases by USD 10 billion per month

The housing data were positive in the east areas despite severe weather conditions, adding to concerns over the US recovery.