Nickel settled down -1.06% at 1108.60 as some profit taking following a positive start to Monday with several of the metals pushing to week-highs. Earlier, the releases of the Chinese CPI and PPI data had little impact on the metals. China's CPI rose 2.5 percent in May from a year earlier, quicker than a 1.8 percent in April, data from the National Bureau of Statistics showed. China's producer price index, a gauge of factory-gate prices, dropped 1.4 percent in May compared with a 2 percent decline in April. The fall was less than the expected 1.5 percent decline forecast. While Nickel declined further as the support pertaining to a mine showdown in New Caledonia, holder of the second-biggest nickel reserves, waned. Nickel production at Vale SA plant is planned to be resumed by June 15 as the firm got government permission. The metal touched a two-year high in May after an acid spill exacerbated supply worries predominating the markets due to Indonesia’s ban on ore exports. Market speculations that the US Federal Reserve will raise interest rates grew, with the US dollar index strengthening. In Europe, UK industrial production increased 3.0% YoY in April, its strongest annual gain since January 2011, and the production in the three months ending in April also grew 1.1%, the biggest rise since June 2010. The country’s manufacturing production rose 4.4% YoY during the same month. Technically market is under long liquidation as market has witnessed drop in open interest by -5.76% to settled at 5189 while prices down -11.9 rupee, now Nickel is getting support at 1097.2 and below same could see a test of 1085.7 level, And resistance is now likely to be seen at 1121.1, a move above could see prices testing 1133.5.

Trading Ideas:

Nickel trading range for the day is 1085.7-1133.5.

Nickel prices dropped as the US dollar index closed with gains for three consecutive days, weighing down prices.

Expectations for interest rate hike were running high due to Fed’s optimism over the US economy outlook, dragging the prices down.

Yesterday’s economic releases from China seemed to have limited impact on markets.