Nickel settled up 1.43% at 1145.5 as investors await inflation figures from the U.S. and manufacturing data from China. The US dollar index rose on the release of Fed's meeting minutes, but base metals prices increased across the board. The Fed confirmed tapering of QE3, pushing down the euro and driving up the US dollar index. HSBC’s China manufacturing PMI for August and PMIs from the euro zone and the US, due for release on Thursday, should provide guidance for base metals. As base metals surged in unison on Wednesday, trading volumes increased, but positions shrank significantly, indicating the rise was largely attributable to shorts liquidating positions. The US Federal Reserve’s minutes from its July policy meeting revealed that some members of the Federal Open Market Committee (FOMC) suggested the Fed should raise interest rates earlier than anticipated now that the labor market and inflation both improved. Nevertheless, these policy makers conceded that more evidence is needed to prove it appropriate to do so ahead of any formal decisions. Meanwhile, US Fed Chair Janet Yellen is expected to make dovish comments at the annual Kansas City Federal Reserve meeting which begins on Thursday. LME nickel prices opened at USD 18,635/mt overnight, with the high end of the price range USD 19,069/mt, and finding support at USD 18,608/mt. Finally, LME nickel prices closed at USD 18,935/mt, up USD 283/mt from the previous trading day. Technically market is under fresh buying as market has witnessed gain in open interest by 1.68% to settled at 3997 while prices up 16.1 rupee, now Nickel is getting support at 1130.8 and below same could see a test of 1116.2 level, And resistance is now likely to be seen at 1156.3, a move above could see prices testing 1167.2.

Trading Ideas:

Nickel trading range for the day is 1116.2-1167.2.

Nickel ended with gains as investors await inflation figures from the U.S. and manufacturing data from China.

Fed’s minutes revealed that FOMC suggested Fed should raise interest rates earlier than anticipated now that the labor market and inflation both improved.

The Fed confirmed tapering of QE3, pushing down the euro and driving up the US dollar index.